THE CAMEL MILK
INDUSTRY IN KENYA
Results of a study commissioned by SNV to explore the potential of
Camel Milk from Isiolo District to access sustainable
formal markets
By
Muli Musinga
David Kimenye
Peter Kivolonzi
November 26, 2008
Table of Contents
Executive Summary
……………………………………………………………………….
Acknowledgements
……………………………………………………………………….
Abbreviations and acronyms
………………………………………………………………
iii
viii
ix
1.
1.1
1.2
1.3
1.4
INTRODUCTION ……………………………………………………………………….
Overview …………………………………………………………………………………
Background ………………………………………………………………………………
Study objectives …………………………………………………………………………
Study methodology ………………………………………………………………………
1
1
1
2
3
2.
2.1
2.2
2.3
2.4
2.5
CAMEL MILK IN KENYA: An Overview …………………………………………….
Overview ………………………………………………………………………………..
The population of camels ………………………………………………………………
Production and supply of camel milk
…………………………………………….
Demand for camel milk
………………………………………………………………
Demand-supply gap
………………………………………………………………
4
4
4
11
16
20
3.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
THE CAMEL MILK VALUE CHAIN
…………………………………………….
Overview ……………………………………………………………………………….
Production ……………………………………………………………………………….
Milk assembly, bulking and transportation ………………………………… …………
Processing ……………………………………………………………………………….
Wholesale and retail trading ………………………………………………………………
Input supply
……………………………………………………………………….
Service providers ……………………………………………………………………….
Summary ………………………………………………………………………………..
21
21
21
34
40
41
45
46
46
4.
4.1
4.2
4.3
POLICY, REGULATORY AND INSTITUTIONAL FRAMEWORK
…………
Overview ……………………………………………………………………………….
Policy and regulatory environment ……………………………………………………..
Institutional framework
………………………………………………………………
48
48
48
49
5. THE CAMEL MILK SUB-SECTOR MAP ………………………………… …………
5.1 Overview ……………………………………………………………………………….
5.2 The Sub-sector Map
………………………………………………………………
5.2.1 Channel 1: Raw milk to rural consumers
………………………………… ….
5.2.2 Channel 2: Raw milk to low-end urban market …………………………………….
5.2.3 Channel 3: Pasteurized milk to high-end urban health market
……………………
56
56
56
58
59
60
6.
6.1
6.2
6.3
SUB-SECTOR DYNAMICS
………………………………………………………
Overview ………………………………………………………………………………..
Driving forces
……………………………………………………………………….
Points of leverage ……………………………………………………………………….
62
62
62
64
7.
7.1
7.2
7.3
7.4
KEY CONSTRAINTS AND OPPORTUNITIES ……………………………………….
Overview ………………………………………………………………………………..
Major Constraints ……………………………………………………………………….
Key opportunities ……………………………………………………………………….
Potential interventions ……………………………………………………………………
68
68
68
71
73
References …………………………………………………………………………………….
75
APPENDICES
Appendix 1:
Appendix 2:
Appendix 3:
Annex 1:
List of persons and institutions interviewed
Study methodology and instruments
Study Terms of Reference
Field Notes (attached as a separate report)
ii
Executive Summary
In September 2008, the Netherlands Development Organization (SNV) contracted a leading
Kenyan development consulting company, Resource Mobilization Centre (RMC), to
undertake a value chain analysis of the camel milk sub-sector in Kenya with a focus on milk
originating from Isiolo District. The main purpose of the study was to explore the potential of
camel milk from Isiolo District to access sustainable formal markets and, in so doing,
establish whether the value chain presents a business case for investment by the private sector
and development agencies interested in increased livelihoods of pastoral communities and
other actors involved in the value chain. For SNV, this information is expected to assist its
Northern Kenya portfolio in making a decision on whether there is sufficient justification for
its involvement in the camel milk sub-sector and, if so, the priority areas for intervention.
Using the value chain analysis (VCA) research methodology, the study was carried out over a
period of 30 days in the months of September and October 2008. Both secondary and primary
data was collected covering the whole camel milk value chain from production to the market
as well as the policy, regulatory and institutional framework under which the sub-sector is
operating. From a careful analysis and interpretation of information obtained from these
sources, the study team makes the following seven main conclusions:
1. The camel milk sub-sector is large and has the potential to permanently change the
livelihoods of poor communities living in Kenya’s arid and semi arid lands.
Kenya has the fifth largest camel herd in the world estimated to number 1.06 million
traditionally kept by the Somali, Rendille, Gabbra, and Turkana communities living in the
country’s harshest arid and semi-arid lands of North and North-Eastern Kenya which are
also ranked as the poorest parts of the country. Camel milk production in 2007 is
estimated to have stood at over 340 million litres valued at over Ksh 8 billion at the farm
level. This estimate makes the camel milk sub-sector much larger than cotton and
pyrethrum sub-sectors put together, and only comparable to much bigger sub-sectors such
as coffee. The fact that camels thrive in the harshest of Kenya’s agro-ecological zones
and is generally able to withstand the frequent droughts which decimate cattle, goats and
sheep populations, continuing to produce decent quantities of milk places camels as
perhaps one of the most suitable avenues through which increased livelihoods of
communities living in these arid lands can be achieved. This is a potential that has already
been recognized by a number of pastoral communities, and camels are now slowly
spreading to other parts of the country – Laikipia, Samburu, Pokot, Kajiado, Narok and
many other parts of Kenya. This is therefore a sub-sector that deserves much higher
attention than it is currently getting from government and development partners.
2. Only a small proportion of the potential of Kenya’s camel milk sub-sector is currently
tapped
An analysis on what happens to the camel milk currently produced shows that only 12%
of the milk is marketed, the bulk of which is sold in raw form to rural consumers (10%)
and only 2% reaches urban consumers. From the remaining milk (88%) that does not
reach the market, 38% is directly used by camel keeping households and their herders as
part of their food requirements and the remaining 50% (or 170 million litres) goes to
iii
waste1. This roughly means an opportunity for increasing the incomes of camel keeping
communities by Ksh 4 billion annually is lost at current level of development of the
sector. Yet the current production level is even far below the full production potential of
the camel milk sub-sector and therefore, the lost opportunity is likely to be several times
higher than what is reported here. Tapping into this potential even modestly would mean
billions of Shillings in the hands of camel keeping households and other stakeholders in
the value chain.
3. There is a big unmet demand for camel milk in Kenya and internationally
Camel milk is currently reaching the market through three main channels. The first is an
informal channel under which raw milk from both small and large-scale camel herders is
handled by informal traders (almost 100% women) to urban consumers, largely
comprising the Somali community in Nairobi’s burgeoning Eastleigh estate (and business
hub) where most of it is bought by households and restaurants, and a smaller but
increasing proportion is forwarded to other estates in Nairobi and other urban areas as far
as Kampala, Uganda. This channel currently handles about 70% of marketed camel milk
from Isiolo District and is fairly efficient with fresh milk delivered to consumers in
Nairobi in two days at fairly competitive prices of Ksh 80 per litre compared to farm-gate
prices of Ksh 25-30. Estimates show that this channel (currently handling about 4,000
liters per day) is meeting only 20-25% of current demand. The current market can take
up to 20,000 litres of raw milk per day even without any further development. At current
prices, this is a business worth Ksh 1.6 million per day – or Ksh 0.6 billion in a year and
the potential for growing this business several times over through well targeted market
development efforts seems high.
The second channel represents pasteurized, high quality camel milk from quality
conscious small and large-scale producers mainly in Laikipia District processed by the
only camel milk processing plant in Kenya (Vital Camel Milk Limited based in Nanyuki)
for high-end urban consumers in Kenya and Internationally. Although this channel is the
smallest and currently accounts for only about 5% of marketed camel milk from Isiolo
and its environs, it represents the highest potential for growth and impact. Driven by the
increased international recognition of camel milk as a natural health product in treatment
of diabetes and a number of other ailments, the potential demand for camel milk for this
market segment nationally and, even more so, internationally is estimated to be far higher
than the 300 million litres of camel milk currently produced in the country annually. All
indications are that with proper market development, camel milk from Kenya can
effectively penetrate the international health market which would make camel milk a high
value commodity offering sufficiently high returns to players to justify the significant
investments required in developing the sub-sector.
The third channel is a raw milk rural consumer channel where raw milk is supplied
directly by producers or through intermediaries to rural households and restaurants.
Estimates place the current volume handled under this channel at around 25% of
marketed milk from Isiolo District. Prospects for growth of this channel are also positive
although not as high as in the other two channels. Positive growth is expected as a result
1
The term ‘wasted’ should be treated with caution in the case of camel milk as it largely refers to milk which
could have been milked from the camels but was not extracted due to lack of a market after the household milk
needs were met. These computations do not include milk that is suckled by the calves, but rather, milk that
could be extracted from the lactating herd.
iv
of increased acceptability of camel milk among non-traditional camel keepers and,
indeed, as the only milk available in arid lands during drought periods. The main limiting
factor in the growth prospects in this channel are as a result of its close correlation to
growth in rural incomes and population which are likely to remain modest in the short
and medium term.
4. There are six main constraints inhibiting realization of the potential of the camel milk
sub-sector in Kenya
Although there are many factors constraining the development of the camel milk subsector, the following six are the main ones: low milk productivity; low quality of milk;
poor organization of actors in the chain; poor business orientation of producers;
inadequate physical and institutional support infrastructure; and poor market
development. From a combination of these factors, the majority of smallholder milk
producers are unknowingly making losses in their activities related to camel milk
production and profitability among all other players in the value chain are low. From
these factors also, the high growth potential pasteurized milk channel is struggling to
survive and massive losses have so far been incurred which threaten collapse of the entire
channel.
5. The constraints facing the camel milk sub-sector require a value chain approach to be
effectively addressed
A careful analysis of the constraints facing the camel milk sub-sector shows that most of
them are cross-cutting and cannot be effectively addressed through piecemeal
interventions which do not take a holistic view of the interconnectedness of actors in the
value chain. At the foundational value chain segment of production, low milk
productivity among farmers is tied to issues of market access, poor organization of the
producers as well as traders to collect the milk, and also to poor development of support
infrastructure. This in turn has resulted to only small volumes of milk getting through the
value chain which is adversely affecting profitability among all other players in the chain.
A similar situation also applies to the issue of poor milk quality and so do the other
constraints. The starting point in addressing these constraints to pave way for increased
competitiveness of the sub-sector is for all actors to realize that their fate is tied together –
they fall or rise together. Unless actors have a common vision and strategy for
development of the sub-sector and agree to work together towards its realization, the
camel milk value chain will remain with its great potential but players will continue
struggling with low profitability, losses, and poverty at the producer level. Acting
together will mean significant prospects for increased growth and competitiveness of the
sub-sector with increased share of benefits for all actors.
6. There are significant opportunities in the camel milk value chain which can be built upon
to hasten development of the sub-sector
A careful analysis of the camel milk value chain suggests that significant opportunities
for private and public sector interventions in the sub-sector revolve around five broad
areas. The first opportunity relates to the large unmet demand in the urban market for raw
milk (in Eastleigh) which, at current prices, is a business opportunity worth Ksh 1.6
million per day – or Ksh 0.6 billion in a year and there seems to be high prospects for
growing this business several times over in the medium term. Unmet demand in the high-
v
end health market is even higher. The second opportunity relates to the enormous
potential of increasing camel milk supply in the immediate and short term without any
need for a lengthy gestation period. The milk is already there, and what is required are
investments in market access and organization of players to trigger increased extraction
and supply of milk in the value chain. The existence of identifiable and well established
system nodes in the value chain for leveraged interventions is another opportunity area.
Key leverage points include two rapidly commercializing production clusters in Isiolo
District (Mlango-Ngarentare-Burati areas in Central Division and Kulamawe in Kinna
Division); the Isiolo bulking and cold storage hub currently handling 4 tonnes of milk
every day even during the dry season; and the Eastleigh informal camel milk market
concentrated in 7th, 12th and Jam streets. All these present important intervention points
which could unlock the entire sub-sector’s potential. The fourth opportunity is
represented by an emerging trend in commercialization of camel milk production where
lactating camels are kept close to the Isiolo market or along milk collection routes. This
increased market orientation of producers provides tremendous scope for provision of
market based solutions in tackling production related constraints including provision of
business services, and the yet to be developed supplementary feeding business for camels.
The Draft Bill on dairy sector which seeks to bring in camel milk under dairy sector
regulation is also a significant opportunity for stakeholders in the sub-sector to start readjusting their operations to address key issues of milk quality which are currently stifling
prospects for significant market expansion of the sub-sector.
7. There is a strong business case for private and public investment in the camel milk subsector
An analysis of the camel milk sub-sector shows strong justification for interventions in
five broad areas:
(a) Increased milk productivity among camel keepers
Priority interventions here include:
(i)
Farmer awareness and education on the business sense of increased productivity.
This should be packaged within the framework of turning camel milk production
into a profitable business which could cover productivity as one of the essential
components along with others, such as herd structures.
(ii)
Establishment of strong farmer organizations for joint action in market access to
justify investments towards increased production.
(iii)
Support for increased capacity of the Isiolo Holding Ground as a facility that can
nurture and entrench current trend of producers to maintain lactating herds within
easy reach of the market.
(iv)
Support for increased availability of camel milk business development service
providers able to advise farmers not only on husbandry issues but also on business
practices, market access and farmer organization.
(v)
Facilitate increased accessibility of financial services to camel milk producers and
other actors in the value chain.
(i)
(b) Increased availability of quality camel milk
Facilitate investment in better workspace for traders in the Eastleigh camel milk
market. In liaison with the City Council, identify interested investors (private
sector or otherwise) to develop clean and high quality structures for handling
camel milk similar to the concept used in cow milk bars or the increasingly
vi
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(i)
(ii)
(i)
(ii)
(iii)
(i)
(ii)
(iii)
popular fruit kiosks (such as those near Nairobi Hospital). A popular model used
is a private developer to invest in construction and lease to current operators.
Support market-based awareness campaigns to stimulate demand for quality
camel milk among consumers.
Facilitate development of simple and easy to use testing equipment for camel milk
quality.
Support information dissemination and awareness campaigns on the need for high
quality standards in milk production and supply, and on ways of ensuring quality.
Facilitate acquisition of appropriate milk handling containers among producers
and other players in the value chain.
Facilitate increased availability and utilization of a cold chain for camel milk
covering milk collection points, bulking centres and transportation.
Support mechanisms for setting of appropriate quality standards in camel milk and
their enforcement – both by players (self regulation) as well as by authorities.
Facilitate investment in basic packaging of camel milk for ease in quality
transportation and distribution to consumers.
Support entry of commercial providers of suitable camel milk transport services
with sufficient capacity to handle available milk to the market.
(c) Interventions for increased market development
Facilitate development of a market development strategy – for both domestic and
export markets;
Support mechanisms for increasing the supply of quality milk for the pasteurized
milk channel to support private sector efforts for building a sustainable
penetration to the international market
(d) Sector organization
Facilitate formulation of a joint vision and strategy for development of the camel
milk sub-sector.
Support establishment and strengthening of stakeholder common interest groups
at production, product assembly and trading levels.
Facilitate establishment and capacity development of a resource centre for
information on camels. This is in recognition of the rapidly building body
knowledge on issues related to camel both in Kenya and internationally generated
from research and other empirical works which currently remain scattered and
unorganized for effective utilization by stakeholders in the sector.
(e) Increased visibility and recognition of the camel milk industry
Support stakeholder engagement with government to lobby for increased
recognition and support for the sub-sector.
Support selective publicity to raise visibility of camel milk sub-sector among
policy makers, development agencies and the general public.
Facilitate stakeholder support for increased resources for research and
development on issues related to the camel industry in Kenya. This should include
support for improved diffusion of research results into better practices in all
segments of the camel milk value chain.
vii
Acknowledgements
The study team would like to acknowledge the contribution of the many people who actively
participated in making the execution of this task a success. While it is impossible to mention
all those who contributed in one way to another, we would like to mention Messrs Charles
Naimoi and Thomas Were for providing invaluable technical support, giving honest
feedback, and ensuring logistical support was always available when we needed it.
Special acknowledgement also goes to the entire management, staff, partners and
stakeholders who shared their candid views and comments about the camel milk value chain.
Without such sharing, the consultants would not have gained sufficient understanding to
undertake this assignment. Kindly accept our sincere gratitude.
Finally, we sincerely thank the drivers and all of you who participated and contributed in one
way or another to make this assignment possible.
However, any problems with reference to the report are ours and ours alone. We recognize
that the SNV management has the prerogative not to accept all our suggestions and
recommendations.
Resource Mobilization Centre
viii
Abbreviations and Acronyms
AA
Automobile Association (of Kenya)
AfDB
African Development Bank
ALLPRO
ASAL-Based Livestock and Rural Livelihoods Support Project
ALRMP
Arid Lands Resource Management Project
ASAL
Arid and Semi Arid Lands
BDS
Business Development Services
BSMDP
Business Services Market Development Program
DANIDA
Danish International Development Agency
ENNDA
Ewasso Ng’iro North Development Authority
FARM Africa
Food and Agricultural Research Management (FARM) – Africa
Department for International Development (of the British Government)
DfID
FHK
Food for the Hungry – Kenya
GoK
Government of Kenya
ILRI
International Livestock Research Institute
KARI
Kenya Agricultural Research Institute
KCA
Kenya Camel Association
KEMRI
Kenya Medical Research Institute
Ksh
Kenya Shilling (Kenyan currency exchanging at 76.6361 to the US$ on
November 5, 2008)
MESPT
MoLD
PPA
PRA
SNV
USAID
VCA
VCML
Micro Enterprises Support Programme Trust
Ministry of Livestock Development
Participatory Poverty Assessment
Participatory Rural Appraisal
Netherlands Development Organization
United States Agency for International Development
Value Chain Analysis
Vital Camel Milk Limited
ix
1
INTRODUCTION
1.1 Overview
This report presents findings of a Value Chain Analysis of the Camel Milk sub-sector
commissioned by the Netherlands Development Organization (SNV) in September 2008 to
explore the potential of camel milk from Isiolo District to access sustainable formal markets.
The study was undertaken by a team of three senior Consultants from Resource Mobilization
Centre (RMC) over a period of 30 days beginning September 22, 2008 using a participatory
approach that covered all key players in the camel milk industry. Interviews were held with
over 70 key informants including herders, camel owners, input suppliers, processors, traders,
consumers, and officials of relevant government bodies, sector associations and development
agencies involved in camel milk development (see Appendix 1). Field work was carried out
in Isiolo District, Nanyuki (camel milk processing plant) and Nairobi. The study also
involved a review of available secondary information on the camel sub-sector in Kenya and
other parts of the world. It is information from these sources that the basis on which this
report has been prepared.
1.2 Background
The Netherlands Development Organization (SNV) is an international not-for-profit
development organization which provides capacity development services to nearly 2,500
local organizations in over 33 countries worldwide to support them with the fight against
poverty. SNV is dedicated to a society where all people enjoy the freedom to pursue their
own sustainable development. SNV advisors contribute to this by strengthening the capacity
of local organizations. The focus of SNV on these organizations is underpinned by the fact
that they play a key role in reducing poverty in a sustainable manner and in improving the
lives of the poor. Therefore, SNV aims to:” support local actors to strengthen their
performance to effectively realize poverty reduction and good governance”. SNV operates in
nine countries in the East and Southern Africa (ESA) region including: Ethiopia, Kenya,
Sudan, Uganda, Tanzania, Rwanda, Zambia, Zimbabwe and Mozambique.
In Kenya, SNV focuses most of its capacity building support to the Arid and semi-arid areas
of the country. Specifically, SNV currently operates in three portfolio offices namely: South
Rift, located in Nairobi but serving the districts of Kajiado, Narok and Transmara; North Rift
located in Eldoret, serving the districts of Keiyo – Marakwet, Pokot, Turkana; and Northern
Kenya located in Nanyuki, serving the districts of Samburu, Marsabit, Laikipia, Isiolo and
Moyale.
In its contribution towards development efforts and overall poverty reduction, SNV Kenya
embraces specific country level poverty reduction goals, targets and governance policies and
has chosen to place all its work in two broad impact areas namely:
Access to basic services -Education, water and sanitation, and
Economic Development - along two value chains of the Livestock and Tourism sectors
Within the livestock value chain, SNV has been aware of the significance of camels in the
livelihoods of pastoralist communities in Northern Kenya and in 2006 the Northern Kenya
portfolio initiated discussions with a number of stakeholders in the camel milk sub-sector to
explore possibilities for its involvement. After preliminary discussions will key stakeholders
in the value chain of camel milk originating from Isiolo District, SNV entered into a
Memorandum of Understanding with the Vital Camel Milk Limited – the only camel milk
processing plant – to support its initiatives of sourcing quality camel milk from producers in
Isiolo District. From a combination of factors however, VCML stopped sourcing milk from
smallholder producers in Isiolo District and therefore the initiative with SNV fell through.
From available information on the sub-sector suggesting that only a small proportion of milk
produced in the district is able to access the market, SNV has continued to feel that focused
interventions in the camel milk value chain could assist in unlocking the immense potential of
the sub-sector. It is to make an informed decision on whether there exists a business case in
intervening in the sector and, if so, the specific areas deserving priority attention that SNV
has commissioned the study on the basis of which this report has been prepared.
1.3 Study Objectives
The focus of the study was to analyze and document the Camel Milk Value Chain that
originates from Isiolo District. In essence, the study sought to establish whether there is a
business case in the camel milk value chain (are the poor, especially producers, able to make
money through camel milk?). This was to be ascertained by gathering data and documenting
business opportunities that exist for the producers as well as for SNV (and other actors) to
facilitate increased competitiveness in the camel milk sub-sector (using sustainable marketbased solutions).
In addition, the study identifies leverage points along the chain that can make the chain
sustainable and competitive. Also, the study gathers sufficient information that would be
desirable to a strategic private sector investor whilst remaining cognizant of the sectors'
potential role in addressing poverty reduction.
The specific terms of reference for this assignment include to:
1) Assess the current status of Camel milk production and marketing in isiolo
District;
2) Identify the actors, their roles and current functions, and interrelationships along
the value chain (including governance aspects) (from the producers within the
district to the destination market, including the different services providers along
the chain) and document the graphical presentation of the Sub sector;
3) Map out the key drivers of the camel milk value chain and document the graphical
presentation of the Sub sector;
4) Identify and analyze the constraints (efficiency and effectiveness) along the value
chain with emphasis to existing market delivery channels whilst highlighting
opportunities for strengthening its access to markets. The constraints should be
presented along key aspects such as technology, market access, organization
management, policy/regulation, finance, input supply and infrastructure among
others;
5) Identify and discuss market based solutions that would enhance the performance
and economic viability of the desirable camel milk value chain;
6) Identify existing and potential service providers along the value chain;
7) Identify and analyze the significance of micro, small and medium enterprises, and
lead firms involved in camel milk and the current and potential role of women in
the chain; and
11
8) Provide input for a one day validation workshop on the study.
The complete terms of reference the study are attached to this report as Appendix 3..
1.4 Study Methodology
The study was carried out by three Senior Consultants from RMC assisted by two Research
Assistants. Their approach and methodology in undertaking the study included:
Meeting senior management of SNV in order to fully understand their requirements
and develop an agreeable work plan for the assignment;
Collecting and reading literature from SNV in order to better understand the sub
sector;
Searching in the Internet and elsewhere for relevant additional data on the sub sector;
Developing study instruments and data gathering tools and sharing with the SNV
management for approval before visiting the field;
Visiting and collecting primary data in the field through observations, one-on-one
interviews, focus group discussions, and telephone interviews among other methods.
These interviews were carried out with value chain actors in Isiolo District, Nanyuki,
Eastleigh, super and mini markets, and in institutions;
The team members holding meetings to discuss their findings and recommendations,
critique each others work, and identify critical gaps that needed to be filled as part of
data collation and quality check and a way of ensuring the TORs were fully
addressed;
Drafting and sharing the first draft report with the SNV management for feedback;
Meeting the SNV management in Nanyuki for presentation of preliminary analysis
and a de-brief;
Stakeholder vetting and strategic workshop held in Nairobi on November 20, 2008 to
discuss results of the study and map out a way forward for development of the subsector. This workshop brought together over 70 key stakeholders in the camel milk
sub-sector including producers, processors, traders, researchers, government and
development agencies.
Continuously and closely working with the SNV management in the development
and finalization of the report.
12
2
CAMEL MILK IN KENYA:
An Overview
2.1 Overview
This section provides an overview of the camel milk sub-sector in Kenya by exploring the
distribution of camels in the country, the production and supply of milk, and an assessment of
current and potential demand for camel milk to show the extent to which there exists a
demand-supply gap. While the focus of the study was Isiolo District and its environs, for
purposes of contextualization, the section opens with an overview of the global perspective
and narrows down to the Kenyan context before focusing on issues within Isiolo District. On
the supply side, a key issue explored in the section is the existence of production clusters
within which leveraged interventions can be targeted, while on the demand-side, the various
segments of the market and prospects for growth within each are some of the key areas of
focus.
2.2 The Population of Camels
(a) The Global Perspective
The Food and Agriculture Organization (FAO) estimates the total population of camels in the
world today to be 22 million, of which 89% are one-humped dromedary camels and the
remaining 11% are the two-humped (camelus bactrianus) generally found in the cold deserts
of Asia. Although historical records show that the domestication of camels first took place in
the Arabian peninsula about 3000 years ago from where they spread to other parts of the
world, over 80% of the world’s camel population is today found in Africa with the highest
concentration in North East Africa which accounts for 63% of the world camel population
(Table 2.1; Chart 1). Kenya is estimated to have the fifth largest camel herd in the world
after Somalia, Sudan, Ethiopia and Mauritania, in that order. All camels found in Kenya,
estimated to number 1.06 million in 2007 are of the dromedary (one-humped) type.
Chart 1: World camel population, 2007
Global Distribution of Camels, 2007
Other
countries
25%
Somalia
32%
Camel types
Camelus
bactianus
11%
Pakistan
4%
Kenya
5%
Mauritania
7%
Ethiopia
10%
Sudan
17%
Camelus
dramedari
us
89%
Source: FAO Statistics, 2008 Database
13
Country
Africa
Somalia
Sudan
Ethiopia
Mauritania
Kenya
Chad
Mali
Niger
Algeria
Tunisia
Egypt
Eritrea
Other African Countries
Source: FAO Statistics, 2008
Table 2.1
World Population of Camels, 2007
Number of
Country
camels
18,304,243 Asia
7,000,000
Pakistan
3,700,000
India
2,300,000
Yemen
1,600,000
China
1,060,000
Saudi Arabia
749,500
United Arab Emirates
476,000
Mongolia
430,000
Afghanistan
265,000
Kazakhstan
230,000
Iran
120,000
Other Asian Countries
76,000 Other parts of the World
297,743 World Total
Number of
Camels
3,698,004
900,000
632,000
361,000
269,000
260,000
260,000
253,500
180,000
138,600
146,000
297,904
7,185
22,009,432
Globally, it is estimated that there are about 50 types or breeds of camels – usually classified
by naming them after the tribes that rear them, by their colour, geographical origin, physical
characteristics and even their different uses for milk, meat production or racing. In broad
terms however, camels may fall in one of the following three major categories:
• Back or work camel
• Dairy camel
• Riding or racing camel
From this categorization, the main economic value of camels is derived from their milk,
meat, use in transportation, and for riding in sports (racing), tourism or corps2. In general
terms however, milk and meat dominate the overall value derived from camels. Table 2.2
shows that global production of camel milk is about five times higher than of camel meat,
placing milk as the most significant product of camels.
