Linking local production to urban demand: the emergence of small-scale milk processing units in Southern Senegal

P N Dieye, G Duteurtre*, M M Sissokho, M Sall, D Dia

Institut Sénégalais de Recherches Agricoles, CRZ de Kolda, BP 53, Kolda, Sénégal,
pndieye@yahoo.fr
^*Ministère des Affaires Etrangères, France, / Institut Sénégalais de Recherches Agricoles,
Bureau d'Analyses Macroéconomiques (ISRA-BAME), BP 3120, Dakar, Sénégal
duteurtre@cirad.fr

Summary

In Senegal, the emergence of small-scale dairy processing units seems to be an important factor in the development of an improved local milk production system. To address this issue, a survey was conducted in 2002 in the Kolda milk-shed, Southern Senegal. The "filière" approach was chosen to evaluate the physical transfers, the levels of prices, the quality management and the economic organisation of the sector.

The results show that quantities of milk collected by small-scale processing units increased from 21 250 litres in 1996 to 113 600 litres in 2001. This increase was related to the emergence of new enterprises. Their number increased from 1 in 1996 to 5 in 2001. In this context, small-scale dairy units are shown to connect the production to the consumption side, by providing regular outlets and by marketing adequate products : fermented milk, pasteurised milk, and butter. Their strategies are strongly based on product differentiation.

With the competition of imported powder milk, the future development of the system will certainly depend on the improvement of productivity levels but also on the satisfaction of consumer needs in terms of quality and price. More attention should be paid to the the specific quality of local made products.

Key words: Dairy development, milk processing, milk production, quality, Senegal.

Introduction

In Senegal, the milk industry is essentially based on the use of imported milk powder. Imports represent twice the local milk production, in milk equivalent (Duteurtre et al 2004). The local milk production is marketed through informal channels on which little information is available (Broutin and Diokhané 2000; Ba Diao 2003). Past experiences of industrialisation of local milk production, collection and processing around the cities of Saint-Louis or Dakar were not sustainable (Vatin 1996; Ba Diao 2003). More recently, the rural milk collection project set up by Nestlé-Sénégal in 1991 in the sylvo-pastoral zone also showed much difficulties: the quantity of milk collected represented less than 5 % of the provision of the processing unit (Vatin 1996; Broutin and Diokhané 2000). As a result, the production of concentrated milk by Nestlé-Sénégal stopped in 2003 (Walfadjri 2003), and the processing and transport facilities of the firm were transferred to producers' organisations.

In contrast with the difficulties encountered by much of those industrial projects, there has been a noticeable development of small-scale milk processing units in Senegal after the devaluation of the CFA Franc in January 1994. Those units use simple equipment and techniques and are found in the Northern and Southern parts of the country, particularly in and around secondary cities such as Saint-Louis, Dahra, Tambacounda, Velingara and Kolda (Corniaux 2003; Dieye et al 2003).

In the context of Tambacounda, Velingara and Kolda, the collaboration between research (Institut Sénégalais de Recherches Agricoles (ISRA), Centre de Recherches Zootechniques de Kolda), extension services (Société de Développement des Fibres Textiles (SODEFITEX) and Vétérinaires Sans Frontières (VSF)) and producers started in 1994 and aimed at facilitating the development of an improved local milk provision system and small dairy units.

In the first two years, the experience encountered two major difficulties. The first problem was related to the high over-production during the rainy season. The second one referred to important losses related to default of quality. Some analyses conducted on delivered milk showed that 36% of the milk samples were coagulated and that 32 % were too acid. Milk contamination was found in 60% of cases by fecal Coliforms and in 54% of cases by Staphylococcus (Doumtoum 1995).

In order to reduce those important losses and to valorize the important production in the rainy season, small-scale processing units were established in 1996 in Kolda and the next year in Tambacounda. Since then, there has been a constant dynamism in the processing sector. To support this dynamics, an official network was set-up to formalise collaboration between research, extension and producers: the "Pôle de Services".

The present study aims at understanding the role of the small-scale processing units in the development of the local milk production. After a brief description of the units operating in Kolda, some comments are proposed in order to facilitate access to the market for smallholder producers and the development of peri-urban milk production systems.

Material and methods

Characteristics of the study area

The study was conducted at Kolda (South of Senegal), in the sub-humid zone. The climate is soudanian with a rainy season from June to October and a dry season from November to May. The yearly average rain is 1000 mm. The production system is agro-pastoral. Agriculture is dominated by the production of cereals (rice, sorghum, maize and millet) associated with commercial crops (such as peanut and cotton). Livestock production is strongly associated to this agricultural production, with important use of organic manure and use of harvest residues for feed. Crop residues (notably straws of cereals) as well as grazing constitute the basic resources for animal production.

