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COMMERCIALIZATION OF ETHIOPIAN SMALLHOLDER DAIRY: MISSINK LINKS National Dairy Forum, Addis Ababa, Ethiopia, 23-24 November 2010 Tesfaye Lemma, Azage Tegegne, D. Hoekstra, R.Puskur

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Smallholder dairy innovation systems: What the research is all about? <ul><li>Mapping and analyzing Ethiopian smallholder dairy innovation systems to better understand: </li></ul><ul><li>- contextual factors determining opportunities and necessities for innovations and commercialization of the dairy systems; </li></ul><ul><li>- mismatches between changing demand for innovation, innovation systems and practices </li></ul><ul><li>Motivation for the research </li></ul><ul><li>Huge gap between potential, R&D efforts and sub-sector performance </li></ul><ul><li>Changing opportunities, constraints and challenges for the sub-sector development </li></ul><ul><li>Source of evidence </li></ul><ul><li>- Review and analysis of project, policy and research documents on Ethiopian experience with smallholder dairy development; </li></ul><ul><li>- Rapid appraisal of dairy innovation systems carried out by IPMS project in its eight PLWs in Amhara, Oromia, SNNP and Tigray; and </li></ul><ul><li>- Review of relevant successful lessons from developing countries, which have successfully transformed their dairy sub-sector </li></ul>

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Overview of findings: What have we learnt? <ul><li>Development intervention </li></ul><ul><li>Prime focus has been on technology transfer and public input & service provision, as lack of technology and information was considered as the critical constraint </li></ul><ul><li>Complementarities between technical and organizational and institutional innovations were less appreciated and did not given due attention </li></ul><ul><li>Customizing policy and development interventions to suit specificity context and location received little attention in policy interventions despite the complexity and spatial & social diversity of smallholder dairy systems in Ethiopia </li></ul><ul><li>Lack of comprehensive policy; and translation of broader policy intentions into operational strategies by dev’t practitioners has been the weakest link </li></ul><ul><li>Actors and interaction </li></ul><ul><li>Many and diverse public and non-public actors in the systems with several innovative initiative at grassroots level </li></ul><ul><ul><li>huge spatial variation in number and composition of actors across PLWs </li></ul></ul><ul><ul><li>dominance of the public sector; and private sector having a limited scope and constrained by knowledge, resources and policy </li></ul></ul><ul><ul><li>Externally funded dev’t projects are champions in promoting value chain and innovation systems approach and the creation of platform and facilitation of multi-stakeholder interaction 7 learning </li></ul></ul>

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What have we learnt? <ul><li>Public sector actors are weakly integrated within, and have weak linkages with NGOs, private services, rural finance. </li></ul><ul><li>Private sector actors like service providers seen, sometimes, as competitors and face bureaucratic hurdles and uneven playing field </li></ul><ul><li>On the other hand, private actors do not appreciate the significance of being part of knowledge networks to improve their response capacity. </li></ul><ul><li>Limited attempt to mobilize inputs of multiple actors due to lack of relevant and effective coordination mechanisms, also making learning & scaling out/up successful experience for wider socio-economic impact </li></ul><ul><li>Incentives, habits and practices </li></ul><ul><li>No culture of inter organizational collaboration, and the predominance of preference to work independently by organizations </li></ul><ul><li>Little evidence indicating that habits, practices and competencies of the public actors have been reconfigured in response to changes in policy, emergence of non-traditional actors and changing innovation needs of stakeholders </li></ul><ul><li>Organizational processes, incentives, criteria for performance evaluation and accountability systems have remained stagnant, inhibiting innovations and also making policy ineffective. </li></ul>

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Conclusion: Missing links <ul><li>Technological change is crucial to increase supply responsiveness of milk producers to expected increase in demand for milk and product </li></ul><ul><li>Most of the challenges relating to commercialization of smallholder dairy are, however, non-technical, which require non-technological/non- R&D innovations </li></ul><ul><li>- there is no adequate market incentive </li></ul><ul><li>- Serious limitation in inputs supply, credit, extension & animal health services coverage, relevance and quality; they are often not integration, and not linked to dairy value chain </li></ul><ul><li>-Historically, non-technical issues have received little attention by the national dairy and feed research, and there are limited research addressing dairy dev’t policy 7 institutional issues such as pluralistic service dev’t and coordinated delivery </li></ul><ul><li>- Agricultural education curricula & mode of delivery are also technology & production-oriented; with poor interaction and linkage to interventions for private service and value chain development </li></ul><ul><li>Coordination gap in the innovation systems, and there are missing/weak linkages between: </li></ul><ul><li>- types and sources of knowledge; </li></ul><ul><li>- R&D services and actual development challenges and innovation needs of economic agents; </li></ul><ul><li>- efforts of public and private actors </li></ul><ul><li>- policymaking and development practice </li></ul>

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Way forward.. <ul><li>Enhancing systems capacity demands multi-pronged, multi-level, context-specific and process-driven approaches. </li></ul><ul><li>Actors </li></ul><ul><li>Enhance competencies </li></ul><ul><li>for managing partnerships </li></ul><ul><li>Empower producer groups </li></ul><ul><li>to demand services and </li></ul><ul><li>command accountability </li></ul><ul><ul><li>Interactions </li></ul></ul><ul><ul><li>Mechanisms to co-ordinate </li></ul></ul><ul><ul><li>efforts of multiple and </li></ul></ul><ul><ul><li>heterogeneous actors </li></ul></ul><ul><ul><li>Creating wider awareness </li></ul></ul><ul><ul><li>about importance of </li></ul></ul><ul><ul><li>knowledge networks and </li></ul></ul><ul><ul><li>partnerships </li></ul></ul><ul><li>Enabling environment </li></ul><ul><li>Capacity development to translate </li></ul><ul><li>policy agenda into operational strategies </li></ul><ul><li>Institutionalize adaptive and participatory </li></ul><ul><li>policy making, informed by process and </li></ul><ul><li>impact monitoring </li></ul><ul><li>Appropriate incentive systems </li></ul><ul><li>Make procedures and targets ‘innovation-friendly’ </li></ul><ul><li>Habits and Practices </li></ul><ul><li>Reinforce habits and practices </li></ul><ul><li>compatible with innovation, </li></ul><ul><li>especially learning and trust </li></ul>

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Recommendations: options <ul><li>Formulating actionable strategy to guide locale-specific interventions for the sub-sector development </li></ul><ul><li>Create mechanisms for multi-stakeholder coordination and process management </li></ul><ul><li>Strengthening organizational base of producers and small and medium private services to improve input supply, service delivery, extension advice, and lobbying for enabling environment for smallholder dairy development </li></ul><ul><li>Public support to private sector development and deliberately encouraging public- private partnership </li></ul><ul><li>Improving economic incentives to encourage innovations through collective action, market linkage, and market development – e.g. school milk program </li></ul><ul><li>Pursuing holistic approach to the design and implementation of technological innovation with VC perspective for facilitating market-orientation and commercialization in smallholder dairy </li></ul><ul><li>Enhancing individual and collective innovation capacity of actors in local innovation systems at milkshed level with VC perspective, and link with higher level structure for coordination </li></ul>

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Let’s continue learning and sharing <ul><li>Thank you.. </li></ul>