Table 2.2
Global production in camel milk and meat, 2007
Country
Production (in Metric tons)
Country
Production (in Metric tons)
Milk
Meat
Milk
Meat
Africa
1,316,310
212,817 Asia
159,501
99,848
Somalia
870,000
44,000
Pakistan
Sudan
94,000
45,000
India
Ethiopia
175,000
14,000
Yemen
18,100
3,248
Mauritania
28,000
24,000
China
16,000
Kenya
32,500
19,800
Saudi Arabia
90,000
41,000
Chad
23,610
1,500
UAE
40,000
15,500
Mali
55,700
7,620
Mongolia
950
8,500
Niger
11,000
3,300
Afghanstan
5,400
3,800
Algeria
8,700
3,400
Kazakhstan
Tunisia
1,000
1,400
Iran
1,680
Egypt
40,000
Other, Asia
5,051
10,120
Eritrea
5,100
732 Other, World
50
160
Other, Africa
11,700
8,065 World Total
1,475,861
312,825
Source: FAO Statistics, 2008
2
Many countries with desert environments continue to have armed camel corps units among their troops.
14
Globally, the milk productivity of camels is five times lower than that of cattle. In arid zones
where camels are reared, however, the milk yield in camels is higher than in cattle. In
drought-stricken areas of the world (and particularly, Africa) where severe drought frequently
decimates cattle, sheep and goat populations, only the camel can survive continuing to
produce milk. Indeed, one of the most remarkable features of camels is their ability to
continue lactation, producing milk that is highly diluted with over 90% water content even
during periods of severe draught. In most other animals (ruminants such as cattle, sheep,
goats), the reservoir for milk water is lost for cooling and via faecal and urinary excretions. In
cattle, sheep and goats, the lack of water leads to cessation of lactation. A 600 kg camel,
however, has 200 litres of fluid in the alimentary tract, which is available for milk production,
giving up to 20 litres per day to guarantee ample food with the desired water and other
nutrients for their calves and humans as well over an extended period of 10 – 15 days without
water.
From an environmental perspective, camels are also far better suited than cattle, goats and
sheep in arid lands. Unlike these other livestock (and particularly goats, which chew to the
roots and denude areas around oases and other areas of concentrated herding), camels take
only a few bites from shrub/bush and then move on. They are therefore true browsers, not
destroying their habitat.
The foregoing are among the many factors (see Text Box 1) that are globally driving the
increased popularity and interest in camel production, particularly for milk. It is largely out of
this that the United Nations Food and Agriculture Organization (FAO) sees bright prospects
for camel milk, which could not only provide more food to people in arid and semi-arid areas,
but also give nomadic herders a rich source of income from the enormous demand for camel
milk and milk products which is rapidly building up, largely driven by the medicinal value of
camel milk in an increasingly health conscious world.
(b) The Kenyan Context
Chart 2 and Table 2.3 show the population of camels and their distribution in Kenya.
Although no credible camel census has been done in Kenya since the 1969 national livestock
census, MoLD has collected data that indicates the relative camel populations in the country
(see Map 1). As per this set of data, the leading district in camel populations is Wajir
followed by Mandera and Turkana. Isiolo is ranked 7th with a population of 40,460 camels in
2007.
Chart 2: Camel Population in Kenya
Camel Population by District
Population of Camels in Kenya: 1960 - 2007
1400000
Isiolo
4%
1200000
Tana River
6%
Camels
1000000
800000
Marsabit
8%
600000
Others
3%
Wajir
34%
400000
Garissa
10%
200000
0
60 70 80 90 00 01 02 03 04 05 06 07
Yrs
Source: FAO Statistics, 2008
Turkana
17%
Mandera
18%
Source: Ministry of Livestock Development, 2007
15
Text box 1: Some Key Tit Bits on Camel Milk
Tit bit 1: Milk Yield
Globally, the milk yield of camels is a controversial and hotly debated topic. In the scientific literature, daily
milk yield have been variously reported at between 3 and 40 litres. The great inconsistency is due to a variety
of misunderstandings and misconceptions. The facts are:
1. Although camel milk has been used for centuries, camels have never been systematically selected for their
milk quality. There are no large-scale camel dairy enterprises in the world.
2. Calves, which graze with their dams (mothers) for more than a year, will suckle approximately 10 litres
per day even when the calves start to graze. This fact is often not taken into account.
3. Lactating camels are not always regularly milked because the families of the owners and herders do not
require large amounts of milk, and markets for camel milk are not well established for selling surplus
milk. Even if milking is done every day, it is always incomplete, because only the amount required is
milked, and also because camel milking is also a heavy task, usually requiring two people per camel.
These practices of not emptying the udder usually lead to reduced milk production due to hormonal
influence.
4. Negative selection of milk camels: The poorest milkers are allowed to give birth once a year by mating
them shortly after parturition. These do not contribute to the milk support of the family while good
milkers are milked for more than a year without being mated, giving birth only once every 2 to 3 years.
This practice favours calves with negative genes for high milk yield.
5. Duration of milk let-down is very short – around two to three minutes. Milking from both sides is
therefore essential, while camels must be milked four to six times daily to gain optimal milk yield. This is
hardly done in most camel keeping communities.
Tit bit 2: Key factors affecting milk production
The factors affecting the milk yield of camels are those common to all dairy animals: genetic potential, health
and nutrition. Improving the genetic potential of camels is therefore a key priority in research towards
establishment of commercial camel dairies. Successful research in Israel, UAE, Saudi Arabia and other parts
of the world show that it is possible to breed dairy camels with a uniform mammary glad producing 30 to 40
litres of milk per day. With artificial insemination and embryo transfer technology, which has already been
successfully used in breeding camels for racing, this should be possible in the very near future.
Tit bit 3: Medicinal quality of Camel Milk
Camel Milk has over a long period been valued for its acclaimed medicinal properties which did not have
rigorous substantiation from proper scientific investigations. Increased research in camel milk in the recent
past has however yielded data that now provide scientific prove that camel milk contains properties suitable
for treatment of several ailments, including the following (Ulrich Wernery, Central Veterinary research
Laboratory, UAE):
(i)
Autoimmune diseases: multiple sclerosis, Crohn’s disease, Psoriasis, Lipus, Pemphigus;
(ii)
Allergies: Asthma, rash
(iii)
Juvenile Diabetes
(iv)
Infectious diseases like tuberculosis
(v)
Strengthening of the Immune system
(vi)
Stress: peptic ulcers
(vii)
Cancer: skin cancer: lotions or creams with camel fat may protect against cancer (cosmetics,
pharmaceuticals).
Tit bit 4: Camel Products
While the greatest amount of camel milk in the world is consumed fresh or as a naturally fermented product,
camel milk has a wide range of products that include the following:
1. Fresh raw or pasteurized milk. Pasteurized camel milk is in only a few countries in the world;
2. Fermented milk generally called Susa in North Eastern Africa (including Kenya);
3. Yoghurt
4. Cheese
5. Butter – made through centrifugation since camel milk does not cream up
6. Ice creams
7. Puddings
8. Chocolates of different flavours
9. Beauty products: anti-wrinkles creams; camel milk cleansing soap bars etc
16
In Kenya, the camel is traditionally, a Northern Districts animal kept mainly by people of
Cushitic ethnicity largely the Somali, Rendille and the Gabra. The Turkana are also
traditionally an important camel keeping community. Since the middle nineteen seventies,
however, camels stopped being the preserve of the inhabitants of Kenya’s North. Some
ranchers in Laikipia (e.g. Ol Maisor and Kisima) started keeping small numbers of camels for
bush control and supply of milk to their workers. Other ranchers followed suit and as at
today, a significant number of ranches (mostly in Laikipia District) stock camels, some in the
hundreds. Development projects, starting with the GTZ Wamba Food Security Project in
Samburu District, Freedom from Hunger/ Catholic Mission in East Pokot at Kositei and the
SNV Kajiado ASAL programme introduced camels in these districts. The FARM Africa
programme in Northern Kenya also supported the keeping of camels in areas where camels
had not been reared before. Significant initial resistance was observed in Maasai land but the
increased frequency of drought has, over time, served to convince them of the usefulness of
camels and, today, Kajiado boasts of a herd of more than 2,000 camels. Although there are no
official statistics on numbers, authoritative information indicates that camels have now spread
to many more districts of Rift Valley, Eastern and Coast Provinces than those reported in
Table 2.3.
Table 2.3
Camel Population in Kenya, 2007
District
Number
Per cent
Wajir
335,000
33.1%
Mandera
183,000
18.1%
Turkana
172,400
17.0%
Garissa
101,000
10.0%
Marsabit
84,300
8.3%
Tana River
58,000
5.7%
Isiolo
40,460
4.0%
Moyale
22,000
2.2%
East Pokot
7,700
0.8%
Samburu
3,800
0.4%
Laikipia
2,300
0.2%
Kajiado
2,300
0.2%
West Pokot
1,000
0.1%
Baringo
204
0.0%
Narok
94
0.0%
Total
1,013,558
100.0%
Source: MoLD Annual Report, 2007; Kenya Camel Association, 2008
Breed
Somali
Somali
Turkana
Somali
Gabbra/Rendille
Somali
Somali
Gabbra/Rendille
Mixed
Somali
Somali
Somali
Mixed
Mixed
Somali
Breeds: Kenya has three main sub-categories or breeds of camels. These are associated with
the ethnic groups which traditionally kept camels - the Somalis of North-Eastern Province;
the Oromo Gabbra and the Rendille sub-tribes of Marsabit and Moyale Districts; and the
Turkana of Rift Valley. Camels which originated from among the Somalis are referred as
Somali breeds and are generally much larger than other breeds in the country with adult
females weighing between 500 – 600 kg and males 600 – 800 kg. The Somali breed has the
highest milk yield estimated at 5 – 8 litres per day (Farah Z. et al, 2004). Camels kept by the
Gabbra and Rendille are referred as Gabbra/Redille (G/R) breed and are generally smaller
than the Somali breed with adult females weighing 350 – 450 kg and males 400 – 500 kg.
Milk yield is also lower averaging 3 - 4 litres per day for a lactation period of 12 months. The
Turkana breed is the smallest camel found in Kenya averaging 350 kg for females and 400 –
450 kg for males. Milk yields are also much lower with yields averaging 2 – 3 litres per day
over a lactation period of 9 to 10 months. Besides these three main traditional breeds found in
Kenya, some ranches have introduced Pakistani dromedaries in order to improve milk
17
production through crossbreeding and these crossbreeds are now also found among some
pastoral communities.
Map 1
18
Chart 3 shows that the Somali breed accounts for the largest proportion of camels in Kenya
followed by Turkana and the Gabbra/Rendille breeds. On the whole however, camel breeds
in Kenya are highly mixed through sales, stock exchanges and even rustling.
C h art 3 : C am e l b re e d s in K e n ya
T u r k an a
18%
G /R
11%
S o m ali
71%
Source: MoLD, 2007
(c) Camels in Isiolo District
The greater Isiolo District (comprising Isiolo and the newly created Garbatulla Districts) is
largely inhabited by Turkanas, Somalis, Boranas and Samburus. All these groups keep
camels. Findings of this study corroborate results of a 2006 Isiolo District Livestock Survey
by ALRMP which indicated that most of the camels kept in the district are of the Somali
breed. There are however a few camels of the Turkana breed kept by Turkanas. A few
Pakistan-Somali crossbreeds were also observed in the Chumvi area of the Central division of
the district. Since the Somali breed of camels is known to have higher milk yields than the
other breeds in Kenya, it can therefore be argued that the district is well placed for camel
milk production.
The greater Isiolo is a predominantly cattle keeping area where camels were largely
introduced only in the last two - three decades. Although there is no full agreement on which
divisions of the district were keeping most camels at the time of this study, there is some
consensus on where camel keeping is quite established. This situation is largely as a result of
the fact that camels are an extremely mobile animal and there are frequent movements of
camels from division to another, largely in search of pasture but also as a result of security
reasons. Available data (see Table 2.4) shows that the Central division leads in camel
population. It is closely followed by Kinna (with Kulamawe location), and Garba Tulla. The
data shows a fairly constant population except in 2005 when the population reduced
following the drought and ethnic tensions of 2004. At the time of this study which was done
during the height of the dry season (September/October), the areas with high concentration of
camels were: the Kula Mawe location of Kina Division (about 7000) camels Gotu area
(2000), the central division areas between Isiolo town, Gambella, Shab, Lombolio (10,000),
Chumvi area, the Isiolo Holding ground and the areas bordering Meru North districts (3000)
19
- some were pasturing in Meru North district areas of Kangeta where camel owners had hired
Euphorbia fences for browsing by their camels.
The total population of camels in Isiolo district was estimated at 40,460 in 2007 making it the
district with the seventh largest camel population in Kenya. Even with the seventh position,
the district has a paltry 3.8% of the Kenyan herd and from relative perspective should
actually be an insignificant contributor to marketed camel milk in the country. This is
however not the case as this study shows that Isiolo currently contributes to more than 90%
of marketed camel milk reaching national urban markets. Various reasons can be given for
this unusual contribution. These include the proximity to Nairobi, good tarmac road, the
market orientation of the Somali segment of the Isiolo population, among others. While these
reasons are plausible and significant, the study team is strongly of the view that these are
merely factors that have facilitated continued commercialization of the camel milk value
chain from Isiolo. Our take is that the commercialization of the Isiolo milk cluster represents
the typical growth and commercialization of production clusters. It is highly possible that, the
trigger for commercialization of this cluster may have come from the business community of
livestock traders; the donor community or even a much less significant factor. This is
generally what happens to clusters – the trigger is many times not necessarily a significant
factor, but what is important is the existence of facilitative environment for growth which can
be replicated to stimulate growth of other clusters.
Table 2.3
Population of camels in Isiolo District, 2004 - 2007
Division
2004
2005
2006
Central
10,400
3,200
10,100
Kinna
8,300
7,300
8,060
Merti
4,160
9,400
4,000
Sericho
5,200
5,600
5,040
Garba Tulla
6,200
5,600
6,050
Oldonyiro
3,640
3,200
3,530
Total
37,900
34,300
36,800
Source: MoLD, Annual Report Isiolo District, 2007
2007
10,400
6,200
4,160
5,200
6,200
8,300
40,460
2.3 Production and Supply of Camel Milk
There is general agreement that there is no adequately reliable estimate of camel milk
production in Kenya. Production figures reported by the FAO (Table 2.2) are seen as gross
understatements possibly only capturing estimated marketed camel milk. The Ministry of
Livestock Development reports a production of 220 million litres based on the 810,000 herd
size of 1999/2000 (Livestock Policy Paper, 2008). The study team therefore used available
information and combined it with own field findings along with the extensive experience of
the lead animal production consultant in the team3 to make its estimations. Estimates were
built considering: the estimated camel population, the predominant breed in the district and
its milking potential, the proportion of lactating camels and milk yields corrected for lactation
length. To obtain a gross value, estimated farm gate prices were used derived from various
sources including a 2006 AU-IBAR/NEPDP Kenya Livestock sector Study. This information
is shown in Table 2.4.
3
Dr. David Kimenye has over 30 years experience in animal production in Kenya, many in Northern Kenya
20
Map 2
Table 2.4
Estimated National Camel Milk Production in Kenya, 2007
District
Number
of camels
Breed
% herd
milking
Milk yield
Total annual
Farm
Gross value
per camel
milk yield
gate
Ksh
pa
(litres)
price
(litres)
(Ksh)
Wajir
335,000 S
25
1460
122,275,000
25
3,056,875,000
Mandera
183,000 S
25
1460
66,795,000
25
1,669,875,000
Garissa
101,000 S
25
1460
36,865,000
25
921,625,000
Turkana
172,400 T
20
1200
41,031,200
15
615,468,000
Tana River
58,000 S
25
1460
21,170,000
25
529,250,000
Isiolo
40,460 S
25
1550
15,678,250
25
391,956,250
Marsabit
84,300 G+R
22
1280
23,738,880
25
593,472,200
Moyale
22,000 G
22
1280
6,195,200
25
154,880,000
East Pokot
7,700 Mixed
25
1400
2,635,325
18
47,435,850
Samburu
3,800 S
25
1400
1,330,000
20
26,600,000
Laikipia
2,300 S
25
1800
1,035,000
30
31,050,000
Kajiado
2,300 S
25
1550
891,250
25
22,281,250
West Pokot
1,000 Mixed
25
1400
350,000
18
6,300,000
Baringo
204 Mixed
25
1400
71,400
18
1,285,200
Narok
94 S
25
1550
36,425
20
728,500
Total
1,008,460
1,342
340,097,930
24
8,069,082,250
Notes: S= Somali; G=Gabbra; R= Rendille;T= Turkana breeds
Source: Various sources for background data; Estimates by RMC/SNV Camel Milk value Chain study,
Sept/Oct, 2008
Estimations of milk production have been made before. The current one is higher than the
earlier ones largely because it is based on current estimates of camel population but also
possibly because it considers each district separately. Overall, the estimated total annual
production of more than 300 million liters shows that camel milk cannot be ignored by
planners. Even with conservative farm-gate prices provided in Table 2.4, this volume of
production yields a staggering national production value of Ksh 8 billion. Compared to other
sub-sectors in Kenya such as Pyrethrum (Ksh 98.6 million); Cotton; Coffee (Ksh 9.1 billion);
and Maize (Ksh 7.9 billion – marketed) which receive significant attention, it is clear that the
Camel (and particularly the camel milk sub-sector) deserves serious attention as well. The
sub-sector is not just huge from a value of production perspective only but, perhaps most
critical, from a food security and sustainable income source for one of the most marginalized
communities in Kenya – the pastoralists – who operate in the harshest environments of the
country. As will be discussed in subsequent sections of this report, this study shows that the
significant size of the sub-sector demands attention not only from the government and other
social investors from its development impact potential, but also from the private sector as it
presents significant scope for profitable business opportunities.
Milk production in Isiolo District
Table 2.5 and Map 3 show that Isiolo can be said to have four main camel milk production
clusters. These include the Mlango-Ngarentare-Burat cluster in Central Division; the
Kulamawe cluster in Kinna Division and two minor clusters of Modogashe-Eldera in Sericho
and Boji-Galfarsa-Malkadaka cluster in Garbatulla. Only two of these clusters, the Central
Division and Kulamawe clusters are significantly developed and operating at meaningful
levels of commercialization. As will be discussed in Section 3, distance from the milk
bulking and cooling hub of Isiolo town is the main factor for the poor development of the
more distant Garbatulla and Sericho clusters. Only milk from Central and Kulamawe clusters
currently reaches Isiolo for onward transmission to the national urban market. Milk from
Garbatulla is generally consumed within the District’s urban and commercial centres while
that produced in Sericho is marketed within the district and into neighbouring Meru North
District (Maua town). Estimates show that more that three quarters of milk reaching Isiolo
town comes from the Central Division cluster.
Table 2.5
Camel milk production clusters in Isiolo District, 2008
Division
1. Central
Area of production
1. Mlango
2. Lombolio
3. Lagilaba
4. Ngare ntare
5. Burat II
6. Burat I
7. Maili Saba
8. Kiwanjani
9. Biliqo
10. Maili nane
11. Chumbi
12. Dabaa
2. Kina Division
Kulamawe area :
1. Yak Barsam
2. Baranibate
3. Daka Dima
4. Moliti
3. Garbatualla
1. Boji
2. Galfasa
3. Malkadaka
4. Merti
1. Biliqu
5. Sericho
1. Modogashe
2. Eldera
Source : RMC/SNV Camel Milk value Chain study, Sept/Oct, 2008
Level of
production
High
High
High
High
High
High
Medium
Medium
High
Low
Low
Low
Medium
Medium
Medium
Medium
Low
Low
Low
Medium
Low
Low
23
Map 3: Camel Milk Production Clusters in Isiolo District, 2007
2.4 The Demand for Camel Milk
The demand for camel milk in Kenya may be categorized into four largely distinct market
segments: home consumption by camel-owning households and camel herders; rural
households in camel keeping communities (largely restaurants and households with dry
camel herds or no camels at all); raw milk urban consumers largely from camel keeping
communities; and a high-end health market segment of consumers both in the national and
international market.
2.4.1 Consumption by camel keeping households and herders
This segment does not strictly fit the description of ‘market segment’ and comprises of
camel-owning households and camel herders who, at times, survive on camel milk only.
Estimates show that average pastoralist households with camels require up to about 7 litres
per day for their own needs as a major part of their diet and, indeed, staple food in some
communities. Using this rough figure against the total estimated number of 50,000 camel
keeping households in Kenya suggests a national annual ‘demand’ for milk by this segment
of 128 million litres or an equivalent of 38% of current national production. This closely
corroborates rough estimates of 30 – 40% given by key informants in Isiolo District regarding
the proportion of milk consumed by camel keeping households in areas where there is a ready
market for the milk. In production clusters and zones where there is no ready market, up to
100% of the milk extracted is merely consumed by herders and camel keeping households
staying in manageable distances from the herding grounds. Under these cases, however, only
required milk is extracted and, instead of milk getting extracted and left to get spoiled,
‘wastage’ is more from the perspective of the lost opportunity of extracting the full milk
potential of the lactating camel herd.
Considerations of the demand for milk by this ‘market’ segment are important, first from a
household food security perspective; and second, as a result of the inherent calf healthhousehold need-market tradeoffs in rapidly commercializing camel milk clusters. From a
food security perspective, it is important that pastoralist households access the milk they
require for their consumption needs. It is not enough for the households to have sufficient
herd sizes of good milk yielding capacity, the milk they require needs to be extracted and
transported to the households in acceptable quality. Although there are no market transactions
that take place in this segment, it should be considered as the first constituency whose
‘demand’ needs to be met and therefore should not be overlooked while designing “market
oriented” interventions. The second important consideration is a phenomenon increasingly
termed by camel owners as “five-litre camel disease” – “Ugonjwa ya five litre”. This
phenomenon refers to the over-extraction of camel milk for the market without due
consideration for the calf and its mothers’ health as well as the needs of the household.
During times of drought which also coincide with famine, some camel owners are known to
put more emphasis in over extracting milk from their camels and selling most of it leaving
insufficient amounts for the calf and for home consumption, particularly by their young
children. Unless this ‘market’ segment is sufficiently taken into account and planned for,
efforts geared at value chain development of the camel milk sub-sector could be
counterproductive to the very basic development goals of food security and increased
livelihood they are geared at achieving.
2.4.2 Rural households and restaurants in camel keeping districts
Discussions with key stakeholders in the camel milk value chain in Isiolo district indicate that
a small but significant proportion of total milk produced is sold to rural households either
25
directly to those with milk-deficits or to restaurants in local urban/shopping centres for
making tea or for direct consumption by their customers as a beverage (usually in fermented
form). Well-versed informants estimate a 50:50 proportion of the quantity of milk going to
local restaurants and households in this market segment.
Estimates of the proportion of milk currently consumed in the rural households and
restaurants market segment are highly varied. For milk production clusters in Isiolo which
have good access to the markets reached through the Isiolo town milk bulking hub, the rural
household and restaurants segment is estimated to take up to 25% of marketed milk. There
are, however, many camel-milk producing clusters in Isiolo and other parts of the country
which have no access to other markets and this segment constitutes the only market outlet for
camel milk. The proportion of milk to this market segment also varies during wet periods
when there is milk from other sources (especially cow milk among non-camel keeping
communities) to dry months when camel milk is the only milk available. Taking all these
variations into account and putting this within the perspective of total milk production,
overall estimates suggest that this market segment is taking about 10% of total camel milk
produced in the country. This works out to an annual estimate of about 34 million litres for
this segment which, observers in the camel milk industry feel is adequately meeting demand.
Prospects for growth in demand within this market segment are positive but limited. Positive
because there is an increasing acceptability of camel milk among non-traditional camel
keeping communities which, in a number of pastoralist districts such as Isiolo, are significant;
and also as a result of the frequent extended dry periods during which cow milk is largely
unavailable. Growth in this segment is closely tied to growth in rural populations and
household incomes and is therefore expected to remain modest in the short and medium term.
2.4.3 Urban raw milk market largely among the Somali community
This market segment comprises of consumers from camel keeping communities, mainly the
Somali, now living in various urban areas in Kenya and, indeed, other parts of the World.
Information from knowledgeable informants in the camel milk sector credit this market
segment for the emergence of a commercial camel milk industry in Kenya. While this market
segment is to be found in all major urban areas in Kenya which have a significant Somali
population, the bulk of the market is in Nairobi’s Eastleigh estate which has in recent years
become a bubbling business hub for medium and low income people. Available information
suggests that the emergence of a commercial camel milk industry in Kenya is largely
associated with the 1991 fall of the Central Government in Somalia and the subsequent armed
conflicts in the country that displaced large numbers of Somali Somalis into Kenya (and other
parts of the world). A significant number of these ended up in Nairobi’s Eastleigh estate (now
predominantly a Somali community area). As traditional consumers of camel milk (indeed
much more so than Kenyan Urbanized Somalis) and without their camel herds in the country,
it is argued that it is this influx of camel milk consumers that created a significant thrust in
the demand for camel milk in Nairobi which triggered commercialization of the industry.
From this perspective it could be argued that the commercial camel milk industry in Kenya is
relatively young dating no more than 18 or so years ago.
From an analysis of the value chain of camel milk originating from Isiolo District and its
Environs, available information suggests that this market segment is currently receiving no
more than 15,000 litres per day (at the national level). During the time of the study, only
4,000 litres were reaching the Eastleigh market. Out of this volume, 3,600 litres were coming
26
from Isiolo, 300 litres from Garissa4, and about 50 - 100 litres from Namanga in Kajiado
District. This volume generally doubles during the rainy season. It is largely milk through
Eastleigh that is forwarded onward to other large urban areas in Kenya, including Nakuru,
Mombasa, Kisumu and as far as Kampala, Uganda. Some milk is also sent to Kakuma
refugee camp (currently 60 litres per week) and some even exported once in a while to
Turkey and other parts of the World through customers who buy the milk when travelling to
these countries. There are indications that a significant portion of milk from Garissa is sold in
Dadaab refugee camp. Overall, triangulation of primary and secondary information gathered
during the study suggests that the annual consumption of milk in this segment is currently
about 5.5 million litres annually (up to 15,000 litres daily).
Discussions with traders in Eastleigh market indicated that current milk supply in the market
is all quickly bought within 3 – 5 hours after landing. Their perceptions are that the market
can easily take 4 to 5 times of the current supply, even without any significant promotional or
other marketing initiatives. This suggests that current supply is only meeting about 20 – 25%
of current demand in this market.
Camel milk in this market segment is generally consumed in raw form, either fresh or
naturally fermented. Information gathered during the study shows that the largest demand is
for fresh milk largely for making tea by households or in restaurants, or for consumption in
fresh form by their young children. This accounts for about 80% of camel milk consumed in
this segment while the balance is consumed in fermented form. Discussions with consumers
indicate that their demand for camel milk is largely driven by perceived superior quality
compared to cow milk (in terms of flavour and need for little milk:water ratio when making
tea) as well as the acclaimed medicinal value. As a substitute to cow milk particularly in
making tea, demand in this market is significantly sensitive to prices. Four mini-markets in
Eastleigh which were stocking pasteurized high quality milk from VCML have recently
stopped stocking the commodity due to the high price of Ksh 120 charged for ½ litre
compared to the price of Ksh 40 for an equivalent quantity of raw milk supplied by informal
traders in the Eastleigh market.