The Ndama breed is dominant in cattle milk production. Small ruminant milk production is not significant. Milk produced in the households is used in priority for self-consumption. The surplus is sold in town under the form of Pendidam, a local skimmed fermented milk, and butter. Milk production is seasonal: abundant in the rainy season (with the peak of calvings, the availability of water and good quality grazing), and is suspended in the dry season (due to the lack of good quality grass). The main constraints for improving traditional milk production are the lack of feed, the lack of producer organizations, the transport difficulties in relation to access to markets and inadequate equipment for milk conservation and processing  (Ba Diao et al 2002; Dia 2002; Dieye et al 2002, 2003).

To increase the local supply in the dry season, research and extension services have promoted a technical package based on feed supplements and sanitary care to cows in lactation. The promotion of this package also includes a better organisation of the market outlets. The setting up of one mini-dairy in 1996 arose in that context. Later on, other small-scale processing units were set up by private entrepreneurs and support projects. At the time of the study, five of them were running. The collection area included producers within 15 kilometres around Kolda. The milk was collected in 5 to 20 litre containers and brought by bicycle to mini-dairies.

Methodological approach

A sub-sector analysis was used to study the peri-urban dairy system, in order to understand commercial relations from production to consumption. The methodology referred to the concept of "dairy system" or "Filière" as proposed by the literature on dairy marketing in Africa (Metzger et al 1995; Duteurtre et Atteyeh 2000; Duteurtre and Meyer 2001). This approach is based on analysing actors and their strategies, prices and margins, quality management and co-ordination mechanisms in the peri-urban dairy sub-sector.

The study was carried between April and September 2002. Monthly records were taken to estimate quantities of milk transformed by the five mini-dairies. Characteristics, structure and activities of mini-dairies were studied. In addition to the field work, data collected by the "Pôle de services" on the Peri-urban milk production around Kolda from 1996 to 2002 were used. This database referred to milk production records, price series, and collected quantities. Moreover, data from grey literature were used to better understand consumption and milk quality issues.

Results

The presented results refer to the profile of mini-dairies, their contribution to producers' outlets, their strategies, and the quality and prices of their products in comparison to other dairy products.

Profile of mini-dairies

Mini-dairies are small-scale individual private enterprises or collective bodies (Groupements d'Intérêt Economique - GIE). Owners or managers take care of the technical and financial management, relations with suppliers and sellers. They all use temporary or permanent personnel who take care of milk handling, processing and maintenance of the dairy unit. Mini-dairies process on average 25 to 150 litres per day. The two most important mini-dairies handle 75% of the total collected milk. Fermented milk is the main product of mini-dairies. Products are presented in packages of 250 and 500 ml for fermented milk and pasteurized milk (Table 1).

Mini-dairies as main outlets

For producers who contribute to the provision of mini-dairies, deliveries to those units represent 75% and 52% of the total farm production respectively in the dry season and in the rainy season. The growing importance of the processing sector is shown by the increase of yearly quantities of milk collected by mini-dairies. This increase follows the evolution of the number of mini-dairies. Deliveries to those small-scale processing units doubled from 1996 to 1997 while the number of mini-dairies went from 1 to 2. The quantities were then stabilised between 1997 and 2000 at around 40,000 to 50,000 litres, which shows that Puul Debbo (created in 1999) processed very small quantities. The deliveries doubled in 2001 when the number of mini-dairies went to five (Figure 1).

This increase of the supplied quantities, mainly in the dry season, was the result of intensification strategies based on an improved housing and feeding of dairy animals (la mise en stabulation) as shown in Figure 2.

Strategies of mini-dairies

Performances of mini-dairies refer to the use of specific processing techniques but also to strategies developed by processors. Those strategies aim at securing milk collection, increasing processing margins by reducing processing costs and diversifying the types of products sold on the market, and guaranteeing the products out-flow. Strategies often rely on social networks and contractual relations: familial relationships increase confidence in milk transactions; and processors sometimes provide credit and animal feeds to producers in order to increase commercial links (interlinking transactions).

Marketing strategies put emphasis on products differentiation. The market is dominated by fermented milk packaged in plastic bags (0,25 litre and 0,5 litre), a very convenient product for consumers compared with traditional fermented milk sold in bulk. The differentiation relies on commercial names and brands used by mini-dairies with reference to the rural cultural heritage (Kossam Puul Debbo - which means in Fulani the "Milk of Fulani Women" ; le Fermier - which means in French the "farm man" ; Jullam which means in Fulani "fresh milk". Packaging also mentions quality references such as "Pure cow milk", "Quality, hygiene, health" or "Local farm milk".

As a result, the use of local milk is also perceived as a mean to valorize local production and to develop rural micro-enterprises in the region.