While on the whole, milk quality particularly with regard to hygiene and food safety is
important to some consumers in this market segment, it is not a major concern to the majority
as many have a traditional belief that camel milk has essential medicinal properties that make
it unlikely to be harmful to human health even when precautionary hygienic measures such as
boiling and proper handling have not been maintained. Under current supply arrangements
where hygiene and food safety standards are not key considerations, the growth in demand in
this segment seems bound within traditional camel milk consumers. Many non-traditional
camel milk consumers are generally put-off by the unhygienic handling and are unlikely to
enter into this market segment. The growth potential, while good to the extent that there
already exists a large unmet demand, is therefore still fairly limited at the national level. Milk
quality is therefore a key element if milk predominantly supplied to this market segment is to
be expected to go beyond the traditional milk consumers to other segments of the population.
2.4.4 High-end health market in Kenya and the international market
As discussed in Section 2.1, camel milk is internationally increasingly recognized as a natural
health product in treating a number of ailments (see Text Box 1)5. While there is still
4
Actually Bangale town in Tana River District 50 km from Garrissa town along the Mwingi Garissa road
There are a number of publications which have reported scientific authentication of the health properties of
camel milk. These include, Agrawal, A.P et al (2005); Wernery, U (2003)
5
27
ongoing debate on the extent to which these claims have scientific backing, the high-end
natural (organic) health products market segment has already caught on both locally, but even
more so, internationally. The Food and Agriculture Organization (FAO) estimates this
market to be internationally valued at over US$ 10 billion a year comprising over 200 million
consumers in the Midle East, Europe and the Americas6. This market segment is highly
sensitive to quality and adherence to international standards governing food safety in general
as well as those for the organic food market. In this market segment, demand for camel milk
is not generally from a food perspective (in competition with cow milk) but rather as a health
product and therefore price sensitivity is not as high as in the food market. The market
(particularly the international market) is generally able to take the product at significantly
high prices provided guarantees are made on the medicinal value and safety standards.
In Kenya, this segment of the market is currently supplied by the only camel milk processing
plant in the country - the Vital Camel Milk Limited (VCML) based in Nanyuki. Although the
installed capacity of the plant is 3,600 litres per day (on three shifts), it is currently producing
and supplying 2,000 litres per week to the market. Discussions with management of the
company however revealed that it used to supply higher quantities in the past. The current
level of supply suggests that annual supply to this market segment stands at only 104,000
litres. This represents a minute 0.3% of the current national production and only about 5% of
total marketed camel milk from Isiolo District and its environs.
Growth in this market is however enormous. Authoritative estimates put the potential
national demand for this market segment anywhere between 50,000 and 150,000 litres per
day – approximately an annual demand of 18 – 55 million litres or 5 – 16% of national
production. This market segment is however poorly developed and there is a significant mix
between customers seeking camel milk for its health qualities with those valuing the milk
from a food perspective (and substitute to cow milk). This market segment is therefore still
significantly price sensitive and requires continued efforts for it to be developed to levels
where it can be relied upon to take meaningful quantities of camel milk in relation to national
production.
At the international level, while there are no reliable estimates of demand under this market
segment, rough guesstimates put the annual demand at over 300 million litres (FAO).
Although this represents potential demand (which is not necessarily current demand), VCML
has made significant efforts to penetrate this market and attests that current market demand
far exceeds current supply and, by and large, the market can take as much camel milk as can
be supplied provided it meets required quality standards and regulatory hurdles in some
markets (such as the EU) are cleared. VCML has supplied milk to this market segment in
South Africa, the USA (California) and even as far as Chile in Southern America. The current
issue is therefore not whether there is sufficient demand, but rather, whether the supply can
guarantee required quality standards, volumes and consistency.
On the whole, this is the market segment that holds the highest potential for driving growth of
the camel milk industry in Kenya (and globally) and sufficient efforts must be put towards
addressing issues in this segment. It provides significant scope not just for absorbing
significant levels of current potential production but also presents camel milk as a high value
commodity whose returns should be sufficient to justify investment of the enormous
resources (and efforts) required to overcome current supply constraints to meet volume and
6
Mathews, C: The Next Thing: Camel Milk; FAO, 2006
28
quality standards demanded by the market. It is also the market segment that would push
camel production to the required good animal husbandry practices which are not only
important for addressing demand in the other (less stringent) market segments but which are
also important for meeting food security needs of the pastoral community.
2.5 Demand-supply gap in Camel Milk
Chart 4 shows the RMC study team’s estimates of the extent to which current milk supply to
the various market segments discussed in section 2.4 exhaust current production. It points at
a general situation where only 12% of current estimated production is marketed, about 38% is
consumed by households of camel owners and herders, and 50% is “wasted”. As discussed
in Section 2.4.1, “wastage” is here largely in the form of wasted opportunity of extracting the
milk from lactating camel herds due to lack of market opportunities rather than through
‘spoilage’. Yet, from scientific research showing that failure to empty the udder leads to
reduced milk productivity, suggests that current camel milk production is much lower that the
actual potential and therefore the “wasted” proportion could actually be much higher than the
rough estimates made here7.
Discussions made in section 2.4.4 show that there are significant opportunities for increasing
the current market uptake of camel milk. While immediate market opportunities are highest
in the urban raw milk market among traditional camel milk consumers, the most significant
potential is held by the high-end health market, particularly in the international market.
Efforts must be put in developing these two markets.
Chart 4: Shortfalls in current market uptake of camel milk production
C am e l M ilk P ro d u c tio n -m ark e t s h o rtfall
H igh - e n d
h e a lt h m k t
0%
O wn
c o n sum p t io n
38%
" W a st e d" m ilk
50%
U r ba n r a w
m ilk m k t
2%
R ur a l m a r k e t s
10%
Source: RMC/SNV Camel Milk VCA Study, Sept/Oct 2008
7
Current production estimates are build on average production of 2 – 2.5 litres per day compared to known
productivity of 5 – 8 litres for Somali breeds (Farah Z et al, 2004) and of 20 – 40 litres for well selected dairy
breeds (Wernery, U, 2003).
29
3
THE CAMEL MILK VALUE CHAIN
3.1 Overview
The value chain for camel milk from Isiolo District currently involves seven distinct valueadding activities which go into the production of the milk and its delivery to final consumers
in the market. These activities include input supply; production; bulking and product
assembly; cold storage; processing; transportation; and wholesale and retail trading. This
section explores the actors involved in each of these segments of the chain and their
interrelationships with other players; the value they add to the product; and the constraints
and opportunities they face. A key purpose of the section is to identify the type of
interventions required at each chain segment which, if well implemented, could spur growth
and increase competitiveness of the overall value chain. Each activity segment is discussed
separately and opens with an analysis of the actors and the process through which the chain
functions are undertaken, then moves on to provide a detailed value analysis of the subactivities of the chain segment before closing with a discussion of constraints, opportunities
and possible interventions required for the segment.
3.2 Production
Production is the foundational segment of any value chain, and largely determines the extent
to which the entire chain can grow and remain competitive. If fundamentals are not right in
this segment, efforts made in enhancing efficiency and competitiveness at other levels of the
chain are bound to bear insignificant impact on the whole chain. For most agricultural value
chains in developing countries such as Kenya where production is generally in the hands of
smallholders, this is also where most players in the chain are found and, these normally
constitute the main target group for development efforts targeted at improved livelihoods. For
this reason, this paper gives significant weight to production issues in its analysis.
3.2.1 Producers
The producers of camel milk in Isiolo District and its environs can be generally put into three
broad categories: small-scale pastoral herders; medium and large-scale pastoral herders; and
ranchers, most of them found in Laikipia District.
3.2.1.1 Small, medium and large-scale camel producers
Camels in the greater Isiolo district are kept mainly by Somalis who moved from the
neighboring North Eastern Province in search of pastures and stayed on after establishing
themselves in the district partly by force and partly by agreement with the indigenous Borana
people. Other ethnic groups such as the Samburu, the Turkana and a few Borana are also
keeping small herds of camels.
Herd sizes
The camel herd sizes are extremely variable. In Kampi Shariff on the road to Gambella, there
is a group of Ajuran Somalis that stated that most of their camels were stolen and only a few
are now left. The village of about 200 households has a total herd of about 1,000 camels
giving an average of 5 camels or 2 milking camels per family. This total herd is managed in
groups of about 20 camels and the owners herd the camels in turns. The milk produced is sold
in Isiolo market. The foregoing indicates that even the owners of the smallest herds are also
30
selling milk to the traders in Isiolo and some of it is getting to Eastleigh in Nairobi.
According to a driver of the DLPO in Isiolo, there are many such small herds (including his)
and the owners are selling milk.
It is difficult to make a good estimate of the number of small scale camel owners in Isiolo
mainly because many of the herds are combined to form economic sizes for herding
purposes. Some data were collected in Kulamawe and they showed that the average herd size
was 44 camels per group. The poorer half of the camel keeping families (76 families), with
less or equal to 40 camels, owned about 24% of the camel herd in the area. The richer half
owned 76%. This indicated that most of the camels were owned by the relatively richer
people.
In the Gambella, Shab and Lombolio triangle (the area with the largest concentration of
camels during the time of this study), the team observed small herds as small as 5 and large
ones of up to 200 camels. Information obtained through interviews indicated that there were
many combined herds. For example, a Mr. Kula had 28 camels, 8 of which belong to his
relative but he milks the lactating ones and sells the milk in Isiolo. Information gathered in
Isiolo town from milk buyers, showed that in the whole of Isiolo district, there are about 50
large camel herd owners, with herd sizes ranging from 100 to as high as 500 or on average
200 camels. This group of camel owners could be categorized as medium and large scale
producers – medium with between 100 and 200; and large ranging from 201 – 500. Using the
average herd size of 200 camels, the total number of camels owned by this group is estimated
at about 10,000 and accounts for 25% of the total camel population in Isiolo District. The
majority of producers in this group are business people involved in different types of
enterprises within the district (many in livestock trade). Most of them are found in Isiolo
town. With a 25% stake in the entire district’s camel herd, this small group of producers
constitutes an important segment of players who cannot be ignored in the camel milk value
chain in Isiolo District. Indeed, from its command on economic resources,
exposure/education, and connections; it is a group that wields significant sway in influence
within the district, not just in camel production issues but also on all matters with a bearing
on development. The fact that the majority of members are found within Isiolo town makes
the town an important concentration area (cluster) through which this group can be reached.
Innovations made by this group in camel milk production or other areas of the value chain are
likely to be felt by the rest of producers within a short time through linkages (for instance in
the case of milk transportation for farmers in Central Division) or through diffusion.
Although there are possible arguments for further categorization of owners of herd sizes of
lower than 100 camels into two (5 – 39; and 41 – 99), information gathered during the study
showed that this category of producers is highly homogenous particularly from their
production systems and ways of operation. We have therefore retained this group as one
category which we generally term as small-scale herders. From a scale perspective however,
producers with less than 40 camels could be termed as ‘micro’ producers (lactating camels
usually up to 10) while those with 41 – 99 camels could be termed “small”.
Table 3.1 shows the different categories of producers within Isiolo District and the estimated
number of camel population owned by each category. Triangulation of information gathered
from interviews with key informants in the camel sub-sector and data from secondary sources
puts the total number of camels within Isiolo at about 40,000 camels owned by about 2,050
producers. From estimates that put the number of medium and large-scale producers at
around 50, it is likely that the number of camel owners with less than 100 camels is about
31
2,000 accounting for 98% of producers. Out of this number, about three quarters (1,700
producers) are the very poor with an average of about 15 camels while the remaining quarter
(300 producers) are relatively better-off with an average of slightly over 30 camels each. All
these could however be still regarded as poor and within the direct target group of SNV and
other development agencies targeting low income households.
Table 3.1
Camel producers in Isiolo District, 2008
Producer category
Producers
Number
Per cent
Number
Small producers: <100 camels
2,000
97.6%
30,000
Micro: 1 – 39
1,700
82.9
20,000
Small: 40 – 99
300
14.6
10,000
Medium and Large: 100 - 500
50
2.4
10,000
Total
2,050
100.0%
40,000
Source: RMC/SNV Camel Milk VCA, Sept/Oct, 2008
Camels
Percent
75.0%
50.0%
25.0%
25.0%
100.0%
Average
15
12
33
200
20
3.2.1.2 Ranchers
Isiolo District has no ranches and therefore has no camel milk producers in the category of
ranchers. The only nearby ranches rearing camels are those in Laikipia District. Ranchers as a
category of producers therefore only comes in when discussing about camel milk production
from Isiolo and neighboring districts. Estimates put the number of ranches in Laikipia
District keeping camels at around 10, each with an average of 200 camels. While this is the
same average as that of medium and large scale producers in Isiolo District, ranchers greatly
differ from those large herders in Isiolo from the animal husbandry and management systems
they apply in production. Although on the whole, this category of producers is relatively
small both in terms of numbers and even the total proportion of camels kept, it is an
important group due to the role they could play in driving innovation particularly in terms of
productivity and quality standards. Just like the case of the cattle-based dairy industry, this
group could be particularly important in breeding a high milk-yielding dairy camel stock for
purchase by progressive producers in the pastoral system and other farming communities in
the country that gets interested in camel milk production.
3.2.2 Milk production process
As was discussed in Chapter 2, the annual volume of milk producible in Isiolo District is
estimated to be 15.7 million liters valued at Ksh 392 million (see Table 2.4). On a daily basis,
this works out to 42,000 litres.
As highlighted in Section 3.2.1 above, there are three broad categories of producers: the small
scale herders; medium and large-scale herders; and ranchers. The production systems adopted
by medium and large scale producers are largely similar to those of their small-scale
counterparts and we therefore combine these two categories in our discussion of the
production process below. No discussion is made on the production process within ranches as
this lay outside the scope of this study.
(a)
Production system
All camel milk producers in Isiolo District use what is technically known as extensive
production system that uses natural pastures that have not been improved by man. Camels are
known selective browsers that feed on many different plants per day and this is what confers
medicinal qualities to the milk. Such plants are interspersed in the land – usually called
rangelands. Camel producers use age-old techniques to pasture their animals, water them,
32
provide salt (sometimes in salt-licks), remove parasites such as ticks and apply ethnoveterinary medicine to remove internal parasites such as worms.
(b)
Pasturing/herding
The greater Isiolo has abundant pasture resources in different areas. Some of these pastures
however, are in areas where water is difficult to get and are thus used only during the wet
season. An example of such area is the one between Shab and Kachuro. There are other areas
especially in Sericho (part of Lorian Swamp) that have much grazing and are also near water.
The Isiolo holding ground in Central division is a major grazing resource with water but not
that well managed.
Due to poor rainfall distribution, different areas have differing grazing potentials at different
times. Due to this, pastoralists are forced to move their livestock to where they consider to
have better grazing. Such movements, however, cause conflicts over grazing as some
pastoralists want to reserve some areas for their clans.
Water is obtainable mainly in the Ewaso Nyiro river, some seasonal rivers, dams and water
pans. The district, however is fortunate to be part of the Merti aquifer where it is usually easy
to strike water using boreholes. There are a number of boreholes in the area and for these
water has to be paid for. Unfortunately for Pastoralists, paying for water is done only when
they cannot get water pan or river water. They prefer to travel far distances to water their
animals for free. This taxes the livestock costing them weight gains and reduction in milk
yields. Pastoralists dig wells in seasonal rivers and they extract the water communally as
about 4-5 persons are needed for watering livestock during the dry seasons.
On the whole, however, Isiolo is a dry district and water is generally scarce. The increase in
water facilities has to match the grazing potentials or else it will cause local desertification
due to high concentrations of livestock. Water for camels is not a big issue since they can
water every 7days during the dry season and during the wet season they get all their water
requirements from the green plants they feed on. Water is also available in many pools during
the wet season.
Each livestock keeper or owner makes it their business to know areas where most rain was
received, the growth of the pastures, water availability and even security status for both
livestock and herders. On the basis of the above knowledge, he/she decides where to take the
camels for pasturing. Usually many herders take their camels to the same areas but space
them for better pasture utilization.
Herds are usually split into the settlement-based herds and the migratory herd components – a
fraction usually influenced by the total herd size and milk requirements of the nuclear
families. The settlement-based herds are pastured near the manyattas while the migratory
herds move long distances and spend nights usually far away from the settlements (in mobile
camps called Foras).
Herding of the settlement-based herds is done by boys or girls depending on labour
availability. The herding of the migratory herds, on the other hand, is done by strong young
men who can also water the animals. In Isiolo, the herding of the migratory herds is done by
family members who herd either in turns or charge the ones that are not herding. Such
herders double as milkers. Stock associations are common as they are needed while watering
and herding the smaller herds.
33
(c)
Husbandry practices
Camel milk producers use traditional practices in watering, provision of salts (sometimes in
salt-licks), removal of parasites such as ticks and applying ethno-veterinary medicine to
remove internal parasites such as worms. Occasionally, they purchase de-wormers (usually
the cheap types) and when they notice their camels have trypanosomiasis, they buy
trypanocides and inject it themselves. Their major inputs are salts (minerals), de-wormers,
trypanocides and some antibiotics such as Adamycin. Generally, the small scale camel milk
producers do not use the state veterinary services as the former not only feel they know more
but in some cases the vets in the district have little knowledge of camel diseases.
(d)
Milking
Milk is extracted by hand from lactating camels. Lactating camels only let their milk down to
their calves and thus the calves are used for stimulating milk let down. After the stimulation,
the milk is squeezed out by a milker as quickly as possible. Camels are milked while milker
is standing (not bending or seated as in cattle). They are milked usually twice a day. Small
scale camel milk producers do not wash the camel udders before milking and this is why the
milk is usually contaminated with dirt, the camel’s urine and other debris.
The milk extracted per camel under the small scale camel milk production system is about 3
liters per day, a bit higher than that extracted by the larger scale producers. This is so because
the former needs the milk more and they also need the cash from the milk sales more.
(e)
Use of the milk
(i)
Calves
Camel milk production is usually intended for the calf. However, it is milked and used
by humans. The proportion used by the calf is not easy to determine, but since the
calves live on it for most of the time and do grow on it, it is highly likely that the
calves drink at least as much as the milk extracted by herders depending on the human
competition for the milk (about 2 - 3 litres per day). There is a general practice among
pastoralists of leaving two teats for the calf while milk is extracted from the other two
(which are normally tied during the day to prevent the calf from suckling). This
suggests as 50:50 sharing. The proportion of milk going to the calf is however, not
included in the calculations of milk production since, unlike cattle, camel calves are
not handfed with milk.
(ii)
Household use
Pastoral households use more milk per capita than non-pastoral ones (Njiru, 1985).
This is so because, when milk is plentiful, families stop buying expensive grains and
subsist on milk. In Isiolo, data obtained from camel owners indicated about 7 litres are
used by households out of the 17 litres milked. This gives a large percentage (41%).
This data was obtained during the height of the dry season and may not be
representative for the whole year. There are reports in literature indicating the reverse
as when the milk production is low, the prices go up and the pastoralists sell as much
as they have and use the proceeds to buy grains that have also gone up during the dry
seasons.
(iii)
Marketed milk
Data obtained from Isiolo camel milk producers showed that they sold about 12.5
litres out of the 18.75 they milked. This gave 67% of the extracted milk.
34
(iv)
Herders
Under ordinary camel milk production, herders are catered for in the milk for
household use. If the herds are far from home, the herders milk a little from each
camel after selling the bulk of the milk. Thus usually there is no separate provision for
herders.
(e)
Production costs
Table 3.2 presents information provided by four producers with different sizes of camel herds
regarding their production costs and revenues. This information provides the basis on which
key assumptions and costs structures for value and gross margin analysis can be made. A key
point illustrated in the Table is that for the four producers, average herding costs per camel
stand at Ksh 8.40 per day. The main cost element in this is the cost of herders which account
for 82% of herding costs per camel.
Table 3.2
Revenue and cost estimates in camel production at the farm level
Case 1
Case 2
Case 3
Case 4
Total
Avg/cam
el/ day
Herd size
28
40
70
200
338
No lactating/milking
7
14
15
80
116
Total milk extracted (litres/day)
20
30
20
100
170
1.50
Home use (litres/day)
5
10
0
10
25
0.20
Market supply (litres/day)
15
20
20
90
145
1.25
Farm-gate selling price (Ksh)
30
20
35
30
29.30
29.30
Daily revenue (Ksh)
450
400
700
2700
4,250
36.60
Monthly revenue (Ksh)
13,500
12,000
21,000
81,000
127,500
1,099
Costs
Herding: Salaries (Ksh/month)
4000
3000
15,000
30,000
52,000
5.10
Miraa for herders (Ksh/mth)
2800
2,800
0.30
Food for herder (Ksh/mth)
2000
7000
6000
15,000
1.50
Sub total – herders
8,800
10,000
15,000
36,000
69,800
6.90
Watering (Ksh/month)
500
1000
1500
0.15
Supplementary feeds (Ksh/mth)
Healthcare inputs (Ksh)
Salts
400
150
1000
3000
4,550
0.45
De-wormers and Vet drugs
1,000
1400
2400
2500
7,300
0.70
Acaricides
650
600
600
1,850
0.20
Milking costs8
Total direct costs (Ksh/month)
10,850
12,050
20,000
42,100
85,000
8.40
Other costs
Management time (imputed)*
1,875
1,875
1,875
1,875
7,500
0.70
Milk transportation costs
450
13,500
3,000
16,950
4.90
Total Variable Costs
13,175
13,925
35,375
46,975
109,450
943.50
Net income (unadjusted)
325
(1,925)
(14,375)
34,025
18,050
116.60
*
Management time of 1 hour per day (at a rate of Ksh 500/day) is assumed to be required per herd
Source: RMC/SNV Camel Milk VCA, Sept/Oct, 2008
3.2.3 The Camel Milk Production value chain
The value chain for camel milk production at the farmer level can be divided into four main
distinct value adding activities:
8
Milking is an important activity in camel production and includes the actual milking and delivery to homestead
(manyatta) or collection point. This activity is however performed by herders and is not costed separately.
Rough estimates however suggest it accounts for up to 20% of herders’ time when milking is done twice a day.
35
Acquisition of milking camel heifers either through raising of young female calves or
through purchase of mature camel heifers;
• Herding;
• Health care; and
• Milking
Transportation of milk to the market, although not strictly a production cost, could also be
included here since most camel producers in Isiolo are the ones responsible for delivering
milk to traders – straight to Isiolo town for farmers in Central Division, and to collection
points for farmers operating longer distances from Isiolo town such as those in Kulamawe
area. There is also an overall need for management inputs of the camel owners in
coordinating all the activities related to production including efforts in identifying areas with
pastures, water and no security threats; provision of required husbandry inputs and
coordination with market agents for collection of extracted milk and payment of proceeds
besides the overall supervision of the herders.
•
Table 3.3 uses the general cost structures developed in Table 3.2 for the total camel herd to
estimate the specific costs related to camel milk production. It shows three scenarios: for
farmers who get their milking camels by raising their own heifers from female calves, mating
them at 4 years and managing a 2 year calving interval for 8 calves in the life of the camel.
Scenario 2 is also for farmers who raise own heifers but mate them at age 5 and manage
calving intervals of 3 years for a total of 5 calves over the life of the camel. Scenario 3 is for
farmers who obtain already bred (mature) heifers and manage them at two year calving
intervals for 8 calves in total.
Under the three scenarios, farm-gate milk production cost per lactating camel per day is Ksh
22.65; Ksh 31.00; and Ksh 27.05 for the three scenarios, respectively. Information for
scenario 1 is summarized in Figure 1 showing the milk production chain map.
Figure 1: Camel Milk Production Value Chain at the farmer level
No specialized
breeding farms
for dairy camel
Herder
Salaries
74%
Acquisition of milking
heifer –raising or
purchase
19%
Although salaries are generally low,
ranging from as low as Ksh 1,500 –
3,000 per month, labour turns out to
be the largest component in raising,
herding and milking of camels
Source: RMC/SNV Camel Milk VCA, Oct 2008
Watering
2%
Herder
Food&
provisions
26%
Herding
63%
Lack of labour
constrains full
milk extraction
Health
care
Milking
12%
Vet. Drugs
52%
Management
0%
Salt lick
33%
6%
Sprays
15%
Advice
0%
Although important, extension
services in camel husbandry are
hardly used - largely due to
unavailability & quality
36
Table 3.3
Camel milk production analysis
Scenario 1
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
2.1
2.2
2.3
2.4
3.
3.1
3.2
3.3
3.3.1
3.3.2
3.4
3.4.1
3.4.2
3.5
3.5.1
3.5.2
4.
4.1
4.2
4.3
4.4
4.5
4.6
5.
5.1
5.2
6.
7.
8.
9.
10.
11.
12
13.
14.
Basic assumptions
Maturity age of female camels (yrs)
Number of calves in lifetime
Lactating period (months)
Calving intervals (years)
Economic life of female camels (yrs)
Number of lactating months in camel lifetime
Number of lactating days in a camel lifetime
Estimated cost of keeping a camel per day (Ksh)
Cost of raising a camel heifer
Number of days required (maturing age x 365)
Cost of raising heifer to maturity (days x cost per day) Ksh
Purchase price of in-calf camel heifer (Ksh)
Required cost recovery per lactation day
Herding costs
Number years camel herded after starting producing
Number of days camel herded (inc. lactating & dry months)
Herders Salaries
Salaries paid over herding period (herding days @ 5.10/)
Salary cost recovery over lactating days (Ksh/day)
Herder food & provisions
Herder food and other provisions over herding period
Herder food & provisions cost recover per lactation day
Watering costs
Watering costs over herding life of camel
Cost recovery of water costs per lactating day
Health care costs
De-wormers and other veterinary drugs costs (@Ksh 0.70)
Cost recovery per day for de-wormers & vet drugs
Salts costs over herding days (@Ksh 0.45)
Salts cost recovery per day of camel lactation
Acaricide costs over herding life of camel (@ Ksh 0.20)
Cost recovery on Acaricides from milk/day
Cost of management
Management cost over herding life (@ Ksh 0.70)
Management cost recovery from milk/day
Total farm-gate production cost/day per camel
Transport cost per day (see Table 3.2)
Total cost including delivery to the market
Average milk production per day per camel
Price per litre
Total revenue from milk per day
Gross margin per camel per day
Gross margin per litre of milk produced
Average monthly net income: (avg of 29 lactating camels)
Scenario 2
Scenario 3
4
8
12
2
20
96
2,880
8.40
5
5
14
3
20
70
2,100
8.40
8
12
2
20
96
2,880
8.40
1,460
12,264
1,825
15,330
4.30
14.25
16
5,840
7.30
18.40
15
5,475
25,000
8.70
14.25
16
5,840
29,784
10.30
27,923
13.30
29,784
10.30
10,512
3.65
9,855
4.70
10,512
3.65
876
0.30
2.70
4,088
1.40
2,628
0.90
1,168
0.40
821
0.40
3.50
3,833
1.80
2,464
1.20
1,095
0.50
876
0.30
2.70
4,088
1.40
2,628
0.90
1,168
0.40
4,088
1.40
22.65
3.40
26.05
1.50
29.30
43.95
17.90
11.90
15,573
3,833
1.80
31.00
3.40
33.40
1.50
29.30
43.95
10.55
7.00
9,179
4,088
1.40
27.05
3.40
30.45
1.50
29.30
43.95
13.50
9.00
11,745
Source: RMC/SNV Camel milk VCA, Sept/Oct 2008
The analysis shows that herding accounts for 63% of milk production costs, the bulk of which
go to salaries and provisions (food and miraa) for herders. The other significant cost, which
is many times overlooked by producers, is imputed capital cost recovery for the dairy camel.
From a business perspective, the dairy camel must pay for itself through milk production and
37
sales – not just for the period it is in lactating, but also for the period it is dry as well as the
costs incurrent in raising it to maturity (or its purchase if it was bought). The capital
investment costs account for 19% of milk production costs.
3.2.4 Breakeven analysis: are camel producers making money?
Tables 3.4 (a) through (d) address the basic question of whether camel producers are
currently making money through milk production. The first Table (a) uses the scenario
provided by the four key informants presented in Table 3.2 showing an average milk
production level of 1.5 litres per day for a herd structure comprising 25% lactating camels at
any one time. It shows that at a milk productivity level of 1.5 litres per day, camel producers
do not make money regardless of the herd size. At this level of productivity, milk yield is so
low that it cannot absorb both the fixed and variable costs of production. Small herders are
the hardest hit, with those with only up to 20 camels recovering less than half of their costs.
While this scenario may present an extreme case given that the study was conducted during a
dry period, our assessment is that the situation on the ground is not far from this and, for
many producers, milk production is currently a loss making venture if all costs are properly
taken into account. Like the scenario of most other smallholder activities in the country,
camel keeping is more of a “way of life” rather than a viable business venture under current
management practices and cost structures.
Table 3.4 (a)
Break-even analysis for camel milk production: Scenario 1 – Current Situation
Item/variable
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
2.1
2.2
2.3
2.4
2.5
2.6
2.6
3.
3.1
3.2
3.3
4.
5.
Herd size 1
10 camels
Herd size 2
20 camels
Assumptions
Min. herders required
2
2
Max. herd capable of handling
40
40
Monthly cost per herder (Ksh)
3,674
3,674
Proportion of milking camels
25%
25%
Number of camels in lactation
3
5
Avg. milk yield per camel/day lt
1.5
1.5
Proportion of milk sold
80%
80%
Price per litre of milk – bulk’g pt
30
30
Monthly Costs
Herder salaries & provisions
7,348
7,348
Cost of watering milking herd
27
45
Healthcare (drugs etc)
243
405
Management costs
1,875
1,875
Milk transportation costs
306
510
Capital investment cost
387
645
Total monthly costs
10,185
10,827
Monthly revenue
Total milk produced/ month (lt)
135
225
Total milk sold per month (lt)
108
180
Total revenue per month (Ksh)
3,240
5,400
Net income
(6,945)
(5,427)
Viability (Revenue/Costs)%
31.8%
49.9%
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
Herd size 3
30 camels
Herd size 4
40 camels
Herd size 5
60 camels
Herd size 6
80 camels
2
40
3,674
25%
8
1.5
80%
30
2
40
3,674
25%
10
1.5
80%
30
3
60
3,674
25%
15
1.5
80%
30
4
80
3,674
25%
20
1.5
80%
30
7,348
72
648
1,875
816
1,032
11,791
7,348
90
810
1,875
1,020
1,290
12,433
11,022
135
1,215
1,875
1,530
1,935
17,712
14,696
180
1,620
1,875
2,040
2,580
22,991
360
288
8,640
(3,151)
73.3%
450
360
10,800
(1,633)
86.9%
675
540
16,200
(1,512)
91.5%
900
720
21,600
(1,391)
93.9%
There are many ways through which producers can move to profitability. Scenarios (b)
and (c) pick one two of these – herd structure, and milk productivity. By increasing the
proportion of lactating camels from 25% to 35%, a producer is able to move to
38
profitability. Per current cost structures, however, a farmer requires up to 10 lactating
camels (in a herd of 35-40) to break even.
Table 3.4 (b)
Break-even analysis for camel milk production: Scenario 2: Herd composition: 35% lactating
Herd size 1 Herd size 2 Herd size 3 Herd size 4 Herd size 5 Herd size 6
Item/variable
10 camels
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
2.1
2.2
2.3
2.4
2.5
2.6
2.6
3.
3.1
3.2
3.3
4.
5.
20 camels
Assumptions
Min. herders required
2
2
Max. herd capable of handling
40
40
Monthly cost per herder (Ksh)
3,674
3,674
Proportion of milking camels
35%
35%
Number of camels in lactation
4
7
Avg. milk yield per camel/day lt
1.5
1.5
Proportion of milk sold
80%
80%
Price per litre of milk – bulk’g pt
30
30
Monthly Costs
Herder salaries & provisions
7,348
7,348
Cost of watering milking herd
36
63
Healthcare (drugs etc)
324
567
Management costs
1,875
1,875
Milk transportation costs
408
714
Capital investment cost (Table 3.2)
516
903
Total monthly costs
10,507
11,470
Monthly revenue
Total milk produced/ month (lt)
180
315
Total milk sold per month (lt)
144
252
Total revenue per month (Ksh)
4,320
7,560
Net income
(6,187)
(3,910)
Viability (Revenue/Costs)%
41.1%
65.9%
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
30 camels
40 camels
60 camels
80 camels
2
40
3,674
35%
11
1.5
80%
30
2
40
3,674
35%
14
1.5
80%
30
3
60
3,674
35%
21
1.5
80%
30
4
80
3,674
35%
28
1.5
80%
30
7,348
99
891
1,875
1,122
1,419
12,754
7,348
126
1,134
1,875
1,428
1,806
13,717
11,022
189
1,701
1,875
2,142
2,709
19,638
14,696
252
2,268
1,875
2,856
3,612
25,559
495
396
11,070
(1,684)
86.8%
630
504
15,120
1,403
110.2%
945
756
22,680
3,042
115.5%
1,260
1,008
30,240
4,681
118.3%
The situation however significantly changes with improved milk productivity (scenario 3).
This scenario shows that, as is the case in most production systems, increased productivity
has the highest pay-offs in moving producers towards profitability. At daily productivity of
2.5 litres per camel, a farmer is able to break-even with only 6-7 lactating camels in a herd of
25-30. This productivity level is however still low for generally poor farmers with smaller
herds to make money and productivity must, therefore, go beyond this level for producers to
be in business.
The last scenario shows the effects of simultaneously changing the herd structure to increase
the number lactating camels at any one time while at the same time introducing measures that
lead to increased milk yield per camel. Increased milk yield to an average of 2.5 litres per day
and herd structure of 35% lactating camels per herd makes smallholder farmers with only 20
camels to operate profitably, with the break-even hard size standing at around 18 camels.
Further analysis of further variations shows that, even without structural changes in the
management systems under which pastoralist camel milk producers operate, some conscious
changes from a business perspective can turn camel herding for milk purposes a profitable
business through which improved livelihoods for pastoralists and their households can be
achieved.
Table 3.4 (c)
39
Break-even analysis for camel milk production: Scenario 3 – Milk yield of 2.5 litres/day
Herd size 1 Herd size 2 Herd size 3 Herd size 4 Herd size 5
Item/variable
10 camels
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
2.1
2.2
2.3
2.4
2.5
2.6
2.6
3.
3.1
3.2
3.3
4.
5.
20 camels
Assumptions
Min. herders required
2
2
Max. herd capable of handling
40
40
Monthly cost per herder (Ksh)
3,674
3,674
Proportion of milking camels
25%
25%
Number of camels in lactation
3
5
Avg. milk yield per camel/day lt
2.5
2.5
Proportion of milk sold
80%
80%
Price per litre of milk – bulk’g pt
30
30
Monthly Costs
Herder salaries & provisions
7,348
7,348
Cost of watering milking herd
27
45
Healthcare (drugs etc)
243
405
Management costs
1,875
1,875
Milk transportation costs
306
510
Capital investment cost
387
645
Total monthly costs
10,185
10,827
Monthly revenue
Total milk produced/ month (lt)
225
375
Total milk sold per month (lt)
180
300
Total revenue per month (Ksh)
5,400
9,000
Net income
(4,785)
(1,827)
Viability (Revenue/Costs)%
53.0%
49.9%
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
30 camels
40 camels
60 camels
Herd size 6
80 camels
2
40
3,674
25%
8
2.5
80%
30
2
40
3,674
25%
10
2.5
80%
30
3
60
3,674
25%
15
2.5
80%
30
4
80
3,674
25%
20
2.5
80%
30
7,348
72
648
1,875
816
1,032
11,791
7,348
90
810
1,875
1,020
1,290
12,433
11,022
135
1,215
1,875
1,530
1,935
17,712
14,696
180
1,620
1,875
2,040
2,580
22,991
600
480
14,400
2,609
122.1%
750
600
18,000
5,567
144.8%
1,125
900
27,000
9,288
152.4%
1,500
1200
36,000
13,009
156.6%
Whereas from the analyses presented in the four scenarios show that it is possible to bring
down the break-even herd size by adopting better husbandry and management practices,
they also show that there is certain herd-size threshold below which farmers cannot make
money from camel production. Our analysis suggests that under current practices and
cost structures, producers must have at least 5 lactating camels for them to make money
in this business. This has to be the starting point in developing the camel milk value
chain.
Table 3.4 (d)
Break-even analysis for camel milk production: Scenario 4 – Milk yield of 2.5 lts; 35% lactating herd
Herd size 1 Herd size 2 Herd size 3 Herd size 4 Herd size 5 Herd size 6
Item/variable
10 camels
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2.
2.1
2.2
2.3
2.4
2.5
2.6
2.6
Assumptions
Min. herders required
Max. herd capable of handling
Monthly cost per herder (Ksh)
Proportion of milking camels
Number of camels in lactation
Avg. milk yield per camel/day lt
Proportion of milk sold
Price per litre of milk – bulk’g pt
Monthly Costs
Herder salaries & provisions
Cost of watering milking herd
Healthcare (drugs etc)
Management costs
Milk transportation costs
Capital investment cost
Total monthly costs
20 camels
30 camels
40 camels
60 camels
80 camels
2
40
3,674
35%
4
2.5
80%
30
2
40
3,674
35%
7
2.5
80%
30
2
40
3,674
35%
11
2.5
80%
30
2
40
3,674
35%
14
2.5
80%
30
3
60
3,674
35%
21
2.5
80%
30
4
80
3,674
35%
28
2.5
80%
30
7,348
36
324
1,875
408
516
10,507
7,348
63
567
1,875
714
903
11,470
7,348
99
891
1,875
1,122
1,419
12,754
7,348
126
1,134
1,875
1,428
1,806
13,717
11,022
189
1,701
1,875
2,142
2,709
19,638
14,696
252
2,268
1,875
2,856
3,612
25,559
40
3.
3.1
3.2
3.3
4.
5.
Monthly revenue
Total milk produced/ month (lt)
300
525
Total milk sold per month (lt)
240
420
Total revenue per month (Ksh)
7,200
12,600
Net income
(3,307)
1,130
Viability (Revenue/Costs)%
68.5%
109.9%
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
825
660
19,800
7,046
155.2%
1,050
840
25,200
11,483
183.7%
1,575
1,260
37,800
18,162
192.5%
2,100
1,680
50,400
24,841
197.2%
3.2.5 Production constraints and opportunities
Constraints in camel milk production are many. To start with there are limitations of how
much milk the camels can produce even with the best nutrition and management. This is
termed genetic potential and in the case of Isiolo, the Somali type of camel has the best
potential among the indigenous types. There are however problems of breeding management
such that inbreeding is not kept at a bay and this eventually reduces the genetic potential.
The potential is not realized because of nutrition, water, pasture, parasite, disease and mineral
supplementation problems. Most of these are well known but not as appreciated as they
should be. Pastures are not improved and in some cases are degraded and this leads to poor
nutrition.
Diseases especially Trypanosomiasis and mastitis are common and these directly negatively
affect milk production. Pastoralists have treated Trypanosomiasis for a long time but mastitis
appears a real challenge because the control and through the management of the milking
process something pastoralist are not accustomed to. Helminth control is also practiced very
poorly as it is not done strategically when the treatment can be effective. Besides, pastoralists
do not use the more effective drugs such as Ivomectin arguing it is very expensive.
Management issues have their roots in ignorance or the lack of full appreciation of the
usefulness of the various practices.
Management is also implicated in poor milking i.e. not extracting enough milk from the
camels. This has to do with the biology of milk let down and if the milkers are not fast
enough, the camels retain the milk for their calves. Labour shortage is implicated, but more
importantly, the work plan. This becomes a big issue in the large scale production system.
The greater problems are in unhygienic milking. The udders of milking camels in Isiolo are
not washed before milking. All manner of excuses are given the most common being that the
milk of camel is always clean. Calves are used for stimulating milk let down and the
pastoralists have extended the suckling to mean disinfection by the calf saliva! Milkers also
do not wash their hands. Again the most common excuse is the lack of water. The reality,
however is that clean milking is poorly appreciated and the fact that the consumers so far
have not demanded cleaner milk has given the pastoralists a license to produce and sell dirty,
if not dangerous, camel milk. This will continue to be the most significant barrier to milk
processing especially for milk destined for the high-end local and export markets.
Milk spoilage has other dimensions such as spoilage due to poor transportation. This as
shown elsewhere in this report is one of the most intractable problem as it is linked to poor
infrastructure (roads especially), the use of old vehicles, delays by women bringing milk from
far interior etc. The problem is greater during the wet season as some of the roads become
impassable.
41
Most of the above constraints would have fewer effects if pastoralists saw camel milk as a
market commodity and produced it with customers in mind. The business orientation as
shown by the type of milk marketed leaves a lot to be desired. This is an area that needs to be
properly addressed through appropriate training using farm budget approaches for the
pastoralists to see where they are losing value in the chain.
Finally, the pastoralist tends to operate individually. This of course is grounded on plausible
reasoning especially when it comes to mixing milk from different producers. Unfortunately
individual operations are vulnerable to shocks and the future is for those who unite, set
standards and police them.
Table 3.5
Summary of production constraints and possible interventions
Constraints
Possible interventions
Low genetic potential of the
• Improve breeding especially by avoiding
camels
inbreeding
Diseases especially mastitis and
Trypanosomiasis
Production of low quality milk
Poor transportation of quality
milk in plastic containers
Shortage of pastures especially
during the dry season
•
•
•
•
•
•
•
Poor transport for milk
•
•
Individualized milk marketing
•
Milk spoilage especially during
the wet season
•
Improve milking hygiene practices, separation of
sick camels and milking them last.
Treatment for the two main diseases
Training of pastoralists on clean milk production
Encourage pastoralists to use metallic containers
that can be cleaned easily.
Improvement in water distribution so that pastures
can be used.
Planting of Euphorbia for use during the dry
season.
Better management of the Isiolo holding ground
(water and pasture use)
Improve roads
Better organize producers to better organize their
transport.
Organize the milk marketers into groups and
provide various types of training
Train pastoralists on milk preservation
General recommendations
1. A proper camel census is needed. This will give more reliable data than the current
approximations. The greater Isiolo is a small district and a livestock census should not
be a difficult undertaking. This would enable better planning for targeted
interventions.
2. A gradual increase in improving the quality of milk produced and transported. Such
improvement can be started with the large or medium scale producers and other
producers roped in over a period of time.
3. Promote the use of the Isiolo Holding ground as an all season grazing area for
lactating camels.
42
3.3 Milk assembly, bulking and transportation
Discussions in Section 3.2 have shown that the herd structures and production systems
adopted by most camel keepers in Isiolo district make camel milk production from the district
an essentially small-scale activity at the individual farmer level, regardless of the herd size.
Even farmers with camel herds of up to 500 will have only up 35% lactating camels and with
the general low yield per camel, even the largest farmers will have milk production of no
more than 500 litres per day at the best of times. The majority of farmers, with an average of
20 camels are able to produce only up to 10 litres of milk per day. None of these levels of
production are large enough for farmers to operate on their own. It is therefore essential that
milk from different farmers is assembled together for economies of scale in transportation
and market access. This section discusses the milk assembly, bulking and transportation
activities involved in getting camel milk into the urban market.
3.3.1 Milk Assembly
Information obtained during the study shows that most of the camel milk reaching Isiolo
town comes from two main clusters – the Central Division cluster of Mlango-NgarentareBurat areas and the Kulamawe cluster of Yak-Barsan-Baranbate-Dakadima-Moliti areas. The
milk assembly process in the two clusters is slightly different due to distances to Isiolo town.
In clusters close to Isiolo town or for farmers with significant quantities of milk, farmers sell
their milk directly to Isiolo town traders. For clusters much further off (more than 10 km),
however, milk is assembled from different farmers by local traders (mostly women) who then
forward it to Isiolo-based traders who bulk the milk further, put it under cold storage
overnight and forward it to the Nairobi urban market. Estimates for Central Division roughly
put a 40:60 proportion of milk marketed directly by farmers to the one that goes through
intermediaries. In Kulamawe and other far off clusters, milk assembly is largely done by
local camel milk traders.
Due to the relative proximity (up to 20 km) of many milk production clusters within Central
Division, there is a varied range of transportation means for milk from farmers to Isiolo town.
Donkeys are the main means of transportation for most milk coming from within a radius of
10 kms. Most farmers have 2 – 5 donkeys which they use as beasts of burden and these are
the ones used for transporting milk from production clusters near Isiolo town. Bicycles
(mainly for hire – i.e. boda boda) are also an important means of transportation. During the
study, a lot of milk from Shab, Maili Nane and other areas in Meru where camels have
migrated for pastures was being ferried to Isiolo by bicycles for hire at a rate of Ksh 400 per
trip with a load of 100 – 150 litres of milk. A few farmers much nearer Isiolo town
sometimes just carry the milk on their backs.
In addition to donkeys and bicycles, a number of large-scale farmers in Central Division have
their own vehicles (Land Rovers and Land Cruisers) which they use to transport their milk
and that of other milk producers at a fee. Discussions with key informants indicated that
there are four (4) such vehicles used during the peak season. At the time of the study there
were two – a LandRover and a Land Cruiser each able to carry up to 1,500 litres during the
peak season. Charges are Ksh 20 for 3 litre jerrican; and Ksh 30, Ksh 60, and Ksh 120 for 5
litre, 10 litre, and 20 litre jerricans, respectively – roughly Ksh 6.00 per litre although farmers
with 3 litre jerricans end up paying more (Ksh 6.70/litre). During the dry season when the
quantity of milk is not high, these vehicles are also used for passengers and whatever other
luggage there may be along the route including charcoal, goats, sheep, anything. During the
43
wet season, these vehicles are however used exclusively for milk transportation. The owners
reckon that, with full capacity utilization, transporting milk can be a profitable business.
Due to the small quantities of milk produced per farmer per milking (evening and morning),
the most commonly used containers are 3 litre and 5 litre plastic jerricans. Evening milk is
not mixed with morning milk. For Central Division clusters, farmers sell their milk directly to
traders in Isiolo and therefore they are the ones responsible for transportation. Milk
transported by vehicles is taken by hand/back or donkey to milk collection point along the
collection route (road) by 9.00 am. This is then picked and delivered to Isiolo, usually
starting 12.00 noon to 3.00 pm, to the designated customers – local traders within Isiolo town
or traders who take their milk to Nairobi.
For clusters much further from Isiolo town such as Kulamawe (about 70 km from Isiolo
town), milk is generally handled through intermediaries and not directly by farmers. Farmers
are therefore responsible for milking and delivering their milk to designated collection points
– shopping centres such as Kulamawe, Kashuru and others, or along the road. From here,
milk is handled by local traders some of whom may sell part of the milk to rural households
and restaurants and send the remaining to Isiolo traders. Transportation to Isiolo town is by
an old lorry which is the only means of transportation along the Kulamawe-Kashuru-Isiolo
route. This Lorry makes a one way trip each day and is therefore only able to transport milk
every other day – one day to Isiolo, the other day back. To make its trip to isiolo town by
5.00 – 6.00 pm, the Lorry needs to depart Kulamawe by 11.00 am and therefore milk must be
delivered by this time from the interior where the camels are kept. Although some farmers
and traders start bringing in milk as early as 8.00 am, estimates indicate that there is a
substantial amount of milk that is not able to reach Kulamawe (and the lorry route) by the
time of departure and therefore that milk ends up wasted. The Lorry normally ferries 200 –
300 litres per day (trip) during the dry season and up to 700 litres during the wet season.
In the Kulamawe route, charges are Ksh 20, 35, and 70 for 3 litre, 5 litre and 10 litre jerricans
normally used – an average of Ksh 7 per litre. Milk arrives in Isiolo town from 5.00 – 6.00
pm. Because the lorry is the only means of transportation in this route, milk is therefore
transported along with all else that needs to be taken to Isiolo - passengers, livestock,
charcoal etc. It is also noteworthy that only milk produced each other day is able to access the
Isiolo-and-beyond market due to the current limitation of transportation means. When the
vehicle is not in operation, or even worse, when it breaks down mid-way, milk spoilage
becomes inevitable. A number of other transporters have tried the route in the past, but due to
the rough road and volume of business, they have in due course withdrawn their services due
to losses. Although the transporter reckons he is breaking even, he feels that the profits are
generally marginal due to the increased fuel costs and high maintenance costs due to the bad
road.
Table 3.6 and figure 2 show that there are positive margins in milk assembly. This
notwithstanding, current average monthly returns per product assembly agent are fairly low
largely due the low volumes they manage. Overall, this is mainly caused by the long
distances which producers must cover to reach milk collection centres; the poor state of roads
within Isiolo and the general state of high fuel costs in the country. In addition, the product
assembly activity is operating inefficiently due to the poor organization of farmers to a level
where they could take joint action in milk delivery to collection points to assure time of
collection and volumes.
44
Table 3.6
Milk assembly value chain analysis
Cost item
Central–
farmers
Central –
local
traders
Volume of milk per day (litres)
1,800
2,700
Monthly volume of milk
54,000
81,000
Imputed costs for milk to collection points
2.20
2.20
Farm-gate price/ litre (collection point)
25.00
Monthly cost of buying milk from farmers
1,350,000 2,025,000
Transport costs to Isiolo/litre
6
Total monthly transportation costs
118,800
486,000
Price of milk in Isiolo town
35
35
Gross monthly income from sale of milk
1,890,000 2,835,000
Gross margin to assembly agents/litre
7.80
4.00
Monthly Gross margin for assembly
421,200
324,000
Number of farmers/agents
100
50
Average monthly income for assembly
4,212
6,480
*
average costs for product assembly used trader channels
Source: Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
Kulamawe
200
6,000
2.20
20.00
120,000
7
42,000
35
210,000
8.00
48,000
12
4,800
Total
4,700
141,000
2.20
26.70
3,495,000
Average
cost/litre*
24.60
646,800
35
4,935,000
6.10
793,200
162
4,891
4.30
Figure 2: Milk assembly value chain: from producers to Isiolo bulking points
Fuel 60-70%
Milk assembly to
collection points
17.5%
Maintenance
20- 25%
Transportation
High fuel prices and bad
roads combine to reduce
profitability of
transportation services
unless with large volumes
Source:
48.4%
Labour/margin 5
– 10%
Trader/ assembly agent
costs + margin
34.1%
Farmers operating individually, in
areas distant from collection points,
a lot of time wasted waiting for
delivery or collecting little volumes.
Cold storage to allow bulking at
collection points could add
significant value
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
3.3.2 Milk grading & bulking, cold storage and transportation
There are three distinct value adding activities that camel milk goes through once it reaches
Isiolo town for it to reach the Nairobi urban market. These include grading and bulking, cold
storage and transportation to Nairobi. Grading, bulking and cold storage activities are
undertaken by Isiolo-based camel milk traders (over 90% women) estimated to range from
around 25 during the dry season to about 60 during the wet season of peak camel milk
production.
45
Milk grading, bulking and cold storage
The biggest demand for camel milk in Kenya is in its fresh form, largely for preparing tea or
for young children. It is therefore important that milk is able to reach consumers while it is
still fresh. Since milk to the Nairobi urban market is transported by buses that depart Isiolo
town by 6.30 am, milk from farmers has to stay in Isiolo overnight so that it can be loaded
into the buses in time for the early morning departure. This requires cold storage and, in
response, an elaborate business for cold storage has emerged in the town. A census carried
out during the study of the number of businesses involved in cold storage of camel milk
showed that there are seven cooling hubs in Isiolo town with a cold storage capacity of 8,020
litres of camel milk per day (Table 3.7). These could be termed as bulking and cold storage
centres.
Table 3.7
Cold storage capacity in Isiolo town
Cooling hub
No. of
freezers
Storage
Current (dryPer cent
Capacity
season) utilization utilization (%)
(litres)
(Litres)
1. Addis Shop – Anoley W.G
12
1,440
600
42%
2. Dubai Shop – Anoley W.G
12
1,440
600
42%
3. Jedda Shop – Anoley W.G
12
1,440
700
49%
4. Al-amin shop – Anoley W.G
12
1,440
800
56%
5. Safi Estate – Anoley W.G
10
1,200
400
33%
6. Safi Estate – Abdi Rahman
4
480
200
42%
7. Abdi Rahman Shop*
5
600
400
67%
Total
67
8,020
3,700
46%
*
Abdi Rahaman also has cold storage/ice making plant bought from a fish processing firm that has a
cold storage capacity of 20,000 litres. It however needs repair to function.
Source: Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
At the time of the study which was during the dry season, only 46% of the storage capacity
was being utilized as a result of milk shortage. Five of the cooling hubs are owned by an
association of 52 women (Anoley women group) all of whom are camel milk traders9. The
other two hubs are owned by a businessman in Isiolo town (Abdi Rahman Abdile) who is
also a camel owner with 100 camels and buys milk from other farmers to take to the Nairobi
urban market. The cooling hubs can therefore be said to be part and parcel of the camel milk
trading activity and, as mentioned, can actually be termed as bulking centres. Cold storage
can however also be seen as a business on its own right. For instance, Anoley women group
only owns about a half of the 58 freezers in their cooling hubs with the rest leased from
different business people at a rate of Ksh 2,000 per month. Any trader who is not a member
of the women group is charged Ksh 50 per 20 litre jerrican of camel milk stored overnight
(i.e. Ksh 2.50/litre).
Once milk arrives at the bulking/cooling hub, it is weighed to confirm volume and tested
using a combination of three simple methods – physical appearance; testing by mouth; and
dipping of a wooden cooking spoon (mwiko) to see if the fermentation process has began.
Milk from evening milking is separated from milk from morning milking which are then
pooled into 20 litre jerricans. Fresh milk is also packed separately from fermented milk –
most of it in 20 litre jerricans. Although camel milk is not regarded as spoiled when it is
received in fermented form and actually fetches the same price as when fresh, the demand for
“fresh” is higher than that for “fermented” and, therefore, “fresh”is preferred. Once milk is
9
These women traders operate individually each currently handling only about 100 – 150 litres per day
depending on supply and capital. Only about half of the members were actively buying and selling milk at the
time of the study.
46
weighed and graded, records are taken (supplier, volume, grade) and, for some traders,
money paid on the spot. Some traders however, pay the suppliers with a one-two day lag until
they are paid by their agents in Nairobi. Milk is then put in freezers for cold storage until the
following day.
Transportation
The transportation activity has two segments. The first involves transferring the milk packed
in 20 litre jerricans from the bulking/cooling hubs to Nairobi bound buses. This is done by
casual labourers using wheelbarrows, each ferrying 2 – 5 jerricans per trip depending on the
distance. Some cooling hubs are just a stone throw away from the bus stages and Ksh 20 is
paid per trip. Others are however quite some distance (e.g. Safi Estate hubs) and Ksh 20 is
paid per jerrican. This milk transfer activity is handled by a group of about 5 – 10 young men
depending on the season.
Transportation to Nairobi is by four buses plying the Isiolo-Nairobi route, departing between
6.00 – 6.45 am each morning and getting to Nairobi (Eastleigh final stage) by around 11.00
am. Table 3.8 shows the capacity and charges by each of the buses.