Perception of the quality of the products

Products from mini-dairies are better perceived by consumers in Kolda than fermented milk made from powder milk. This quality differentiation relies mainly on the hygienic quality. Hygiene is the main reason for purchasing products from mini-dairies for 71.5% of consumers (Marpeau 2001). The hygienic quality is judged through the packaging. Consumers pay more and more attention on the packaging, and especially on the DLC (date limite de consommation) (expiry date). Consumers also believe that farm milk used by mini-dairies is better than powder milk: 79 % of them consider that the local milk-based dairy products are of very good quality (Sissokho and Sall 2001).

However, an important shift exists between quality attributes perceived by consumers and objective characteristics. With regards to the hygienic quality, recent bacteriological investigations (Seck et al 2002) show a high level of bacterial contamination of fresh milk with 85% of samples contaminated by Coliforms. In the condition of mini-dairies, Seck et al (2002) showed that pasteurization reduced the level of contamination but did not guarantee total elimination of potential dangers: bacteriological account was reduced by pasteurization on average from 107 to 104 cfu/ml, contamination with Coliforms from 105 to 102 cfu/ml, with Escherichia coli from 102 to 101 cfu/ml, and with Staphylococcus from 102 to 101 cfu/ml. Salmonella spp and Listeria spp were eliminated by pasteurization, whereas contamination by Bacillus cereus was not reduced by the pasteurization.

This situation refers to strong asymmetries of information. The lack of institutions and consumers' organizations likely to inform consumers and to guarantee acceptable quality standards explain this situation and might increase transaction costs. The nutritive quality (fat and protein composition) is not mentioned on products packaging.

Prices of the products

Those quality differences explain the huge price disparities as mentioned in Table 2 below.

Traditional fermented farm milk has the lowest retail price, just under imported powder milk. Fermented milk from mini-dairies is more expensive than those, which refers to the quality perception discussed in the former section.

As a result, the economic performances of mini-dairies are relatively high, as discussed in Dieye et al (2003). The economic efficiency explains the rapid development of those enterprises in the region (Figure 1).

Discussion

Mini-dairies: a motor for supply stimulation

Milk production is a key element of the pastoral tradition of Fulani people. Milk is highly consumed by agropastoral populations and might represent the food basis for several months of the year, especially in the context of Kolda. This self-consumption is economically very important, but milk is also the most direct source of external revenue for Fulani livestock keepers, before live animals. Milk constitutes the most "liquid" part of their production, from a monetary point of view (Vatin 1996). The possibility, through milk sales, to mobilize incomes for immediate needs explains the interest of milk producers (or their wives) to opportunities offered by changes in milk outlets.

Milk processing at the farm level facilitates obtaining milk revenue from traditional products and contributes to development of the milk production in rural areas where structured markets do not exist (O'Mahony and Peters 1987). In Kolda, this traditional trade is the basis of the contribution of milk producers to the market economy. However, the development of mini-dairies offer new opportunities for this market integration. Milk processors offer to producers a chance to maximize their incomes from milk production: mini-dairies represent a more regular and reliable outlet than traditional market sales, in dry season and in rainy season. Processing reduces the uncertainly and the irregularity of milk income (Vatin 1996). By reducing the market risks, milk contracts with processors offer opportunities to invest in new practices and in technical innovations.

The challenge of competitiveness and the need to improve quality

In the context of Kolda, quality considerations are essential for the competitiveness of mini-dairies facing imported products. The perceived quality is the sum of all knowledge, beliefs and feelings that someone can have about a particular product (Panigyrakis 1986). This knowledge, beliefs and feelings are related to information on the defined products. Information might refer to different levels of attributes such as the color, the packaging, the brands and the seller. The main constraint for the realisation of transactions concerns the "costs of measures" of the different attributes because of asymmetries of information (Barzel 1982).

In order to reduce those "costs of measures", mini-dairies underline the local specificity of their products. More than developing quality standards based on exogenous norms, they generate new quality references and specific products. This current construction of local quality standards is based on the African pastoral heritage, and has been observed in other contexts in the region (Duteurtre 2004). Official institutions should take into consideration this quality dynamics managed by small local enterprises. These quality mechanisms will certainly continue to play an important role in the competitiveness of local milk products on African markets.

Conclusion

• The development of improved milk production systems around secondary cities such Kolda in southern Senegal (Ba Diao et al 2002; Dieye et al 2002) is largely dependant on the emergence of the processing sector. Since 1996, mini-dairies have been an essential link of the local development process around Kolda, offering new outlets and stimulating innovations in local milk production systems.

• In this process, quality appears to be of primary interest, as it is an important factor of the competitiveness of products from mini-dairies on the market of Kolda, in addition to price. Fermented milk sold by those mini-dairies is very well perceived by local consumers and is very well differentiated by packaging, brands and others attributes. Thus, the emergence of mini-dairies leads to the development of a new market segment.

• Marketing mechanisms are therefore a key element in the transformation of production systems. More attention should be paid to this part of the sector, and especially to the promotion of the specific quality of local made products.

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