Table 3.8
Milk transportation capacity: Isiolo-Nairobi
Bus company
Capacity
Current
Price per 20
Price for money transfer –
volumes
litre Jerrican
Nairobi:Isiolo per envelop –
transported
paid to driver on delivery
Isiolo Star
1,600
1,200
50
100
Busways/Buscar *
1,200
1,200
50
100
Northern Horse
1,600
1,200
50
100
Isiolo Coach**
800
60
50
100
Total
5,200
3,660
50
100
*
The bus can take up to 80 jerricans of 20 lt each but since it has no carrier, two chambers (of 10
jerrican capacity each) are reserved for other luggage
**
bus used to utilize full capacity but former conductor/driver ran away with traders money; it is now
only used by one trader (60 litres), other than time when either of the other buses is broken down
Source: Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
At the time of the study, the four buses were ferrying to Nairobi on a daily basis 3,660 litres
of milk at a charge of Ksh 50 per 20 litre Jerrican. This represents a 70% utilization of the
milk cargo capacity of the buses. For this 3.7 tonnes of milk, the total amount paid is Ksh
9,150. Compared to AA rates for a 3 tonne truck, this transportation mechanism for milk is
about 40% cheaper than the real transportation costs which would normally be incurred in
transportation of goods. While this can be considered to be a conducive factor contributing to
efficiency and competitiveness of the sector, it can also be looked at from a negative
perspective. The current transportation capacity of the buses is limited and, taken together,
the four buses are unable to take significantly much higher volumes of milk such as those in
supply during the rainy season. Furthermore, the bus transportation is not suitable for milk
transportation especially when important hygiene and food-safety considerations are taken
into account. Indeed, information from milk traders indicate that part of the reason they do
not use aluminum cans is because the buses have rejected them, largely due to the increased
weight. The continued provision of milk transportation services by buses at the current
(under-cut) rates therefore undermines the emergence of a specialized transportation business
for camel milk to Nairobi which would be capable of taking increased volumes and offer high
quality standards in hygiene and food-safety.
47
Table 3.9 and Figure 3 present an analysis of the bulking-cold storage-transportation value
chain for camel milk from Isiolo District to the Nairobi urban market. They show that on the
whole, this is an efficient segment where, although actors involved are making positive
margins, real profitability could only be achieved through increased volumes.
Table 3.9
Bulking centre – Nairobi market chain analysis
Cost item
Anoley WG hubs
Abdi Rahman shops
Volume of milk per day (lts)
3,100
600
Monthly volume of milk (lts)
93,000
18,000
Purchase price per litre (Ksh)
35
35
Total cost of milk/month (Ksh)
3,255,000
630,000
Cost of freezers (@ 2,000/month
116,000
18,000
Wheelbarrow transport/20 lt
20
20
Monthly wheelbarrow costs
93,000
18,000
Rental costs/month
15,000
6,000
Electricity costs/month
10,000
5,000
Cleaning of jerricans/month
22,500
4,500
Total costs for bulking (Ksh)
256,500
51,500
Transport to NRB per 20lts
50
50
Monthly transport costs
232,500
45,000
Money transfer costs/envelop
100
100
Monthly money transfer costs
78,000
3,000
Total value added/month (Ksh)
567,000
99,500
Purchase cost + directs costs
3,822,000
729,500
Selling price in Nairobi/litre
45
45
Total monthly revenue
4,185,000
810,000
Gross Net Income/month
363,000
80,500
Average traders involved
25
1
Monthly Gross income/trader
14,520
80,500
Imputed labour/mgt costs/day
200
200
Total monthly labour costs
150,000
6,000
Overall Total monthly costs
3,972,000
735,500
Profit margin/trader
8,520
74,500
Source: Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
Total
Cost/litre
3,700
111,000
35
3,885,000
134,000
20
111,000
21,000
15,000
27,000
308,000
50
277,500
100
81,000
666,500
4,551,500
45
4,995,000
443,500
26
17,058
200
156,000
4,707,500
35.00
1.20
1.00
0,20
0.15
0.25
2.80
2.50
0.70
6.05
41.00
45
4.00
4.00
1.40
42.40
2.60
Figure 3: Bulking centre – Nairobi market value chain
Includes rental (7%); Electricity (5%)
and Container cleaning costs (9%)
Freezer
44%
Transfer
35%
Other
21%
Each trader charged Ksh 100 for
money transfer by drivers – MPesa would cost half, more secure
Cold storage
Transport
33.8%
Milk payment
9.5%
Labour/mgt costs
18.9%
37.8%
Capacity utilization of cold
storage limited by milk
supply into Isiolo town –
partly due to low milk
production & transportation
problems for milk to Isiolo
Source: RMC/SNV Camel Milk VCA, Sept/Oct 2008
Capacity of the buses that ply
Isiolo-Nairobi route a major
limitation to capacity utilization
especially during rainy season
when milk supply is not
constrained. Current rates
charged are only 40% of cost of
alternative means
Poor organization of
traders making them
work individually, low
margins – temptation
to adulterate
milk/water to increase
margins
48
3.4 Processing
Although there have been many discussions and initiatives towards camel milk processing in
the past, it is only the Vital Camel Milk Limited plant based in Nanyuki, Laikipia District,
that is currently processing camel milk in Kenya. This, indeed, makes it one in only a handful
of camel milk processing plants in the World (FAO, 2008). The plant was established in 2005
with the aim of sourcing camel milk from Isiolo District and other neighbouring districts to
process it largely for high-end urban consumers in Kenya and the international market at
large.
VCML has a fully operational plant in Nanyuki town with a daily processing capacity of
1,200 litres on a one 8-hour shift10. The plant is however currently receiving only 200 litres of
camel milk per day but processing twice a week with an average weekly average of 2,000
litres. Milk is currently sourced from 15 accredited farmers, all from Laikipia District
(Rumuruti, Dol Dol, Laikipia West, Kimanju area and other areas around Nanyuki town.
Current workforce is 5. For farmers to supply milk to the plant, the company must do an
analysis of husbandry practices and quality of milk produced. Milk is also laboratory-tested
every time it is delivered to the factory by the farmer. The plant is currently producing fresh
milk (in half litre units), fermented milk (mala/susa), Yoghurt and Cheese. It also has a
machine for Ice-cream making but is currently not producing this product.
Past production levels were however much higher. At its peak level of operation in the past,
VCML had 63 farmers from Laikipia alone (including 5 Ranches) and was also sourcing milk
from camel milk producers in Isiolo as far as Kulamawe and even Laisamis in Marsabit. At
this time it had up to 36 workers and would handle up to 4,000 litres in a day11. The current
low level of production is largely as a result of problems faced in supply of milk into the
international market, initially to South Africa and Chile, and lately to California (USA) where
substantial losses have been incurred due to quality issues. Discussions with the Managing
Director however paint a positive picture of a re-bounce following successful marketing
missions to the US, EU and Middle East Markets.
Camel milk is currently delivered to the factory although the company has 2 Land Rovers for
milk collection which it uses for milk collection during periods of high demand. Factory gate
prices to farmers are Ksh 40 per litre. Although the study team could not access detailed
costing information, estimates by the Managing Director indicates that, at current level of
production, operational costs amount to about Ksh 30 – 40; packaging Ksh 35, and
transportation Ksh 80 per litre. The milk is supplied to wholesalers in Nairobi and other parts
of the country at Ksh 84 per half litre (i.e. Ksh 168 per litre) with a recommended retail price
of Ksh 94 per half litre. From a survey of retail outlets however all retailers with VCML
milk are retailing the milk at Ksh 120 per half litre.
Figure 4 presents the VCML processing to retail value chain analysis. Even without inclusion
of capital costs, marketing expenses and a margin, it is clear that the company is far from
breaking even. The main culprit is the low capacity utilization which appears to be related to
the low level of market development.
10
This is from information provided by the Operations Manager. Some secondary information on the plant have
reported 6,000 litres and some even 10,000 litre capacity. The RMC team was not able to verify actual capacity
11
This seems to corroborate documented information that the plant has an installed capacity of 6,000 to 10,00
litres per day.
49
Figure 4: VCML camel milk processing value chain
Low capacity utilization of the whole process implies high per unit costs.
Significant increases in capacity utilization are possible and these would cut
down per unit costs significantly
Raw milk from
farmers 21.6%
Factory operations
16.2%
Farmers in Laikipia have
shown a capacity to supply
quality milk. This could be
replicated elsewhere
Packaging
18.9%
Transportation
43.2%
Local market is not yet well
developed and outlets are only taking
small volumes meaning heavy
transportation per unit
This is also the same reason why retailers have loaded a 25% margin on the product in an
attempt to recover costs of the low moving item. As will be discussed in Section 3.5.2, this
high price is however counterproductive to efforts made towards development of the market.
Since the local (Kenyan) market is significantly price sensitive, efforts towards increasing
efficiencies in the processing segment must be built on increased capacity utilization through
volumes. With lower prices, there are strong indications that efforts targeted at market
development could have significant payoffs in a relatively short period. Just like has emerged
under the other segments of the chain, the common thread for increased efficiency and
competitiveness of the value chain is volume, productivity.
3.5 Wholesale and retail trading
Camel milk wholesale and retail activities are best analyzed under the various market
segments or channels. The first relates to the raw milk market to urban areas while the second
is for the high quality pasteurized milk to urban and international markets.
3.5.1 Wholesale and retail value chain for raw milk in Nairobi
Table 3.10 and Figure 5 present an analysis of the wholesale and retail value chain of raw
camel milk in Nairobi’s Eastleigh market. There are three general selling points of camel
milk in Eastleigh – 7th street near the Isiolo bus stage; 12th street near the Garissa bus stage;
and a street in between these two streets called Jam street. The 7th street largely sells camel
milk from Isiolo and so does Jam street which handles slightly more milk than the 7th street.
Camel milk sold at 12th street is much less than in either of the other two selling points and
comes from Garissa, Isiolo and Namanga.
Eastleigh has about 50 traders who receive milk from the three sources – Isiolo, Garissa and
Namanga. These traders, all women, can be regarded as wholesalers. They receive milk
mostly in 20 litre plastic jerricans at a price of Ksh 1,000 (Ksh 50/litre) during the dry season
and Ksh 900 (Ksh 45/litre) during the wet season. Depending on milk availability, each
trader handles between 3 – 10 jerricans (60 – 200 litres) per day. Milk received is transferred
from the buses to the selling points using handcarts which charge Ksh 20 per 20 litre jerrican
from the Isiolo buses to any of the three milk selling points. The transfer charge is Ksh 10
per 20 litre jerrican from the Garissa bus stage to the 12th street selling point because the
distance is shorter.
50
Out of the total milk received, about 50% is sold directly to large volume consumers at a
wholesale price of Ksh 1,100 per 20 litre jerrican. These include restaurants within Eastleigh
(estimated to be more than 10 which deal in camel milk) and some households who have
freezers and are able to take volumes of 5 litres or more to store. Some of the milk is also
forwarded to other traders outside Nairobi – in particular, Kakuma refugee camp, Kisumu
and Kampala. A number of the wholesale traders also have occasional buyers who take up to
10 litres every time they are traveling abroad (one to Turkey). The remaining 50% of milk is
sold at wholesale price to retailers or even directly to consumers at retail prices of Ksh 80 per
litre, usually in units of ½ litre. Although most of the wholesalers sell their milk in bulk
(wholesale) some opt to retail part of the milk because the retail margins are much better (one
20 jerrican able to fetch ksh 1,600 under retail instead of the Ksh 1,100 wholesale price).
Table 3.10
Wholesale and retail value chain raw milk in Eastleigh market*
Item
Total
7th street
Jam street
12th street
(Isiolo bus
(in between
(Garissa bus
stage)
7th & 12 st)
stage)
Volume of milk received per day
2,000
2,500
500
5,000
Monthly volume of milk handled
Number of agents/wholesalers
Source of milk:
Isiolo
Garissa/Bangale
Namanga
Purchase price/ 20 litre jerrican (Ksh)
Purchase price per litre
Total monthly expenditure buying milk
Bus stage – selling point transfer cost/20lt
Monthly bus transfer expenses
City council licenses @ Ksh 25/2 days
Total expenses by wholesalers
Wholesale price per 20 litre jerrican
Wholesale price per litre
Total monthly wholesaling revenue
Gross net wholesale incomes (margin)
Net income per agent/wholesaler
Retail
Proportion of milk retailed
Volume of retailed milk per month
Number of retailers
Retailer purchase price per litre (Ksh)
Retailer direct expenses (Cess/packaging)
Total monthly expenses by retailers
Retail price per litre
Total monthly retailer revenue
Gross Net Monthly income (margin)
Gross net monthly income per retailer
Average daily milk volume per retailer -lt
Average
cost/litre
60,000
20
75,000
25
15,00
5
150,000
50
2,000
1,000
50
3,000,000
20
60,000
6,000
3,066,000
1,100
55.00
3,300,000
234,000
11,700
2,500
1,000
50
3,750,000
20
75,000
7,500
3,832,500
1,100
55.00
4,125,000
292,500
11,700
200
200
100
1,000
50
750,000
14
10,500
1,500
762,000
1,100
55.00
825,000
63,000
12,600
7,500,000
50.00
145,500
15,000
7,660,500
1,100
55.00
8,250,000
589,500
11,790
1.00
0.10
51.10
50%
30,000
68
55.00
34,000
1,684,000
80.00
2,400,000
716,000
10,529
15
50%
37,500
85
55.00
42,500
2,105,000
80.00
3,000,000
895,000
10,529
15
50%
7,500
17
55.00
8,500
421,000
80.00
600,000
179,000
10,529
15
50%
75,000
170
55.00
85,000
4,210,000
80.00
6,000,000
1,790,000
10,529
15
55.00
3.90
55.00
1.10
56.10
23.90
*
Volumes of milk may vary from estimations given from the source due to estimation which are based on averages
Source: RMC/SNV Camel Milk VCA, Sept/Oct 2008
Estimates put the total number of camel milk retailers in Eastleigh at 170. Out of these, about
30 are door-to-door hawkers who take their milk to different parts of Eastleigh, largely
targeting households. Out of these 30, a few (estimated to be about 5) also take their milk
51
beyond Eastleigh to other estates in Nairobi particularly South B, South C and Embakasi. The
rest of the traders (about 140) sell their milk in open air along the three streets – 7th, 12th and
Jam streets. The environment under which they sell the milk can generally be characterized
as unhygienic (if not hazardous) - open sewers, dust from cars, everything placed on the
ground, milk-holding jerricans used as seats, 500ml cup used for measuring milk units
retailed just left in the open and not re-washed or covered when not in use.
Overall, an analysis of the value chain shows that it can generally be described as efficient in
delivering raw milk (albeit of low quality) to consumers in this market segment. Margins are
positive and, indeed, quite high at the retail segment but due to the small volumes handled per
trader, overall profitability is quite low, in the region of Ksh 10,000 – 15,000 per month per
trader (both wholesale as well as retail). Due to the low overall profits in camel milk trade,
most traders are combining selling milk along with a myriad of other commodities – mostly
foodstuffs (e.g. dates, fruits, vegetables).
Figure 5: Wholesale and retail value chain for raw camel milk to Eastleigh
Direct costs 5%
Milk transfer
from buses
3%
Transportation 15%
Wholesaling
13%
Labour 80%
Retailing
84%
Though margins
high, profit low
due to low
volumes
Un-hygienic trading environment a big limitation to
expansion of market beyond traditional camel milk
consumers
3.5.2 The high end pasteurized milk market
The study team visited several supermarkets that included Nakumatt, Uchumi, Ukwala,
Tuskys, and a host of mini markets in Eastleigh.
On visiting, the Team found that camel milk retails as Vital Camel milk (Live vital!) and
generally stored in a fridge next to the much bigger fridge storing other types of milk.
Table 3.11
Analysis of price of camel milk and others (for half a liter quantities)
VCML
Delamere
Daima
Brookside
Tuzo
Type
of
milk/Seller
Yogurt Kshs
160
68
Normal Kshs
120
30
34
Quantity
5-6
5-6
> 10
stocked in
dozens
Fat quantity
3.3%
2.3%
3.0%
Source: Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
KCC
71
32
> 10
71
32
>10
65
30
>10
3.0%
3.3%
3.3%
Daima Yogurt was not available in the supermarkets visited and hence the blank amount in
the table. Of interest to the team, therefore, was why such a differential in cost and what it
52
means to the purchasing power of the public. This matter will be revisited in detailed analysis
later in the report.
From Table 3.11 above, it is clear that camel yogurt is twice as expensive as the others
(160/68 and 160/71). The picture is even more significant when we compare normal camel
milk and others. It turns out to be four times the cost of cow milk (120/30, 120/34, 120/32).
The high-end retailers were further analyzed in detail to reveal the volumes they sell per day
(or per week), number of outlets, their view of demand, and the selling price of camel milk
among other things.
Table 3.12
Analysis of various factors across high-end retailers (for half a liter)
Factor/Retailer
Nakumatt
Uchumi
Ukwala
Tuskys
Mini markets
Sales vol per day 30
10
10
10
24
No. of outlets
19
11
6
20
5
Type of customer Somalis and
Somalis
don't know
Somalis
Somalis
health
conscious
View of demand
strong and
average
Average
weak
very strong
likely to
grow
Purchasing price
84
84
94
94
94
Selling price kshs 120
120
120
120
120
Source:
Source: RMC/SNV Camel Milk VCA, Sept/Oct.2008
Total
61
The sales figure per day depends on the location of the outlet in question. Uchumi branch at
Sarit Center, for example, sells an average of 20 units per day, the Uchumi Ngong Hyper
sells 2- 3 per day and most units are approaching expiry day, and the Uchumi branch at
Koinange street does not stock camel milk (they used to do it but stopped stocking due to
lack of sustainable demand). On the hand other, the mini markets located at Eastleigh are
doing better although in general the units sold per day are still few (some up to 50 units per
week). The Team took an average of 20 units per day per retailer for purposes of gauging
sales per day (and per week).
Nakumatt has 19 outlets in the country (Ngong Junction, Prestige, Mega, Embakasi,
Downtown, Lifestyle, Thika Road, Highridge, Ukay, Westgate, Karen, Kisumu City, Nyanza,
Kisii, Eldoret, Nyali, Likoni, Village market, and New Nyali). Of these, only 13 stock camel
milk (in Nairobi and Mombasa urban centres). The ones in milk-producing areas cannot
compete with local milk production and the demand for camel milk is very weak. Nakumatt
is a fast growing supermarket chain, and its customers have high purchasing power and they
are also health conscious. It provides a good opportunity for future growth of camel milk
sales.
Uchumi supermarket has 11 outlets in the country (Ngong Hyper, Adams, City Square,
Koinange, Nairobi West, Langata Hyper, Sarit Center, Westlands, Eldoret, Meru, and
Nakuru). The customers of Uchumi include the middle income, high income, and low income
group. Of these outlets only 7 stock camel milk (the ones that do not stock are Eldoret, Meru,
Nakuru, and Koinange).
Ukwala and Tuskys have stopped stocking camel milk due to low demand. However, the
figures shown above were their average sales before they stopped selling the product. Ukwala
has 6 branches in Nairobi, 5 of them concentrated in the City centre and 1 in Eastlands.
53
Tuskys has 11 branches in Nairobi and 9 branches spread across the country (a total of 20). It
is the fastest growing supermarket serving low- to middle-class customers and provides an
opportunity to expand camel milk sales. The mini markets are many and varied in terms of
size and location. However, the Team visited 5 (located in Eastleigh) that offer great scope
for selling the product.
Customers to the retailers mentioned above are Somalis and health-conscious clients.
Whereas Nakumatt and mini markets estimate the demand to be strong, Uchumi projects it is
as being average while both Ukwala and Tuskys paint a gloomy future demand. Purchasing
price was said to be between Kshs 84 and 94 and the selling price was Kshs 120 across all the
markets. Interviewees did not wish to have their names included in the report for fear of
being accused of giving away confidential company information. However, they included
managers, supervisors, and staff manning the milk sections of each chain.
The retailers are making a margin of 27.6% to 42.9% ((120-94)/94*100% and (12084)/84*100%)). This is a high margin that, again, will be discussed in detail later. It is part of
what pushes the cost of camel milk to prices many times more than the cow milk.
Current volumes of milk sold per day is estimated by multiplying the number of retailers
branches selling (13+7+5) times the 20 units sold per day. This equals 500 half-liter packages
or 250 liters per day (500/2). On a weekly basis, this would be 1,750 liters (250 *7). The
potential, if all branches sold camel milk after strong marketing efforts, would be an average
of 20 units per day times 61 branches equals 1,220 units per day or 8,540 units per week.
This would be equivalent to 4,270 liters per week. And of course the supermarkets are
growing, the potential mini markets are innumerable, and the marketing efforts would attract
new customers or deepen usage by the current customers.
In the course of the study, interviewees constantly talk about the health and medicinal value
of camel milk. However, the Team members did not come across a major health outlet that
frequently purchases camel milk for its patients or constituency it serves.
3.6.
Input supply
The main inputs used in camel production are veterinary drugs (antibiotics, trypanocides,
antihelmintics, etc) acaricides, minerals such as common salt, syringes and injection needles.
All these items are readily available in the six chemists stocking livestock inputs in the Town
of Isiolo. The most important drug used is Tryquin for Trypanosomiasis. There are a few
brands of antihelmintics but the pastoralists use the cheaper ones. Ivomectin the more
effective one is hardly purchased. The chemists are well stocked and are manned by people
who are experienced in both camel husbandry and treatment of diseases. Their knowledge,
however, is hardly used as the pastoralists know the camel diseases and the drugs needed.
Occasionally they consult the chemists but the chemists do not travel to the herds. The
chemists report brisk business of selling antibiotics, trypanocides and antihelmintics
indicating that the pastoralists recognize the value of the drugs. Isiolo is the only major town
where veterinary drugs can be bought. Smaller towns did not stock drugs. Some camel
owners complained about high prices.
3.7.
Service providers
Isiolo District has full departments of Livestock Development and veterinary services. The
senior staff are very qualified. The less senior staff however are out of depth in camel
54
matters. There is a need for retraining (short focused courses) on camel diseases and
husbandry. The district has few other service providers. CAHWs have been trained in the
past, but as usual once they finish the drugs in the kit, they never replenish the kits. There is a
need for training pastoralists in clean milk production, camel husbandry etc. Vital Camel
milk in conjunction with KARI also trained pastoralists in clean milk production but more is
needed before the pastoralists can produce clean camel milk.
3.8 Summary analysis of the camel milk value chain
Figures 6(a) and 6(b) show the entire value chains for camel milk into the Eastleigh market
and that of pasteurized camel milk into the high end urban market. The raw milk value chain
is fairly efficient and as a result, it can be regarded as profitable. Low productivity at the
farmer level, lack of farmer organization, current cost structures and a generally low level of
development of the chain have combined to make volumes handled to be fairly low to an
extent that profitability is generally low. Under current production systems and cost
structures at the farmer level, the most important actors in the chain - milk producers - are not
making money. This must, therefore, be the starting point in development of the chain. On
the other hand, the pasteurized milk value chain is currently loss making. This is largely as a
result of the extremely low milk volumes handled and poor development of the market, partly
aggravated by the high retail prices charged as a result of the inefficiencies of the chain
associated with level of operation below the viability threshold.
Figure 6(a): Value chain of raw milk camel milk from Isiolo to Eastleigh market
Heifer: 19%
Herding: 63%
Production:
Ksh 25 (31.3%)
Low milk productivity as a
result of animal husbandry
practices, breeds & milking
practices. Poor milk quality
– milking/handling &
animal health. Farmers not
making money
Assembly
Ksh 10
(12.5%)
In-hygienic operating not
just threat to public health
but also a major limiting
factor to market expansion.
Feq. Harassment by LAs
Other: 18%
Bulking &cold
storage: Ksh
12.50 (15.6%)
Transport
Ksh 2.50
(3.1%)
Bus transportation less than
40% of real costs.
Undermining emergence of
specialized transportation
for camel milk
Wholesale
Ksh 5
(6.3%)
Retailing:
Ksh 25
(31.3%)
Volumes
constraining
profitability in
whole chain;
temptations to
adulterate milk to
meet high demand
55
Figure 6(b): Value chain of pasteurized camel milk to high end urban consumers
Heifer: 19%
Herding: 63%
Production:
Ksh 30 (12.5%)
Farmers in Laikipia showing
good promise in adhering to
quality standards in milk
production; Productivity,
however, still low limiting
profitability of camel milk
production enterprises
Assembly
Ksh 10
(4.2%)
Other: 18%
Processing:
Ksh 70 (29.2%)
From a retail price of Ksh 240,
Processor appears to be making losses
of Ksh 22 per litre f production. This is
even without taking capital cost and
expenses in marketing.
Transport
Ksh 80
(33.3%)
Low volumes of current
production and demand by
each outlet makes
transportation extremely
uneconomical
Retailing:
Ksh 72
(30%)
High retail price of
Ksh 120 per ½ litre
and poor market
development have
made product very
slow moving –
sometimes expiring
56
4
POLICY, REGULATORY AND
INSTITUTIONAL FRAMEWORK
4.1 Overview
Policy, regulatory and institutional factors are a key determinant of the business environment
under which enterprises within a specific value chain operate which, in turn, determines the
growth potential and overall competitiveness of the value chain. This section explores the
policy, regulatory and institutional framework under which the camel milk value chain is
currently operating. The purpose is to identify any stifling factors that need to be addressed
(or taken into account) on the one hand, as well as supportive aspects that present
opportunities for growth and vibrancy of the value chain.
4.2 Policy and regulatory environment
The Government of Kenya (GoK) is involved in the camel milk sub sector. Its involvement,
however, is through policies and activities of a diverse group of agencies working within the
government structure. The main ministries involved include those in charge of livestock
affairs (ministry of livestock development), the ministry of the Development of Northern
areas (the habitat of camels), the Ministry of Trade and Ministry of Industrialization. These
ministries’ and their agencies’ involvement are summarized in table 4.1. In addition, the
consultants give what in their view the ministries should do more.
Table 4.1
Summary of government agencies involved in camel milk industry
Ministry/
Agency
Ministry of
Livestock
Development
Involvement so far
•
•
•
•
Developed a livestock policy
that includes the promotion of
camel milk production
Through one of its parastatals
(the Kenya Dairy Board), it
developed a dairy bill that
recognizes camel milk and sets
the framework for inspection for
quality.
Through its ALLPRO
programme, it has prioritized
camel production. So far, a joint
ALLPRO/ KCA/ ILRI/ KARI
study of camel milk production
and marketing has been
completed. Camel extension
guidelines have been developed.
ALLPRO has funded advanced
training for some camel
scientists.
MOLD is in the process of
establishing a camel milk
What more can be done
•
•
•
•
•
A camel policy, equivalent to the dairy
bill for dairy cattle milk, is needed to spur
development. MOLD should spearhead
this.
The dairy bill is still at the AG chambers.
MOLD should persuade the AG to have
the bill debated and enacted into law.
Recommendations of the joint study that
touch on camel milk quality should be
addressed. Camel production extension
work should be put on the fast burner.
As veterinary doctors specialized in
camel medicine are needed, MOLD
should sponsor some (short as well as
post graduate degrees).
MOLD should use its connection with
FAO to promote camel milk exports as it
has done in Mauritania.
57
•
Ministry of
regional
Development
•
•
Ministry where
KeBs falls
•
•
Ministry of Local
Government/Local
authorities
KARI
•
•
•
•
•
•
Ministry including
ALRMP
•
•
Universities
•
•
processing plant in Garissa.
The Veterinary Department
controls camel diseases although
it has a dire shortage of field
staff experienced in camel
medicine.
ENNDA is developing more
water resources in its mandated
area.
ENNDA jointly with Egerton
University studied camel milk
production under the zero
grazing system
KeBS has gathered data to guide
it in formulating standards for
camel milk.
Currently, KeBS uses its code
for hygiene and general standard
for microbial quality to police
camel milk quality.
Licences camel milk sellers
Checks on licencing (harasses
camel milk sellers)
Researches on camel milk
production, marketing, quality
etc
Participated in an ALLPRO
joint study on camel milk
production and marketing.
Participated in a joint study
(with Egerton University) on
camel milk production
Has participated in camel milk
quality extension work in
Kulamawe.
Restocking with camels
Improvement of water supply in
Arid Lands
Egerton University participated
in a joint study with ENNDA
and KARI on camel milk
production
University of Nairobi has
studied camel milk quality
•
•
•
•
•
KeBS needs to complete the formulation
of the standard so that KDB and KeBS
can legally police camel milk quality.
Commercial attaches in Kenyan
embassies abroad should promote camel
milk exports
Camel breeding should be incorporated in
research.
KARI also needs to train more
specialized camel scientists (short and
long courses)
KARI needs to more participation in the
camel milk value chain work as more
economics is needed to elucidate some
issues.
•
Should fund a camel population census.
•
More studies needed especially on camel
diseases and management.
4.3 Institutional framework
Institutional support influences the dynamics and viability of a value chain. The following are
some of the key institutions that support the camel milk value chain.
4.3.1 Kenya Camel Association
The Kenya Camel Association (KCA) was founded in 1995 following a well attended
camel forum at Nanyuki. Essentially, its main role is to articulate and lobby on issues
relating to camel development in the country and regionally. It was formally registered in
1997 and opened its first office at Nanyuki .The national office is currently in Nairobi
58
courtesy of MOLFD (Ministry of Livestock and Fisheries Department)/ALLPRO (ASALBased Livestock and Rural Support Project).
Objectives of KCA
To provide a forum for camel owners within the republic of Kenya through
meetings, forum work shops, and seminars.
To improve and promote better usage and better animal husbandry of camel in
general, improving productivity including addressing, identifying and
highlighting camel problems and seeking solutions.
To improve the marketing of camels and camel products nationally and
internationally.
To peruse and enhance awareness and understanding of camels through research
and extension.
Activities
Principally the convening of the Kenya camel forum, an annual gathering that
brings together camel owners and other stake holders to discuss and share
information on issues pertaining to the camel.
Conduct workshops for camel owners on aspects of camel husbandry and health
value edition to camel products.
Undertake collaborative research with partner institutions, information
dissemination through forum publications and newsletters.
Facilitate in camel derbies
Membership and area of operation
KCA operates and has over 500 members in 17 semi-arid districts in Kenya, regionally
and abroad.
Main achievements
1 The Association has been convening the annual camel forum for the past 10 years.
2 Dissemination of information through proceedings, publications, and newsletters.
3. Two collaborative researches projects with KARI on small-scale value -adding and
characterization with NVI-Sweden on camel calf diarrhea and KEMRI on camel milk and
diabetes.
Implementing partners
Local partners
Ministry of livestock development (MOLD)
ASAL-Based Livestock and rural support project (ALLPRO)
GTZ-PSDA Program.
ILRI
ALRMP 11
International partners
Natural Resource International (NRI-UK)
The Association can play a critical role in enhancing the awareness of camel milk in fighting
poverty and increasing household income. Its large membership, variety of stakeholders, and
59
close collaboration with the Ministry of Livestock and Fisheries Development makes it
appropriate to lead in lobbying for effective policies for camel milk.
4.3.2 Kenya Livestock Marketing Council
Kenya Livestock Marketing Council (KLMC) was established in 2000 as a Private sector,
non-profit-making service organization dedicated to the improvement and development of
the livelihoods of livestock producing communities and contributes to the economic
development of Kenya.
Main Objectives
To advocate for the interests ad rights of the members on livestock matters in
collaboration with other stake holders.
To promote livestock and livestock products marketing in the country and in
particular in pastoral areas in order to enhance and improve the economic well
being of livestock producing communities.
To enhance marketing information, dissemination and communication to producers
and traders.
To solicit for funding including credit and offering group guarantees.
Lobby for policy change to favor appropriate livestock development.
Build capacities of users groups to sustainable manage livestock related
infrastructures and undertake community based diseases control measures.
Specific Objectives
Expand KLMC activities to have national representation.
Avail and disseminate livestock marketing information.
Organize consultative forums between producers, traders, transporters, butchers,
and consumers to harmonize livestock products trade.
Work closely with Department of veterinary Services for the Associations to
manage quarantine facilities sustainably.
Outsourcing for markets, nationally regionally and internationally.
Community mobilization and participation in development activities.
Organization and Governance
The KLMC derives its strength and membership from the grass-root whereby producers,
traders, users association and other interested stakeholders registered as members in all
districts. Registered members in the District form the District Livestock marketing
Association. The members elect District officials (two delegates) to represent them at the
National Kenya Livestock Marketing Council Form. Nine persons among the delegates are
elected to a National Directors forum. This elected Board of Directors together with the
national secretariat manages the organizations affairs at national and regional levels. There
are also 11 elected officials in every district that manages the day to day district activities.
So far there are 2,915 registered corporate and individual members. The secretariat is run
by a group of dedicated and competent techno crates with vast experience in pastoral
issue.
National Office Structure
To enhance its operation in this vast region, KLMC has divided its operation 5 regional
offices consisting of.
(a) Northern Region: Isiolo, Marsabit, Moyale, and samburu districts.
60
(b) Northern Eastern Axis: Garissa, Marsabit, Mandera, Ijara, Wajir and Tana River.
(c) Northern West Axis: Baringo, Turkana.
(d) Southern Axis: Kajiado, Narok.
(e) Nairobi terminal market: Kariobangi, Njiru and Dagoretti.
The KLMC, in partnership with the KCA, should continue to promote camel milk issues on
the national stage. By advocating for rights and interests of its members, and sharing
marketing opportunities in the camel milk, the KLMC can effectively mobilize community
participation and increase efficiency and effectiveness in the camel milk chain.
4.3.3 Association of Pastoralists
The Association of pastoralists exists to lobby and advocate on issues affecting their
livestock and livestock products. For example, they have (together with other interested
parties) lobbied to have camel recognized in the formulation of livestock policies. As a
result, all annual censuses of animals include counting of camels. In turn, this has led to
positive consideration of camel milk and other products derived from camel milk like
cheese.
The Association plays the important role of creating awareness, sensitization, and sharing
challenges and potential solutions relevant to pastoralists. Funding to the Association has
come from NGOs (for example, Oxfam).
4.3.4 Farm Africa Kenya
FARM-Africa aims to reduce poverty by enabling marginal African farmers and herders to
make sustainable improvements to their well-being through more effective management of
their renewable natural resources. It works in partnership with communities, governments,
local organizations, international NGOs and the private sector to develop strong rural
livelihoods sharing the results of its work with others to maximize its impact.
One of FARM-Africa Programmes is Northern Kenya Pastoralist Capacity Building
Project. It works with poor African farmers, helping them to produce more food for their
families in order to ensure future generations do not have to depend on handouts of aid.
Northern Kenya Pastoralist Capacity Building Project (NKPCBP) provides pastoralists the
skills and opportunities to manage their resources and influence policy effectively. The
NKPCBP aims to reduce the levels of poverty of pastoral communities in Northern Kenya
and promote pastoralism as a viable livelihood.
FARM-Africa's partners include local NGOs, local community leaders and traditional
elders in northern Kenya. The project has made strong linkages with the Kenya Livestock
Marketing Council (KLMC) in order to enable the KLMC to use their grassroots members
and structures to provide a reliable and sustainable market information system to the
pastoralists.
Since Jan 2008, the Project has completed training on Advocacy & Networking for 30
pastoralists representatives, 34 community micro projects have been successfully approved
by the Community Development Committees (CDC) and are being implemented now and a
further 62 proposals are waiting to be reviewed by the relevant CDC. Three new community
61
animal drug stores have been established, 25 shallow wells have been rehabilitated and
protected, and the recent dry spell has resulted in the government calling for concerted efforts
to be able to cope with any drought that might occur.
4.3.5 Food for the Hungry
Food for the Hungry began its work in Kenya’s Marsabit district as an emergency response to
the drought of 1976. Over the past 30 years, Food for the Hungry has focused on major
initiatives such as food security, water and sanitation, health and nutrition, HIV/AIDS
prevention, education, and child development. With more than 120 well-trained and
experienced staff, Food of the Hungry/Kenya is equipped to expand its operations within and
beyond its current coverage
areas.
Livestock Breeding and Marketing Livestock trading and income are poor in many Kenyan
communities. The livestock development program helps facilitates economic growth in these
communities by (a) establishing sustainable camel breeding and trading of camel milk, (b)
promoting community-based veterinary service through training, (c) promoting livestock
marketing by training livestock traders and building market infrastructures, (d) promoting
fodder production and pasture recovery, community based early warning systems, and (e)
improving local governance and conflict mitigation.
4.3.6 GTZ- Kenya
Kenya is a priority partner country to German, and by implication a priority to Germans
development institution (GTZ). GTZ Kenya has a programme that pursues the value-addedchain approach. Selected products for production and marketing are analyzed- from the use of
farm equipment to production, processing and marketing – the respective actors, strengths
and constraints are identified, and the ways in which the programme can intervene are
determined. Interventions take place at several levels and with a large number of partner
organizations:
At the national level, the sector ministries involved are agriculture, livestock and fisheries,
and co-operative development and marketing. Production, processing and marketing are to be
left entirely to the private sector. At the same time, the modification of laws and export
regulations for the products mentioned are supported. At an intermediate level, professional
organizations and service providers are promoted and advised in order to improve the
advisory and other services they offer to small and medium-sized enterprises. Farmers’
groups and individual farms are advised on how to add the greatest possible amount of value
to their own enterprise. This is done through management and technical consulting, and
internal and external networking, e.g. with buyers, processors and export companies.
GTZ Kenya has worked closely with VCML, farmers and farmer associations to improve the
income of camel herders. This has been through training given to individual farmers and
farmers’ groups, traders, and transporters. Issues of production, quality and standards, and
treating camel milk as a business have been shared with these groups of people. Being an
NGO, GTZ Kenya has stayed away from directly participating in production, processing, and
marketing; leaving these functions to the private sector.
62
4.3.7 Business Services Market Development Programme (BSMDP)
BSMDP was a Business Development Services (BDS) programme which started operations
in Kenya in 2003 with funding from the British Government’s Department for International
Development (DfID) and came to an end in April 2008. Through continuing funding by the
Danish International Development Agency (DANIDA) the program is however still in
operation but has now been consolidated along with other DANIDA-funded BDS programs
under management by the Micro Enterprises Support Programme Trust (MESPT).
In the period 2004 – 2006, the programme worked with the Vital Camel Milk Limited in
support of various interventions geared at increasing availability of large volumes of quality
milk to the plant from small-scale producers in Laikipia, Isiolo and other neighbouring
districts. The relationship with VCML was initiated by VCML following advertisement by
BSMDP of a challenge fund aimed at increasing the availability of business development
services in growth oriented value chains with high impact on poverty. BSMDP’s support to
the company was to the tune of Euro 250,000. This went towards training of farmers on
issues of quality, building of a revolving fund for provision of quality milk containers
(Aluminium); building of charcoal coolers for milk cooling in areas with no Electricity;
development of local animal health services providers to advice farmers on camel husbandry
matters; and other aspects aimed at building the capacity of VCML to source large volumes
of quality milk from small scale producers. From discussions with the manager who was in
charge of the BSMDP programme, the success of the project with VCML adversely affected
by soft issues among the Directors of VCML as well as its relationship with the association of
camel milk producers. Management of farmer organization for increased production of
quality milk and interventions in product assembly are areas which BSMDP feels still require
support. The project under which BSMDP funded VCML has already come to an end and this
is no longer a core area of support under current funding. The project has however
significant institutional memory and the current manager feels that, depending on nature of
interventions required, it could still be an area they could consider.
General Comment
Institutions covered under 4.3.4 to 4.3.7 above are development agencies. Their contribution
towards the value chain cannot be over-emphasized. They are critical in creating awareness,
sensitizing communities, assisting in advocating and lobbying for appropriate policies and
regulation, providing training, acting as guarantors for loan applications by businesses, and
even granting seed capital to micro, small, and medium enterprises. Such assistance and
hand-holding is a significant booster to value chains that would be otherwise be unattractive
to many a businessman who would otherwise ignore such chains. However, the assistance
could also be a hindrance to a healthy competition.
Often, donors do not subject potential donees to a critical evaluation of the viability of their
businesses. Poverty alleviation is the donors’ key focus and as long as a wide spectrum of
persons (especially the marginalized) will benefit from the funding, many donors would
disburse the funding. Such funding does create an unfair advantage to businesses receiving
donor funding over those receiving funding from the market. There is also likelihood
businesses receiving donor funding could continue to exist as long as the funding is available;
only to die as soon as the funding is withdrawn.
63
In summary, therefore, availability of donor is important but cannot be a significant factor in
considering the medium to long-term viability of a value chain or that of its related
businesses.
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5
THE CAMEL MILK SUB-SECTOR MAP
5.1 Overview
This section discusses the organization of the camel milk sub-sector by building on
information generated in the three previous sections. Although as discussed in Section 2.4, a
considerable amount of camel milk produced is consumed by camel-keeping households and
their herders, this section focuses only on marketed milk, tracing it from the producer to the
market through the various channels. A key part of the section is the camel milk sub-sector
map. This is a simplification of what is a complex reality but helps to identify all key players
and the main leverage points for the sub-sector where targeted interventions could affect the
entire value chain.
5.2 The Sub-sector map
An analysis of information generated during the study shows that the camel milk sub-sector
has three main channels (see Figure 7). Channel 1 is for raw milk from pastoralist camel milk
producers direct or through intermediaries to rural households; Channel 2 is for raw milk
from pastoralist camel milk producers to low-end urban consumers, largely comprising
Somalis; and Channel 3 is for milk from quality conscious pastoralist camel milk producers
and ranchers (most in Laikipia District) processed by the Vital Camel Milk Limited for highend urban consumers in the local and international market. In addition to these three main
channels, there is also minor channel for other camel milk products (processed fermented
milk12, yoghurt, and cheese) processed by VCML for the high end urban market. This is an
extremely small channel handling no more than 0.2% of marketed milk from Isiolo District
and its environs and is therefore not given separate coverage.
5.2.1 Channel 1: Raw milk direct from farmer to rural consumers
Camel milk producers, have always supplied milk for consumption by neighbours and local
restaurants as the most efficient way to dispose of surpluses quickly and cost effectively for
payment or other form of value exchange. This is very similar to all other smallholder
producer systems in Kenya where the local market of households experiencing deficits and
local shopping centres constitute the avenue for commercialization of the otherwise generally
subsistence-oriented production systems. Due to long distances of camel herding zones from
the residential (manyatta) areas and shopping centres, some traders are also involved in this
channel, coming in largely in collecting milk from different producers and delivering it in
bulk to large volume consumers such as restaurants or retailing in small units (as little as
250ml) to households as per their needs.
Information from the key camel milk production clusters in Isiolo district suggests that this
channel currently handles between 20 – 30% of marketed milk from these clusters. Prices
paid by consumers depend on the region (milk-surplus/deficit area), but even more so the
micro-locality of milk available in the immediate neighbourhood. The agreed price will
depend on the balance of power between smallholder farmer and rural consumers, but will be
limited by rural households’ relatively low purchasing power.
12
A differentiation here is made on fermented milk processed from fresh milk and naturally fermented milk
which involves no deliberate processing efforts.
65
Rural households
High end urban
consumers
Low end urban consumers
(mainly Somalis)
Export
VCML
Retailers (170)
Eastleigh
VCML depot
20 in 7th street
25 in Jam street
5 in 12th street
Vital Camel Milk Limited, Nanyuki
•
•
•
Supermarke
ts (4
chains)
Transportation
Isiolo-Nairobi buses
Processing
(4 buses; 5,000 lit capacity/
day)
Bulking & Cold storage
Bulking and cooling hubs in Isiolo town
(7 hubs; 67 freezers; 8,000 lt capacity/day;
20,000 lts machine out of repair)
Production
Collection points e.g.
Kulamawe (200 lit/day)
Small-scale pastoralist camel keepers
(2,000 in Isiolo)
Approx. 5 with MVs
Assembly
Local Traders/
agents
(50)
Isiolo Traders (50)
Input Supply
R&D
(Capacity utilization: 3 – 8%)
Restaurants (10)
Rural Rest’nts
Eastleigh
Mini
markets
(8)
Milk receiving agents/
wholesalers in Eastleigh
Wholesaling
Retailing
Exporting
Market
Figure 7: Camel Milk Sub-sector Map (marketed milk from Isiolo and environs)
Medium & largescale camel
keepers
(50)
Small-scale
pastoralist camel
keepers in Laikipia
(500)
Ranchers in
Laikipia
Districts
(10)
Isiolo-based Agrovets (6)
KARI; ILRI; ENNDA; Egerton; KCA
CH1 (25%)
CH2 (70%)
CH3 (<5%)
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Information obtained during the study however suggests that prices in this channel are
competitive – comparable to farm-gate prices paid by other channels. In Kulamawe, for
instance, a 250ml unit was going for Ksh 5 (Ksh 20 per litre) which is the same amount paid
to farmers by traders taking the milk to Isiolo town. The main consideration to the farmer is
therefore not the price but whether this channel is able to take all the milk, all the time. In
most cases, it is not. Furthermore, from the production cost analysis done in Section 3.2, even
though the prices paid to farmers in this channel are comparable to prices paid under the other
channels, this price is not sufficient for farmers to break-even under the current low levels of
productivity and cost structures.
The vibrancy of this channel depends on what happens to rural incomes, rural population and
continued growth of milk supply in the particular areas – both of camel milk and other milk,
particularly cow milk. An analysis of current trends in this market suggests that this is likely
to be a growing channel given the increased acceptability of camel milk among nontraditional camel keepers and the general trend of reduced availability of cow milk,
particularly during dry seasons. From the generally low growth rates in rural incomes and
population, the prospects for significant growth are however limited. Although this channel
will continue to be important, it does not present immediate market-based facilitation
opportunities for meaningful expansion. As things are at the moment however, camel
producers are generally losing money in this channel and an important development
intervention must be increased productivity by farmers to enable them to, at least, break-even.
Given that the channel is currently not able to absorb all the milk produced and is offering
below break-even prices, farmers are likely to see no sense in investing in increased
production (from productivity) even when there is no market for what they are currently
producing and prices are low. Profitability for this channel is therefore tied to increased
expansion of the other channels to mop-up current supply and absorb increased production
from investments geared at improving productivity.
5.2.2 Channel 2: Raw milk through intermediaries to urban consumers
This is the largest channel under which raw milk from both small and large-scale camel
herders is handled by informal traders (almost 100% women) to urban consumers, largely
comprising the Somali community in Nairobi’s burgeoning Eastleigh estate (and business
hub). Most of the milk in this channel is supplied fresh to households and restaurants for
making tea although a substantial amount is also consumed directly as fresh or fermented
milk either as a refreshment, a health product by individuals with various ailments (diabetes,
stomach complications, etc), or as food for young children. This channel is currently
estimated to be handling about 70% of all marketed milk from the main camel milk
production clusters in Isiolo District.
For camel milk under this channel to reach the end consumer while still fresh per current
preferences, it requires a cold chain. This is however not entirely the case. Milk from
evening milking (normally done at around 6.00 pm) is combined with milk extracted in the
morning (put in separate containers) and trekked to collection points in the rural areas from
where it is transported through various means to Isiolo town, reaching there at between 12.00
pm – 6.00 pm depending on the source area. By this time, there is no transportation means to
Nairobi and the milk must be stored in the town for onward forwarding to Nairobi the
following day onboard Nairobi bound buses which depart at around 6.00 – 6.30 am. Of
necessity, this milk must be put under cold storage once it arrives in Isiolo town to the time it
leaves for Nairobi. As discussed in Section 3.4, an elaborate cold storage (and bulking)
business has developed in Isiolo town for this purpose. At the moment, there are only about
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7 cooling hubs in Isiolo town through which all milk destined for the Nairobi urban market
must go through. This is obviously one of the nodes of this channel and presents an excellent
leverage point for interventions, particularly those related to quality.
For distant milk production areas such as Kulamawe, milk is brought to collection points
from where it is transported to Isiolo. These are also important nodes in the chain. Although
no cooling is done at these collection points, there are strong indications that a cold storage
capacity for these points would significantly increase milk volumes from distant production
areas as it would allow producers to comfortably bring their milk to these points for overnight
storage for transportation to Isiolo the following day. Past attempts at this were however not
successful. In Kulamawe, for instance, VCML through BSMDP funding, supplied a 200 litre
capacity charcoal cooler to the group of women traders in the area (Kulamawe milk suppliers
self help group) in 2006. This has not been used, even a day. An analysis of the reasons
behind this lack of use under the obviously overwhelming need for the facility points at
issues related to farmer/trader organization and their interrelationship with the market
(VCML in this case). On the whole, these milk collection points emerge as also important
system nodes suitable as leverage points. Interventions must however be carefully designed
to take cognizance of all inherent issues within the value chain.
On the whole, an assessment of this channel shows that it is fairly efficient with fresh milk
(from as far as 450 km from Nairobi), delivered to consumers in Nairobi in two days at fairly
competitive prices of Ksh 80 per litre compared to farm-gate prices of Ksh 25 -30. Estimates
show that this channel (currently handling about 4,000 liters per day) is meeting only 20-25%
of current demand. It is therefore a channel that has significant potential for growth. An
analysis shows that the main reasons for this large demand-supply gap are related to the low
milk productivity at farmer level, logistical difficulties in milk assembly from farmers, and
capacity constraints in transportation of milk from Isiolo town.
Camel milk supplied under this channel can be generally characterized as of poor quality,
delivered to consumers under largely unhygienic trading conditions which many observers
(from outside the channel) could argue poses considerable health risks to consumers. It is
undisputed that some of the milk in this channel is produced by unhealthy camels (mastitis
disease, for instance), milking is done without adherence to good hygiene standards (washing
of udder, hands, milking container); milk is transported in plastic jerricans which cannot
provide high standards of cleanliness; and there are high chances of milk contamination
during transportation due to the unsuitable means used to ferry the milk from producer to the
market. It is also generally known that milk adulteration under this channel is common.
Three issues however continue to favour supply of low quality milk in this channel. The first
is the obvious excess demand for camel milk which makes traders and consumers tolerate
low quality, particularly in cases where they can glaringly sense adulteration. The second
relates to difficulties in testing milk quality. Outside a laboratory setup, there are no available
easy and reliable instruments/mechanisms for testing for adulteration and other quality
aspects of camel milk within the informal setup under which milk is traded. In the absence of
this, players can only sense that the milk is of low quality but cannot prove it. The third issue
is tied to a cultural belief among traditional camel milk consumers that camel milk has
medicinal properties that make it unlikely to suffer health-related quality deterioration even
when not properly handled. On the whole, this appears to be the main force fueling continued
supply and tolerance with low quality. This is however an issue that must be dealt with if this
channel is to be expected to expand significantly beyond the generally low-end consumers,
even among the Somali community. Sooner rather than much later, it is also highly likely that
68
the Dairy Board will enforce high quality standards once the Bill seeking to include camel
milk under the law that governs food-safety standards in milk trade is passed into law.
On the whole, this is the channel that presents the highest prospects for impact in the
immediate to short-term (1 – 3 years). Interventions geared at streamlining the supply chain
to improve efficiencies; increased productivity at the farmer level; and mechanisms for
improved milk quality throughout the chain appear to be manageable within the short-term.
In all these, mechanisms for ensuring the flow of higher volumes of milk must constitute the
central pillar for profitability and impact in this channel.
5.2.3 Channel 3: Pasteurized milk to high-end urban health market
The third channel represents pasteurized, high quality camel milk from quality conscious
small and large-scale producers largely in Laikipia District processed by Vital Camel Milk
Limited based in Nanyuki for high-end urban consumers in Kenya and internationally.
Although this channel currently accounts for only about 5% of marketed camel milk from
Isiolo and its environs, it represents the highest potential for growth and impact. Driven by
the increased international recognition of camel milk as a natural health product in treatment
of diabetes and a number of other ailments, the potential demand for camel milk for this
market segment nationally and, even more so, internationally is estimated to be enormous,
beyond Kenya’s current camel milk producible capacity of over 300 million litres.
Analysis done in Section 3.5 however shows that this channel is currently operating far below
the break-even threshold and is delivering milk to urban consumers at a price of Ksh 240 per
litre - 3 times higher than prices in the informal market (Channel 2). This is a major limiting
factor to expansion of this channel and must constitute the starting point in the search for
appropriate mechanisms for growing this channel.
Although this channel is currently the smallest and presents significant challenges in turning
around the low profitability (actually, losses) in the channel, it presents the best prospects for
Kenya to fully utilize the potential of the camel milk sub-sector. The potential market
demand for camel milk under this channel is enormous. Authoritative estimates put the
potential national demand for this market segment anywhere between 50,000 and 150,000
litres per day – approximately an annual demand of 18 – 55 million litres or 5 – 16% of
national production. This market segment is however poorly developed and there is a
significant mix between customers seeking camel milk for its health qualities with those
valuing the milk from a food perspective (and substitute to cow milk). This market segment
is therefore still significantly price sensitive and requires continued efforts for it to be
developed to levels where it can be relied upon to take meaningful quantities of camel milk in
relation to national production.
At the international level, while there are no reliable estimates of demand under this market
segment, rough guesstimates put the annual demand at over 300 million litres (FAO).
Although this represents potential demand (which is not necessarily current demand), VCML
has made significant efforts to penetrate this market and attests that current market demand
far exceeds current supply and, by and large, the market can take as much camel milk as can
be supplied provided it meets required quality standards and regulatory hurdles in some
markets (such as the EU) are cleared. VCML has supplied milk to this market segment in
South Africa, the USA (California) and even as far as Chile in Southern America. The current
issue is therefore not whether there is sufficient demand, but rather, whether the supply can
guarantee required quality standards, volumes and consistency.
69
On the whole, this is the channel that holds the highest potential for driving growth of the
camel milk industry in Kenya (and globally) and sufficient efforts must be put towards
addressing issues in this channel. It provides significant scope not just for absorbing a large
volumes of current production but also presents camel milk as a high value commodity whose
returns should be sufficient to justify investment of the enormous resources (and efforts)
required to overcome current supply constraints to meet volume and quality standards
demanded by the market. It would also push camel milk production to the required good
animal husbandry practices which are not only important for addressing demand in the other
(less stringent) channels but which are also important for meeting food security needs of the
pastoral community.
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6
SUB-SECTOR DYNAMICS
6.1 Overview
This section moves towards conclusion of discussions on the camel milk value chain by
exploring the various factors shaping the current state of the sub-sector and its likely
trajectory in the coming years. It reviews the forces driving current developments and
narrows down to emerging nodes in the value chain which can be targeted for leveraged
interventions geared at increasing competitiveness of the sub-sector.
6.2 Driving Forces
Driving forces refer to those factors that are at the root of sub-sector dynamics – the positive
or negative changes taking place within the sub-sector which are responsible for contraction,
stagnation or expansion of various channels. These factors often relate to market demand,
technological change, and barriers to market entry, input supply, and profitability level of
different markets or product niches, risks or policies. The study identified the following seven
main driving forces in the camel milk sub-sector:
6.2.1 Cultural attachment of traditional camel keepers to camel milk
Camels have been part of the cultures, practices and ways of life of the Somali, Rendile,
Gabbra and Turkana communities for centuries and camel milk is deeply entrenched within
their consumption preferences with strong underlying traditional beliefs. Particularly among
the Somali, these beliefs place camel milk as a superior product that has high nutritional and
medicinal values giving it a premium over other milks and encouraging its consumption.
This cultural attachment of camel milk among traditional camel keepers especially the Somali
is what is behind the growth of the raw camel milk channels, and seems set to continue
holding ground into the foreseeable future. Continued growth of the Somali community in
urban areas in Kenya and internationally partly fuelled by continuing out-migration of
Somalis from Somalia seems set to continue providing a firm demand base for raw camel
milk into urban areas.
Given the relatively small proportion of the Somali community (and other traditional
consumers of milk) in Kenya and internationally, it is however clear that the full potential of
the camel milk sub-sector cannot be exploited by targeting this market segment only. These
initiatives will need to build on the positive cultural/traditional factors that have deeply
entrenched camel milk among the Somalis while carefully riding away from negative cultural
entrappings (such as disregard for hygiene) that act as a put-off towards acceptance of camel
milk by other communities.
6.2.2 Rapidly expanding health market
The health market has been rapidly growing internationally with increasing number of people
becoming conscious of the benefits of achieving good health through consumption of foods
with known medicinal properties. Globally, this is generally the segment of the population
with high disposable incomes and when this is coupled with the fact that foods entering this
market can be considered as substitutes to medicine makes such foods become high value
commodities. In recent years, camel milk has become recognized as a health food and in
71
some parts of the world doctors are even prescribing camel milk to patients with various
ailments (see Text Box 1). This is the major driving force in the emergence of a global
industry for camel milk and a diversified range of other camel milk products. Whereas the
unmet demand in this market is enormous and prices are good, it is a market that is highly
sensitive to quality standards and consistency in supply. Unless these basic requirements are
met, penetration into this market will be impossible and penalties for non compliance will be
huge, even likely to lead to collapse of the channels supplying to the market. In Kenya, this
is the market segment that holds the highest promise for the camel milk industry but it also
poses tremendous challenges for development. This is however the force that the industry
must ride on in expanding the market outlet for the product, both locally and to the
international market. Research to authenticate the medicinal value of camel milk is a basic
component on which this driving force is riding on and efforts must be made to tap into
already ongoing research or participate in generating new information.
6.2.3
Effects of drought on increased acceptability of camels and camel milk
The global climate change that has seen increased droughts in Kenya (and other parts of the
world) have been a key element driving increased acceptability of camels among non
traditional camel keepers. In Kenya, camels are now kept by the Maasai, Borana, Samburu,
Pokot and are getting introduced among many other communities, including commercial
ranches. Among traditional camel keepers, the decimation of other livestock during
prolonged droughts has also proved the handiness and resilience of camels and is fuelling
significant shifts in herd structures in favour of camels. This continuing spread of camels in
Kenya and the availability of camel milk during drought periods when other milks are
unavailable has led to a growing trend in acceptability of camel milk among non traditional
consumers of the commodity. This trend appears set to continue, promising to fuel increased
supply of camel milk as well as building the demand beyond traditional consumers.
One important aspect of the spread of camel keeping among other communities is the
emergence of a production base keen on adhering to quality and productivity issues. There is
information to show that some of the communities that have adopted camel keeping lately
have entered into it without some of the traditional hang-ups that have made it difficult for
traditional camel keepers on issues of quality. Quality milk to VCML coming from the
Maasai and Samburus in Lakipia is an example. This also applies to camel keeping among
ranchers. The importance of this phenomenon is that it is setting a strong demonstrator effect
that with good husbandry practices, it is possible to achieve required quality and productivity
standards. This is a message that must be built on and passed on to all camel milk producers.
6.2.4 Involvement of wealthy traders in Isiolo in camel milk sub-sector
Within Isiolo, the involvement of a small but significant number of wealthy traders into the
camel milk sub-sector seems to be a significant driving force in the commercialization of the
young industry. Estimated to number around 50, this group of mostly traditional camel
keepers from the Somali community have seen the business opportunity of the camel milk
industry and increased their participation in production (now accounting for 25% of the
district camel herd) and are investing in areas that address some of the key constraints in the
value chain - including milk transportation, cold storage and marketing13. This group of
medium and large scale producers is concentrated in Isiolo town and hold significant
13
There is information that a significant number of the women involved in milk storage and cold storage in
Isiolo town are related to the medium and large scale camel keepers.
72
influence on the direction other producers take. One of these includes a growing trend
towards maintaining lactating herd within easy reach of Isiolo town which has picked up
among many camel milk producers. Information also suggests that it is because of the
influence of this group that efforts towards building a firm camel milk supply base for VCML
in Isiolo did not go well. The influence of this group in the past development of the sector
and its current status has been a major driving force and seems likely to hold into the
foreseeable future.
6.2.5 Facilitative infrastructural development
The availability of electricity within Isiolo town and all weather tarmac road from Isiolo town
(to Nairobi) appear to have been an important force that has shaped the current status of the
sub-sector. The availability of these infrastructural facilities within Isiolo town have
contributed to the growth of the town as an important hub while the lack of these faculties in
other regions of the district have acted as a disincentive. With the already commenced
construction of Isiolo-Marsabit road this seems likely to open up other parts of the District
and beyond (Marsabit) and so would the spread of other infrastructural developments.
6.2.6 The entry of VCML
Although the Vital Camel Milk Limited is currently not sourcing any milk from Isiolo district
and is handling milk volumes that may appear to be insignificant to influence developments
in the sub-sector, there is clear information that the entry of the company has greatly shaped
the current status of the sub-sector. The areas of influence include in pricing (before entry,
prices were much less); quality standards, and the penetration of camel milk to the high-end
health segment, locally and internationally.
6.2.7 Availability of an acceptable milk payment system
Transactions in milk sales have depended on a payment system built on trust where, with no
written agreements, milk is put in a bus with instructions on who to collect it and payments
are made in the same way. Although this system of payment has been abused on a few
occasions, it has remained largely reliable, driving growth in transactions. With the
introduction and growing acceptability of mobile phone money transfer technologies as well
as increased presence of financial institutions (including Da’abshir), the continued
availability of a supportive payment system seems set to support increased vibrancy in the
sub-sector.
6.3 Points of Leverage
A leverage point within the context of sub-sectors refers to a system node where a small
number of one category of players interacts with a large number of other players in the subsector. These points therefore become easy entry points through which interventions that
influence the entire value chain can be made. The study identified the following geographical
and policy related potential leverage points:
6.3.1 Geographical
The camel milk value chain has at least 10 geographical clusters.
6.3.1.1 Production clusters
(a) Central Division
Central Division has the highest concentration of camel population in Isiolo and is
currently estimated to be contributing to more than three quarters of the camel milk
reaching Isiolo town. Although camels are extremely mobile, there are clearly identifiable
73
milk production enclaves within the Division where interventions geared at streamlining
the supply chain at production level can be focused on. Of clear significance is the
massive Isiolo Holding ground with well established water, animal healthcare and pasture
facilities capable of holding the entire district’s lactating herd for a whole year. This
resource is however currently poorly exploited and most of the facilities are out of use. Its
potential is however enormous and presents a clear point of leverage at the production
level.
(b) Kulamawe Cluster
This is the second largest production cluster in Isiolo district, but its potential is greatly
underutilized largely due to distance, disorganization of players (particularly producers)
and lack of supportive facilities. This is the other production cluster (after Central
Division) where well designed targeted interventions could lead the way to widespread
adoption and replication across Isiolo and other camel milk producing parts of the
country. Though not sufficiently explored during the study, one aspect of developing this
cluster may be to explore the possibilities using the Maua-Meru (tarmac) route in delivery
of milk from this cluster to the Nairobi Market once volumes increase.
(c) Concentration of medium and large-scale producers in Isiolo town
The concentration of medium and large scale producers within Isiolo town sets Isiolo
town as an important point at which interactions with this category of producers can be
made. Although this category of producers may not constitute a main part of the target
group (of the poor) for development programs, it constitutes an important segment of
producers with significant sway in the sub-sector, capable of influencing desired changes
among many of the small scale producers who constitute the primary target group.
(d) Laikipia production clusters
Although Laikipia district was not part of the areas of focus of the study, it has emerged
that the district has a significant number of smallholder camel milk producers. Important
production clusters include Rumuruti, Dol Dol, Kamanju areas. There is strong
information that farmers in these areas have shown significant willingness and capacity to
adopt good husbandry practices for high productivity and quality of camel milk. A
number of farmers from these clusters are also currently supplying milk to VCML. These
clusters therefore present an excellent leverage point outside the predominantly traditional
camel milk production clusters of Isiolo District from which important comparative
lessons can be drawn
(e) Ranchers
Just like the medium and large scale camel producers in Isiolo, Ranchers do not constitute
the primary target group for pro-poor development initiatives. Within a value chain
perspective, however, they could act as an important point of leverage for certain types of
interventions. From our assessment, camel keeping Ranchers in Laikipia District have the
potential of constituting important points for learning and breed improvement type of
interventions.
6.3.1.2 Other important nodes
(a) Isiolo cooling hubs
The Isiolo cooling hub comprising 7 identifiable points constitute an important system
node. All milk destined for the Nairobi market must pass through these cooling hubs.
74
These are potential interventions points for initiatives targeted at improved milk quality,
handling and even packaging and processing. It is also an excellent intervention point for
information related initiatives.
(b) Kulamawe milk collection point
Milk collection points are also important system nodes in the milk value chain. The
Kulamawe collection point/centre is of particular importance given the already significant
milk production capacity of the area, the existence of an already organized traders group
and availability of a disused charcoal cooler with a 200 litre capacity. Besides Kulamawe
as a production cluster, the collection point at Kulamawe also presents itself as an
important system node for the sub-sector.
.
(c) Isiolo transporters
Four buses are involved in milk transportation from Isiolo to Nairobi. These are easy to
find and have organized management structures for any interactions. Initiatives targeted at
discussing issues related to current transportation arrangements should therefore be easy
to arrange.
(d) Eastleigh milk market
All milk entering the national urban market in Kenya goes through Eastleigh. Within
Eastleigh, milk is traded at three points – 7th street, 12th street and Jam street. For the raw
milk market, this is the end-market system node from where leveraged interventions
could be felt in the entire value chain.
(e) VCML
VCML is a key player in the pasteurized camel milk channel and stands out as an
important leverage point for leveraging efforts aimed at influencing this channel.
6.3.2 Policy and regulations
At the policy and regulatory environment level, the study has identified four critical leverage
points:
6.3.2.1 Entry of camel milk into the dairy industry regulation
There is a draft Bill under the Dairy Board that seeks to include camel milk (along with
buffalo, goat and sheep milk) under the law that regulates production and trade in dairy
products. This law is expected to have far reaching effects on operations of the camel milk
sub-sector. Currently, camel milk falls outside the regulatory arm of the Dairy Board and this
is the main reason why certain minimum standards (especially on food safety) are not
enforced. Once the draft Bill comes into law, players in the camel milk industry will have to
adhere to the regulations. It is important that the Bill takes into account current
circumstances of the industry and the new law is enacted in a form that is supportive to
development of the sub-sector. Starting from the current preparations for regulation of the
sub-sector, to the implementation of the regulations once the law comes into force, the Kenya
Dairy Board is an important leverage point for the sub-sector. .
6.3.2.2 Policy recognition of camel sub-sector in development
From estimates generated under this study, the camel milk sub-sector is a Ksh 8 billion
industry whose potential in spearheading development and growth in incomes among arid
and semi arid lands need to be given due policy recognition and supported accordingly. The
75
Ministry of Livestock Development (MoLD) currently housing the Kenya Camel Association
has already made the first steps in recognizing the importance of camels. More is however
required and MoLD is the leverage point for this. KCA as the main advocacy body on issues
of camel sector development is also an important institutional leverage point.
6.3.2.3 Quality standards
The setting of appropriate quality standards acceptable internationally and their enforcement
in the camel milk industry are essential if Kenya is to be expected to exploit its potential in
this industry. The Kenya Bureau of Standards and an internationally accepted Competent
Authority in quality inspections are therefore important regulatory leverage points for
interventions targeted at increased acceptance of camel milk in the market, both locally and
internationally.
6.3.2.4 Research
Globally, the commercial camel milk sub-sector is a relatively new industry. A lot is still not
known and research is required on issues related to production (breeds, healthcare, feeds);
processing (products, technologies etc); and properties of the milk per market needs
(treatment of diseases etc), among many other areas. ILRI, KARI and Egerton University
appear to be the institutions spearheading research (sometimes working as a consortium) and
therefore form an important leverage point for the sub-sector.
76
7
KEY CONSTRAINTS AND
OPPORTUNITIES
7.1 Overview
Estimates made in Section 2 unequivocably show that the camel milk sub-sector is big with
current production level estimated to be worth Ksh 8 billion at the farmer level. The value
chain analysis made in Section 3 has however clearly shown that only a small proportion of
this potential is exploited and, indeed, the core players in the value chain, the farmers, are not
making money. The reasons are many and varied and most have been highlighted in passing
in earlier sections. This section concludes discussions of the camel milk value chain by
focusing its attention on analysis of the key constraints holding back the full realization of the
sub-sector’s potential, current opportunities within the value chain, and an analysis of the
type of interventions that could increase growth and competitiveness of the value chain.
7.2 Major Constraints
The constraints facing the camel milk sub-sector can be conventionally put into four broad
categories based on the value chain functional area they are mainly manifested in –
production; product assembly and distribution; processing and value addition; and marketing.
From a value chain perspective where emphasis is put on the interconnectedness of actors in
all segments of the value chain, it is however realized that issues at one segment of the value
chain are manifested in other segments and are therefore issues of the entire value chain. To
emphasize this value chain view of issues, we discuss the key constraints facing the camel
milk value chain without necessary grouping them into the conventional functional areas
mainly because of their cross-cutting nature. We however highlight which areas they are
affecting and the pivot points from where they should be addressed.
While there are many constraints facing the camel milk sub-sector, the key ones can broadly
be said to be six. These are low milk productivity; low milk quality; poor organization of
actors; inadequate support infrastructure; and poor market development.
7.2.1 Low milk productivity
The analysis of the production value chain presented in Section 3.2 has shown that at
prevailing cost structures, the current average level of milk production per camel among most
producers is not sufficient for them to cover their costs and, indeed, the majority of them are
(unknowingly) actually making losses. This low milk productivity combines with other
factors in the supply chain to make the volume of milk marketed under all channels to be
inadequate for other players in the value chain to make meaningful profits. Milk productivity
is therefore seen as a central constraint that must be dealt with for the entire value chain to
expand and become truly profitable at all levels.
Just like in all other dairy animals, milk productivity in camels is a function of the genetic
potential of the animal (breed), health and nutrition status, and milking practices. Our
analysis shows that these are the issues contributing to low milk productivity in the camel
milk sub-sector. While all these are important and each must be addressed if the full
potential of the sub-sector is to be realized, an overall assessment shows that the bottom-line
77
culprit is currently poor milking practices. The majority of camels in Isiolo district are of the
Somali breed and although there has been significant in-breeding, there are strong indications
that the current breed of camels are genetically capable of producing much higher volumes of
milk than is currently happening. Nutrition and health care are important and assessment of
current husbandry practices among camel keepers (large and small) shows that this also an
area that is wanting. Even at current practices, however, the camels can produce much higher
volumes of milk than they are currently doing. Most farmers are in general not extracting all
the milk from their camels and this stands as the main reason for the low milk yield.
The reason behind this is a combination of factors most of them touching on market access,
prices and availability of labour for milking. To search for pastures and water, most camel
herds are found significant distances from the market or milk collection routes and this makes
it difficult for the herders to milk and trek the milk to the collection points in time. Ideal
hand-milking of camels also requires two persons to do it simultaneously, and for the full
milk potential of the camel to be attained, frequent milking in a day is required. This requires
significant labour which is not available as the current deployment of herders among
pastoralists is normally done with only herding in mind and is generally stretched given that
labour is currently the highest cost in herding. Management of the lactating camel herd in a
way that milking can be done to the full potential therefore seems to be the most immediate
way through which higher milk productivity can be achieved. Discussions with key
stakeholders in the camel milk sub-sector shows that most market oriented camel keepers
have already realized this and a trend of keeping lactating camels near Isiolo town or near
milk collection points has already began. This is what needs to be built on and nurtured. It
will however, not be enough to keep the camels near markets, mechanisms for ensuring fullmilking practices are entrenched must also be made just as it will be important to address
health and nutrition issues in the immediate and short-term. In the medium and longer-term,
development of high milk yielding breeds will also be important if the sub-sector’s potential
is to be realized.
This is the path that the cow milk dairy industry has taken, and although some stakeholders
feel that it is not achievable or even desirable for the camel dairy, the trend has already began
and some basic momentum seems to be building up. In some countries such as UAE and
other parts of the Middle East, zero-grazing of camels is already becoming a normal practice
and the difference in yields and incomes is clear. Ranchers in Nanyuki are already keeping
camels on somewhat sedentary pasturing arrangements. This is to some extent also
happening in Isiolo and the main problem becomes availability of pastures. The Ewasso
Ng’iro North Development Authority has developed a Camel Centre where it is trying out the
concept of supplementary feeding of camels (and to some extent, zero grazing)14. In our
view, this is where things need to be picked from and advanced towards a direction where, at
least, the need for supplementary feeding of lactating camels stationed near market points can
be addressed. It is a direction which seems inevitable if the camel milk industry is to be
expected to attain its potential of driving growth in household incomes not only among
pastoral communities of Isiolo and other northern districts, but also among the many
communities in the southern rangelands who are adopting camel keeping as a beacon of hope
under the increasingly harsher climatic conditions.
14
The KARI Range Management Research Centre in Marsabit, and animal multiplication station Nasukuta,
West Pokot may also be involved in research towards this direction.
78
7.2.2 Low milk quality
Poor milk quality cuts across the entire value chain, starting from production all the way to
the time milk is sold to consumers in the raw milk channels. Information obtained during this
study confirms findings of other studies which have identified seven main points in the value
chain where camel milk quality is affected (see Table 7.1). From an analysis of the ways
through which the quality of milk is affected points at the following six factors as the ones
behind the poor quality of milk: poor husbandry practices; low adherence to quality standards
(including deliberate adulteration) due to lack of enforcement of standards; unavailability of
appropriate (dedicated) transportation means for milk; and low levels of awareness of the
importance of quality standards in camel milk by suppliers (producers and traders) as well as
consumers.
Table 7.1
Value chain points where camel milk quality is affected
Point in value chain
Milk quality and hygiene factor
Lactating camel
• Unclean udder, subclinical mastitis, zoonotic infections with
lactogen transmission
Milking
• Unclean hands; poor personal hygiene and health status; unclean
(plastic) milking containers; unclean milking site; lack of clean
water; poor practices in washing camel udder before milking;
Milk handling at farm level
• Unclean (plastic) container; pooling of fresh (morning) and old
(evening) milk
Milk assembly/collection
• Unclean (plastic) container; pooling of milk from different
producers; high environmental temperatures during intermediate
storage; adding unclean water
Transportation
• Delayed transport; prolonged exposure to high environmental
temperatures; contamination through mixing with all manner of
other luggage (livestock, charcoal etc)
Bulking point
• Unclean (plastic) containers, pooling of milk from different
traders/producers; power outages leading to deterioration of milk;
milk adulteration (adding of unclean water).
Wholesale and retail trading
• Exposure to high environmental temperatures; selling from open
containers; adding of unclean water; unhygienic trading
environment.
Consumer
• Traditional consumption of raw milk; traditional belief that camel
milk cannot be unclean; tolerance to low quality milk due to
excess demand.
Source: Farah Z. et al; MoLD; RMC/SNV Camel Milk VCA, Sept/Oct, 2008
Milk quality is central to expansion of the current milk market and must therefore constitute
an important element of efforts made towards better exploitation of the sub-sector’s potential.
Successful interventions must however focus on the supply and demand side as well as policy
and regulatory aspects related to setting of acceptable standards and their enforcement.
7.2.3 Poor organization of players
All primary actors in the camel milk industry can be regarded small-scale operators from the
volume of produce they are handling as individuals – be they producers or traders. For the
value chain to be competitive and profitable, operators must act together particularly on all
issues related to market access and penetration. The study revealed that producers and traders
are, by and large, not organized and where some groupings exist, they are generally weak.
Poor standards in animal husbandry and the costly product assembly process are largely
attributable to poor organization of producers. This also applies to other segments of the
value chain and, indeed, the entire chain as a whole. There have however been attempts in the
past of bringing together players in the sub-sector for joint action and, indeed, this is perhaps
79
what is responsible for some of the positive developments that have led to increased
commercialization of the sub-sector. Our view is however that the sub-sector seems to be still
operating without a coherent joint vision and strategy for development. This must constitute
the starting point for any meaningful development of the sub-sector and our view is that the
analyses made under this study provides a good basis for starting discussions geared at
building consensus among players on the importance of working together for their common
good.
7.2.4 Poor business orientation of producers
Just like most other smallholder farmers in Kenya, camel milk producers in the pastoral
system operate without the basic business orientation that is necessary to make camel milk a
profitable enterprise. Although this varies from community to community, with the Somalis
regarded as the most business oriented, in general, most farmers are operating without due
consideration of all the costs they incur and how to make a positive return. This is an
important mindset that must be coupled by effective business oriented management practices
for the production activity to be profitable at the individual level and for the value chain as a
whole.
7.2.5 Underdeveloped support infrastructure
The entire camel milk value chain can be characterized as one with a poorly developed
physical and institutional support infrastructure. Poor road network within the districts; lack
of electricity (particularly in the interior collection points where cold storage is required);
insufficient water supply for the animals as well as to support hygienic milking are some of
the physical infrastructure constraints that clearly stand on the way and must be dealt with for
the full potential of the camel milk sub-sector to be realized. While this is a general
development problem that deserves attention, its gravity and urgency take a different angle
when the size of the camel milk sub-sector is put on the same scale with other sub-sectors in
Kenya which are accorded higher attention and specific efforts put towards dealing with
impeding factors including infrastructural issues. Just like tea, coffee and horticulture are
important in Central Kenya; Sugar and Fish important in Western; tourism and coconut
important in Coast; (and so on), so is the camel milk sub-sector in the North and, therefore,
efforts towards dealing with infrastructural impediments to exploitation of this economic
potential must be fast-tracked as they are in the other sectors in the country.
Besides physical infrastructure, an inadequate institutional infrastructure (both public and
private sector), also stand out as key constraints to the development of the camel milk
industry. Key missing or inadequately developed institutional infrastructure include:
availability of quality extension services; business development services; financial services;
transportation services and, very critical, security infrastructure. Some of these are areas that
can only be effectively dealt by the government, but there are many where the private sector
can fill the gaps.
7.2.6 Poor market development
The market for camel milk is currently largely limited to consumers from traditional camel
keeping communities. Although this market is not even adequately served by current supply,
it is clear that substantial exploitation of the potential of the sub-sector cannot be achieved
without expanding the market beyond this narrow segment of consumers. Estimates suggest
that the potential local and international market is enormous particularly in the health
segment. Efforts for developing this market are therefore required.
80
7.3 Key Opportunities
Information generated during the study reveals that the camel milk sub-sector has many
opportunities for private and public sector interventions. We discuss five of the major ones
here:
7.3.1 Large unmet demand and significant potential for market expansion
Estimates suggest that the current demand in the urban market for raw milk (in Eastleigh) is
at least four times higher than current supply. The current market can take up to 20,000 litres
of raw milk per day even under current quality standards and cost structures. At current
prices, this is a business worth Ksh 1.6 million per day – or Ksh 0.6 billion in a year. The
potential for growing this business several times over in the medium term seems realistic.
Overall, with proper market development strategies, camel milk from Kenya can effectively
penetrate the international health market which would make camel milk a high value
commodity with sufficiently high returns to players to justify the enormous investment
resources required to get the sub-sector up and running. The private sector that enters into the
market now and invests strategically, stands to reap significant returns, not just in the longterm but even in the short and medium term. This also applies to social investors interested in
improved livelihoods of producers and other low income players in the value chain.
Improvements in livelihoods can be achieved even in the short and medium terms and
complete transformation be achieved in the longer term.
7.3.2 Enormous potential for increased supply
The potential for achieving significant increases in supply of camel milk in the short term is
enormous. Already, many farmers are merely not extracting the milk because of market
accessibility and organizational issues. A long gestation period of getting large volumes of
milk flowing in the value chain is therefore not required. A significant herd size of a fairly
good genetic milk production potential already exists. Farmers are also already starting to
organize their herd management practices to orient production towards market requirements,
particularly in relation to keeping the lactating herd near market or milk collection points.
With efforts towards building on this trend and better organization of producers, significant
milk volumes can be achieved in the immediate to short-term. In the medium and longer
term, it is also clear what is required to increase the volumes of milk supply and all
indications show that this should be achievable. Even exploiting a modest 20% of the
production potential would mean Ksh 2 billion annually to producers and more than Ksh 3
billion to other players in the value chain even at current farm-gate and retail prices in the
local market.
7.3.3 Existence of clear system nodes
As discussed in Section 6, the camel milk sub-sector has already evolved to a level where it
has clear system nodes where targeted interventions can leverage growth in the whole value
chain. These exist throughout the value chain. At production level, the two milk production
clusters of Central Division and Kulamawe already present excellent intervention points on
production issues. Other important system nodes include the Isiolo bulking and cooling hub
and the Eastleigh market which are already handling at least 4 tonnes of milk on a daily basis.
7.3.4 Emerging trends in commercialization
Although camel milk cannot yet be regarded as a ‘money minting’ enterprise, it has already
proved itself to be a profitable business with significant potential for immense profitability.
Some farmers have realized this and so have other players in the sub-sector. From this
realization, traditional ways of doing things are already changing to take a business and
81
market orientation. One of the notable trends at the production level is the increasing trend
towards maintaining lactating herds near Isiolo town. This trend is however currently
countered by the unavailability of sufficient pastures in the areas on a year round perspective.
The Isiolo Holding Ground with a capacity of holding at least 11,000 camels at the worst of
years, five boreholes and animal health facilities presents an excellent opportunity for making
the desire to keep lactating herds near Isiolo town on a year-round basis a reality. The current
management of this facility would however need to be significantly improved to make it
reliable in provision of pastures, water, and health services.
The increasing market orientation of producers, even in changing their traditional herding
practices, is a good indicator that, so long as there are clear market incentives, producers and
other players could change their ways of operation to respond to market needs. Increased
productivity, supply consistency (especially timing) and adherence to quality standards are all
areas that can be achieved with the right market incentives.
7.3.5 Forthcoming dairy sector law to regulate camel milk
Although the inclusion of camel milk in the pending Bill on regulation of the dairy industry
in Kenya can be seen as threat to the informal trade in camel milk, it can also be seen as a
significant opportunity for the sub-sector to move towards adoption of the requisite
production and milk handling standards which are essential for growth in the sub-sector. The
first most likely area where the new law will affect is the unhygienic milk trading
environment of Eastleigh and the obvious milk adulteration that takes place in the sub-sector.
That this law is still at its drawing stages presents two important opportunities. The first is
for the traders to start re-aligning themselves to the obviously higher food safety standards
which will be expected of them. This is already happening in the cow milk dairy industry,
even within Eastleigh where there are numerous dairies and milk bars with significant levels
of cleanliness. This is also happening in other sub-sectors such as fruits (cluster near Nairobi
Hospital; South B Kiosks etc). The other opportunity is for stakeholders in the camel milk
industry to help in shaping the new law to ensure it is enacted in a form that is supportive to
the growth of the sub-sector.
7.4 Potential Interventions
From our discussions of the key constraints and opportunities in the camel milk sub-sector,
we have highlighted various interventions for the private sector as well as development
agencies including the government. In essence, the key constraints and opportunities define
the broad areas for intervention. Using this broad framework for interventions we provide a
summary listing of some of the key specific interventions that appear to be of high priority.
7.4.1
(i)
(ii)
(iii)
Possible interventions for increased milk productivity
Farmer awareness and education on the business sense of increased productivity.
This should be packaged within the framework of turning camel milk production
into a profitable business which could cover productivity as one of the essential
components along with others, such as herd structures.
Establishment of strong farmer organizations for joint action in market access to
justify investments towards increased production.
Support for increased capacity of the Isiolo Holding Ground as a facility that can
nurture and entrench current trend of producers to maintain lactating herds within
easy reach of the market.
82
(iv)
Support for increased availability of camel milk business development service
providers able to advise farmers not only on husbandry issues but also on business
practices, market access and farmer organization.
7.4.2 Increased availability of quality camel milk
(i)
Facilitate investment in better workspace for traders in the Eastleigh camel milk
market. In liaison with the City Council, identify interested investors (private
sector or otherwise) to develop clean and high quality structures for handling
camel milk similar to the concept used in cow milk bars or the increasingly
popular fruit kiosks (such as those near Nairobi Hospital). A popular model used
is a private developer to invest in construction and lease to current operators.
(ii)
Support market-based awareness campaigns to stimulate demand for quality
camel milk among consumers.
(iii)
Facilitate development of simple and easy to use testing equipment for camel milk
quality.
(iv)
Support information dissemination and awareness campaigns on the need for high
quality standards in milk production and supply, and on ways of ensuring quality.
(v)
Facilitate acquisition of appropriate milk handling containers among producers
and other players in the value chain.
(vi)
Facilitate increased availability and utilization of a cold chain for camel milk
covering milk collection points, bulking centres and transportation.
(vii) Support mechanisms for setting of appropriate quality standards in camel milk and
their enforcement – both by players (self regulation) as well as by authorities.
(viii) Facilitate investment in basic packaging of camel milk for ease in quality
transportation and distribution to consumers.
(ix)
Support entry of commercial providers of suitable camel milk transport services
with sufficient capacity to handle available milk to the market.
7.4.3
(i)
(ii)
Interventions for increased market development
Facilitate development of a market development strategy for camel milk –
domestic and international markets
Support increased supply of quality milk for the pasteurized milk channel to
support private sector efforts for building a sustainable penetration to the
international market
7.4.4 Sector organization
(i)
Facilitate formulation of a joint vision and strategy for development of the camel
milk sub-sector.
(ii)
Support establishment and strengthening of stakeholder common interest groups
at production, product assembly and trading levels.
(iii)
Facilitate establishment and capacity development of a resource centre for
information on camels. This is in recognition of the rapidly building body
knowledge on issues related to camel both in Kenya and internationally generated
from research and other empirical works which currently remain scattered and
unorganized for effective utilization by stakeholders in the sector.
7.4.5 Increased visibility and recognition of the camel milk industry
(i)
Support stakeholder engagement with government to lobby for increased
recognition and support for the sub-sector.
83
(ii)
(iii)
Support selective publicity to raise visibility of camel milk sub-sector among
policy makers, development agencies and the general public.
Facilitate stakeholder support for increased resources for research and
development on issues related to the camel industry in Kenya. This should include
support for improved diffusion of research results into better practices in all
segments of the camel milk value chain.
84
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86
Appendices
Appendix 1:
Appendix 2:
Appendix 3:
List of persons and institutions interviewed
Study methodology and instruments
Study Terms of Reference
87
Appendix 1
List of persons/institutions interviewed during the study
Name Institution
Persons Interviewed
A. Government bodies and other development organizations
1
Ministry of Livestock
Development
Arid lands Resource
Management Project
ALLPRO Project
2.
3.
4.
5
6.
7.
KLMC - Nairobi
DLMC - Isiolo
KCA - Nrb
Netherlands Development
Organisation - SNV
Ewaso Nyiro Development
Authority – Isiolo Office
GTZ - Nrb
Kenya Bureau of Standards
(KEBS)
8.
1. Adan Ibrahim – Head- Isiolo
2. Ann Nyangwetta - Deputy
3. Daniel Mugi- Senior Livestock
Officer, also in-charge of Isiolo
Holding Ground
4. Frederick Aloo – Nrb Hqts
5. James Kariuki – DLMO - Isiolo
1. Mohamed Abbas
1. James Tendwa – Nat. Project
Cordinator
1. Abdi Kadir – Prog. officer
1. Ali Bido, Chairman
1. Abey Kalif
2. Josephine Wandaho
1. Charles Naimoi
2. Thomas Were
1. Sheik Omar
1. Wanjiku Guchu – Kimano
Manager, First Assurance Plaza,
Weslands, nairobi
1. Guyo Tuke
1
1. Holger Marbach - Director
2. John Oguk – Operations Man.
2.
Herders/ Milkers
0725 576924
0724 517691
0723 555145
0723 263869
0722 795254
0720 334362
0721 708963
1. Reimund Hoffman
1. Kabue
Business Services Market
Development program – now
under MESPT
9.
Food for the Hungry Marsabit
10. University of Nairobi
11. Egerton University
12. Farm Africa - Marsabit
13. Kenya Dairy Board - Nrb
B. Processors
Vital Camel Milk Limited,
Nanyuki
C. Producers
1
Producers
Contact Address
3746354/ 3746764
0729 215698
1. Gitao C. G
1. Peter Lumuga
1. Mr. Boru
1. Hassan Abdi Ali - Isiolo
2. Abdi Lahaman - Isiolo
3.Haji Abdi Aziz - Isiolo
4. Adano Mohammed - Kulamawe
5. Abdulilahi Boru - Kulamawe
6. Wario Kula – Kampi Garba
7. Hoko Ali - Shab
8. Adiro Abdillahi - Gambella
9. Hussein Haji - Isiolo
10. Abdirahman Abdille - Isiolo
1. Abdi Mohammed - Gombolio
2. Adeu Ali - Gombolio
3. Muhammed Hussein - Shab
4. Andrian Sheikh - Gambella
5. Shadrack Mung’athia - Gambella
6. Maingi Mwithira - Gambella
0720 926841
0728 606831
0722 485573
0720 444764
0721 835693
0723 630473
D. Service providers
1.
Inputs suppliers - Agrovets
2.
Transporters –( Isiolo to
Nairobi)
Garissa –( Bangale) – to
Nairobi
Kulamawe to Isiolo
Isiolo Central Division - to
Isiolo
From Farmers to Kulamawe
From Cooling Hubs to Bus
Stage – (Isiolo)
From Eastleigh Isiolo Bus
Stage to Jam Street
E. Traders
1.
Producer to Isiolo Market
2.
Isiolo to Nairobi Market
3.
Third Level - Nairobi
Traders
10.
Dairies – in Isiolo - ( with
freezers).
4.
Open Air Market Dairies – (
Kiosks)
Distributor – VCML Milk
1.Suleiman Osman- Adhi Chemicals
Shop – Isiolo
2. James Karani - Isiolo
3. Stella Muthoni – Elite Chemist - Isiolo
1. Shakur Abdi – Isiolo Bus Star
2. Omar Abdi Nur – Northern Horse
3. Abdi Kim – Isiolo Coach
4. Zacharia Kinyua – Bus Ways/ Bus Car
1.E – Coach Bus Co.
0723 442104
1. Ali Buda Guyo – Lorry Transporter
1. Haji Abdi Aziz – Land Cruiser
2. Abdullahi Jere – Land Rover
3. Julius Kamathi – Bicycle Trransporter
1. Hawa Racho – Donkey Transporter
1. Abdi Hussein – Wheelbarrow
Transporter
1. Omar – Hand Cart Transporter
Isiolo
Isiolo; 0721835693
1.
Kulamawe Milk Suppliers Women
Group
2. Muhammed Ali -Farmer
3. Halima Gaballe - Trader
1. ANOLEY – Women Group
2. Abdi Lahaman
3.Hussein Haji
4. Kamila Dayow
5. Haji Abdi Aziz
1. Halima Dube – Jam Street
2. Sahara Sharrif – Jam Street
3. Khadija Hassan – 7TH Street
4. Amina Yussuf – 12th Street
5. Farihio Mohammed – 12th Street –(
Namanga Milk)
Kulamawe – 0723
813794
Kashuru
Kashuru
Isiolo – 0724 673341
Isiolo - 7720444764
Isiolo
Isiolo
0721 835693
0725 747918
0724 449754
0724 681668
0721 362355
Nrb – Eastleigh
1. Doris Kathambi – Afya Milk Shop – (
cow milk only)
2. Liban Hotel/ Milk Supply Shop (
CAMEL AND COW MILK)
1. Asha Hussein –( Sells Camel and Cow
milk)
1. Kmau Wanjohi – VCML
EASTLEIGH DEPOT
0722 641045
1. Alice Njoki - Allah Karim Hotel –
12TH Street
2. Mohammed Hussein - Ainu Shamsi
Hotel – 1st Avenue
3. Karani Hotel – Eastleigh
1. Lucky Harsi – 12th Street
2. Nimo Hassan – Jam Street
3. Hamed Keynan
Nrb
0728 738227
0726 028848
Isiolo
Isiolo
Isiolo
Isiolo
Garissa
Kulamawe
Isiolo
Nairobi – Eastleigh
Market
Isiolo
0723 807639
0721 564252
F. Consumers
1.
2.
Consumers - Restaurants
Household/ Individual
Consumers
Nrb
Nrb
0726 829153
0734 603278
Nrb
2
Appendix 2
Study Methodology & Instruments
1. Key players/actors in the sub-sector targeted for interview/discussions
1.1 Direct actors
1.1.1 Input suppliers
- Drugs – Agro-vets?; salts
- What other inputs – any feed supplements/pastures; milking etc; water
1.1.2 Producers (how many production clusters on the ground)
- Small scale pastoralists – small herds
- Large scale pastoralists – large herds
- Ranchers - Chris Field; others
- Producer groups (e.g. SNV/DLMC groups in Kulamawe)
- Is there a producer association? – KLMC/DLMC?
1.1.3 Product assembly (bulking)
- Who does bulking at the local/village level – association or traders/agents?
- Is there a point of bulking – cooling storage/overnight storage?
1.1.4 Transporters
- Transporters to bulking points
- Transporters to distribution points (to Isiolo & Nanyuki)
- Transporters to end market (to Nairobi?)
1.1.5 Processors
- Vital Camel Milk Limited
- Ewaso Nyiro North Development Authority initiative
- Are there others? (KCA members?)
1.1.6 Distributors/wholesalers
- Who does wholesaling/ distributions – Isiolo; Nairobi
1.1.7 Retailers
- Rural markets (in Isiolo) – to households; restaurants; institutions
- Urban market – Nairobi; Isiolo; any other to focus on?
o Raw milk to urban households (Eastleigh) – women hawkers
o Supermarkets – Nakumatt; which others?
o Health market outlets – what are these?
o Any institutional markets?
o Industrial?
1.1.8 Exporters – what export markets do we have? Who are the exporters – same as the processor?
1.1.9 Consumers
- Urban market – Fresh/raw milk consumers; Sour milk consumers; High end consumers;
Health consumers? – do we talk to these directly or we assess through proxies (the
retailers who have direct conduct with the consumers?)
1.2 Other players
1.2.1 Policy/Regulators
- Ministry of Livestock - Ministry Level; District level – Isiolo/Nanyuki?; Division level how many Divisions do we go to? – Head of Range management; Director of Livestock
Production; Director of Veterinary Services (KCA?); ALLPRO (ADB financed project –
Mr. Tendwa)
- Who else? – Provincial administration (courtesy)
1.2.2 Service providers
- Veterinary services – private vets? Community animal health workers
- Extension services – animal husbandry (government; KCA; VCML)
- Any others?
- Any association?
3
1.2.3
1.2.4
1.2.5
Development agencies
- Ministry of North Eastern Province – World Bank financed project – ALRMP
- Ewaso Nyiro Development Authority?
- SNV
- GTZ
- BSMDP/MESPT
- USAID (ELMT) – CARE?
- Farm Africa
- Food for the Hungry
- Who else is important?
Research & development
- ILRI - Camels
- KARI - Head Quarters – camels
- KEBS
- KEPHIS?
Lobby groups/sector associations?
- Kenya Camel Association – KCA – Hill Plaza
- KLMC
- Association of Pastoralists
- Who else?
2. Interview Guide for various players
Actors/players/ Information
function
Source
1. Production/
producers
Sec: - GOK;
SNV?
GOK
1.1 Total number of producers – National; Isiolo; Clusters/Divisions within
Isiolo District; by herd scale (small, large, ranchers); gender
1.2 Total number of camels in Isiolo District – by herd scale; location/
cluster; are there variations in breeds?
- of these, how many are female, how many lactating
1.3 Estimated milk production – by category of producers & clusters
- Estimate from lactating camels; average production; triangulate
with secondary sources
1.4 The production chain:
- How do farmers acquire their camels; how much does it cost?
- Who does what & how much does it cost – grazing; watering;
milking; disease control; treatment etc
- What inputs are used – how much do they cost?
- On average how much does it cost to keep a female camel?
1.5 How much milk does a camel produce? - range
- What influences production?
- What is required to ensure optimal production?
- What efforts are being made to increase production (individual,
group, govt. others)
- What is average production per farmer – by category
- Seasonal variations – breakdown the year
1.6 How is the quality of milk produced?
- What influences milk quality?
- What proportion is husbandry & what is handling?
- What is required to improve quality?
- What efforts are being made?
Who
- Secondary
- Primary
-FGD with
producers;
- Triangulate
from lit; key
informants
- FGDs
- key
informants
- literature
FGDs
4
1.7 What happens to the milk that is produced?
- proportion consumed at home
- proportion sold
o Where, by who, for how much?
Identify all channels
Get farm-gate prices for different channels
Who are the players in each channel?
- Are these proportions by choice or forced by market
circumstances?
- Is any milk wasted? What contributes to this?
- What can be done to improve situation?
- What efforts are taking place?
- What is the average volume of milk sold per farmer – by
category
- What average earnings – by category
- Seasonal variations
1.8 What specific costs do farmers incur in producing milk
- Specific costs related to production – explicit & implicit
- What is the value added? (each component of production chain)
1.9 Overall, what are the key constraints facing farmers? – production;
marketing; others.
- What can be done to address them?
- What initiatives are taking place? By who? What results?
1.10 What opportunities exist in area for enhancing camel milk production?
- To what extent are these opportunities exploited?
- What is holding back utilization of opportunities?
- What needs to be done?
1.11 Farmer organization
- Any farmer organizations? – for what?
- Membership
- Strength/issues
1.12 Support institutions working with farmers -
2. Traders
2.1 What is the estimated number of traders at different levels for each of the
channels? How many categories can they be put in?
- Producers to local points of bulking
- Local bulking points to Isiolo
- Isiolo to Nairobi distribution point
- Nairobi distribution point to consumers – retail outlets
2.2 What is the estimated volume of milk handled by each category of
traders/
2.3 What specific roles/functions do these traders play
- Any grading?
- Bulking?
- Transportation?
- Cold storage?
- Processing?
2.4 What is the value added by traders?
- Purchase price – per category of traders
- Selling price
- What costs do they incur? (break down transport chain)
- What margins (average per litre)
2.5 How do traders interact with farmers?
- Direct to individuals farmers
- Through farmer organizations
- Agents
FGDs
FGDs
- FGDs
- Key
informants
- FGDs
-FGDs
- Key
informants
- FGDs
- Key
informants
FGDs
FGDs
FGDs
FGDs
5
2.6 What are the requirements of the market supplied by the various
categories of readers?
- Quality; volume; timing; consistency; pricing; packaging etc
- To what extent are traders currently meeting these market
requirements?
- What are the problem areas?
o Production – productivity; milking; handling etc
o Handling
o Storage
o Transportation
o Etc
2.7 What are the views of traders on production/marketing issues facing
farmers?
- Productivity? – volumes?
- Quality?
- Pricing?
- Organization?
2.8 Overall, what are the key constraints/challenges facing the camel milk
value chain – in the views of traders? – at what level/
- How should these be addressed?
- What are the traders doing anything to address these?
What other initiatives are taking place?
3. Transporters
4. Processors:
VCML
2.9 What opportunities exist for building the camel milk value chain?
- To what extent are these opportunities exploited?
- What is holding back utilization of opportunities?
- What needs to be done?
3.1 How is the transport function for camel milk organized?
- Are there specific transporters for camel milk or this function is
more played by traders?
- How many transporters – per channel
- What are the transportation means
- What volumes are handled by each type of transporter
3.2 Identify the full transport chain – per channel
- farmer to bulking point
- bulking point – to Isiolo
- Isiolo – Nanyuki – Nairobi
- Nairobi – consumers
- What is the value added at each segment of the chain
- Overall transportation cost
3.3 What are the key constraints faced in transportation
- How can these be addressed?
- What initiatives are taking place?
3.4 What opportunities exist & how can these be exploited?
4.1 Historical background – why started; what vision; installed capacity;
what progress to date; future plans
4.2 Organization of operations:
- Sourcing of supply – suppliers; volumes; prices
- Production – inputs; workforce; costs; volumes
- Marketing - markets, supply organization, volumes, prices
4.3 What is the value added by the processing plant? – what functions
- specific segments of the chain;
- Costs incurred under each
- Input prices
- Output prices
- Value added
4.4 How is the market demand for camel milk?
- what segmentation
- what requirements for each market segment
- What segments are the focus of the company?
FGDs
FGDs
FGDs
FGDs
- Key
informants
- FGDs
FGDs
FGDs
FGDs
MD/
Directors
-MD
-Operations
Manager
Operations
-MD
-Marketing
manager
6
5. Market
6. Market –
Consumers
4.5 What are the key requirements for the company to operate a profitable
business in these market segments?
- Volumes;
- Quality
- Consistency in supply
- Production organization
- Market organization
4.6 What constraints/challenges has the company faced in meeting these
requirements?
- Supply – production at farmer level; bulking, transportation
- Production
- Market penetration
- Other areas
4.7 What needs to be done address these constraints?
- efforts in the past
- current efforts
- additional initiatives
4.8 What opportunities exist for expanding & increasing the competitiveness
of the camel milk value chain?
- what is limiting the sub-sector from exploiting these
opportunities
- what needs to be done & by who?
4.9 Key players & the roles each must play
5.1 What are the different market segments for Kenya’s camel milk?
- Rural - households; institutions: raw vs sour
- Urban market (Nairobi; which others?):
o High end – fresh
o Low end - fresh
o Health
- Export – which countries
5.2 What is the estimated demand in these markets?
- what volumes
- what prices
5.3 What are the requirements of these markets
- Volumes;
- Quality
- Consistency in supply
- Prices
- Timing
- Etc
5.4 To what extent is demand in these markets met currently
- who supplies the markets (& how); from where?
- with what volumes, quality, prices
- what are the gaps?
- What is required to address these gaps
5.5 What opportunities does the market (various segments) offer for
expansion of the camel milk value chain?
- What needs to be done? By who?
- Past & ongoing initiatives?
- Further work required
6.1 What segmentation of consumers – Somalis; non Somalis
6.2 Main attraction to camel milk
6.3 Current consumption patterns
- volumes;
- frequency
-MD
-Finance
-Operations
- All
- All
- All
MD
- Literature
- Key
informants
- Sec & prim
information
- Sec & prim
information
– Nakumatt;
VCML;
hawkers; etc
- various
Sec & prim
- Consumers
Consumers
7
7. Development
agencies
6.4 Preferences
- Timing
- Quality
- Packaging
- Volumes
- Prices
6.5 To what extent satisfied with current supply
6.6 If not fully satisfied with current supply – what is required
Consumers
1.1 How many are the key institutions supporting development of the camel
milk value chain in Kenya - & specifically Isiolo?
1.2 Background of institution’s involvement in chain:
- How/why/for how long?
- Specific areas of focus
1.3 Obtain further background information on sector which the institution
may have e.g. number of camels; players; traders; market segments;
demand; prices; etc
1.4 What issues are constraining the sub-sector/value chain?
- Production
- Distribution
- Processing
- Marketing
1.5 Institution’s involvement in addressing these issues
- who else is doing what?
- What further initiatives are required?
1.6 What opportunities exist for further development of the sub-sector/ value
chain?
- what needs to be done to exploit these?
- What initiatives are ongoing?
- What further initiatives are required?
- Key
informants
Each inst
visited
Consumers
Consumers
“
“
“
“
8
2. Work Programme: September 15 – November 3, 2008
Date
Sept 15 - 19
Sept 19
Monday
Sept 22
Tue - Friday
Sept 23 -26
Sunday – Set 28
Monday
Sept 29
Tuesday
Sept 30
Wednesday
Oct 1
Thur - Fri
Oct 2 – 3
Sat - Mon
Oct 4/6
Activity
Pre Study activities: wk
Study commissioning – contractual issues with SNV
Mobilization of study team – contracts, agreement on roles
Literature review
Design of study methodology & instruments
Share study instruments and detailed work programme with SNV
Data Collection & Collation
• Meeting with SNV Nairobi: Thomas Were – morning
- General briefing on programme/ any clarifications on TOR/
planning
- Courtesy call to SNV HQ officer responsible (if possible)
• Secondary data collection of - production issues; Marketing; institutions
• Meetings with the following
- KCA
- VCML Nairobi based Director
- BSMDP/MESPT
- GTZ
- USAID/ELMT
- Food for the Hungry – Kenya
- Farm Africa
- GOK - Ministry of Livestock – Range; Production; Vet Services
- ILRI
- KARI
- KEPHIS
- KEBS
2.00 pm – Travel to Nanyuki
• Meeting with SNV – Northern
- Briefing current programme operations & need for VCA
- Interviews to clarify issues & obtain information
- Logistical issues (including planning; DSA etc)
• VCML
- MD
- Operations
- Marketing
• Interviews with any producers within Nanyuki
- Large scale herders/Ranchers
• Traders/transporters/consumers within Nanyuki
- Chain actors within Nanyuki – particularly those related to
VCML
• Bulking/cooling point in Isiolo
• Government – Ministry of Livestock
• Any producers – large herders
• Holding ground
• Producer Association – DLMC?
• Traders in Isiolo & any of their Association
• Service providers & any of their Association
• Transporters
• Input suppliers
• Some Consumers
• Development agencies – Ewaso Nyiro Dev’t Authority, etc
Visit to Cluster 1 – to be identified by SNV (Kulamawe?)
• Government – Ministry of Livestock
• Interviews with producers & their groups – at least 2 FGDs;
• Traders/transporters – bulking point
• Service providers – incl. extension services
•
•
•
•
•
Where
Who
Nairobi
PK
Nairobi
Nairobi
Nairobi
All
All
PK
Nairobi
All
Nairobi
Nairobi
DK; MM
All
Nanyuki
All
All
Nanyuki
All
Nanyuki
MM/DK
Isiolo town
MM/DK
Isiolo
MM/DK
9
Tue/Wed
Oct 7/8
Thur/Fri
Oct 9/10
Sept 29 – Oct
10
Sat – Mon
11 - 13
Tuesday
Oct 14
Wed – Fri
Oct 15 – 17
Mon
Oct 20
Oct 24
Oct 27 – 31
Nov 3
Visit to Cluster 2 – to be identified by SNV
• Government – Ministry of Livestock
• Interviews with producers & their groups – at least 2 FGDs;
• Traders/transporters – bulking point
• Service providers – incl. extension services
Visit to Cluster 3 – to be identified by SNV
• Government – Ministry of Livestock
• Interviews with producers & their groups – at least 2 FGDs;
• Traders/transporters – bulking point
• Service providers – incl. extension services
Market related data collection in Nairobi
• Nakumatt
• Other Supermarkets
• Health market outlets
• Eastleight market outlets – including hawkers
o Pasteurized market
o Raw milk
• Export market
• Interviews with consumers in the different market segments
• Interviews with any agencies not interviewed during first week
Isiolo
MM/DK
Isiolo
MM/DK
Nairobi
PK
Nanyuki
All
Nanyuki
All
Nairobi
All
•
•
•
•
•
Data analysis & Report preparation
Saturday: DK/MM travel to from Isiolo; PK travel from Nairobi – to
Nanyuki
Collation of information obtained from the field
Preparation of Aide Memoire (Debrief)
Debriefing with SNV (per Aide Memoire) – Morning
Travel back to Nairobi – Afternoon
Team finalizes report
•
Draft Report Submitted to SNV
Nairobi
PK
•
•
•
•
Comments from SNV on draft report received
Could also have validation workshop during this time
Incorporation of SNV comments into Final Report
Final Report submitted to SNV
Nairobi
Nanyuki
Nairobi
Nairobi
PK
All
All
PK
•
10
Appendix 3
Study Terms of Reference
SNV Study to explore the potential of Camel Milk to access sustainable
formal markets
1.0
Introduction
1.1
Information about SNV
The Netherlands Development Organization (SNV) is an international not-for-profit development
organization which provides capacity development services to nearly 2,500 local organizations in over
33 countries worldwide to support them with the fight against poverty. SNV is dedicated to a society
where all people enjoy the freedom to pursue their own sustainable development. SNV advisors
contribute to this by strengthening the capacity of local organizations. The focus of SNV on these
organizations is underpinned by the fact that they play a key role in reducing poverty in a sustainable
manner and in improving the lives of the poor. Therefore, SNV aims to:” support local actors to
strengthen their performance to effectively realize poverty reduction and good governance”. SNV
operates in nine countries in the East and Southern Africa (ESA) region including: Ethiopia, Kenya,
Sudan, Uganda, Tanzania, Rwanda, Zambia, Zimbabwe and Mozambique.
1.2
SNV Kenya
SNV Kenya focuses most of its capacity building support to the Arid and semi-arid areas of Kenya.
Specifically, SNV currently operates in three portfolio offices namely: South Rift, Located in Nairobi
but serving the districts of Kajiado, Narok and Transmara; North Rift located in Eldoret, serving the
Districts of Keiyo – Marakwet, Pokot, Turkana and Northern Kenya located in Nanyuki, serving the
districts of Samburu, Marsabit, Laikipia, Isiolo and Moyale.
In its contribution towards development efforts and overall poverty reduction, SNV Kenya embraces
specific country level poverty reduction goals, targets and governance policies and has chosen to
place all its work in two broad impact areas namely:
Access to basic services -Education, water and sanitation, and
Economic Development - along two value chains of the Livestock and Tourism sectors
This TOR has been developed to further understand the market dynamics in the Camel Milk subsector within Livestock value chain, with a focus on exploring the milks potential to access
sustainable formal markets.
2.0
Camel Milk
2.1
Overview
East Africa is home to 60 per cent of the world's camel population. In Kenya, the Camels comprise
about 10% of all the livestock which amount to about 1 million animals. It’s estimated that 2.5 million
out of the 3.3 million people in the ASAL areas (equivalent to 10% of Kenyan population) are directly
involved in Camel keeping.
The popularity of camel products in Kenya, Somalia, Sudan and Ethiopia has rapidly increased in
recent years, with milk not just consumed by pastoralists but being increasingly sold in urban areas in
local and international markets because of its nutritional and health values. The milk is believed to
offer a preventive cushion over peptic ulcers and provides an alternative for those allergic to cow
milk; besides, it is three times richer than cows’ milk in Vitamin C. It is rich in iron, non saturated
11
fatty acids and Vitamin B. The milk also has anti-bacterial components that suppress bacteria and
pathogens from inducing disease, and could be the solution to increased incidences of diabetes in
Kenya.
2.2
Rational of the Value Chain Study
Informal sources mention that the Kenya market alone requires 10,000 litres per day, and only 2,000
litres access markets, leaving a gap of 8,000 litres per day. According to a BSMDP report, Isiolo town
and its environs has a daily production capacity of more than 6,000 litres of camel milk of which only
1,000 litres is able to access the informal markets including Eastliegh. This quantity only account for
less than 15% of the milk produced implying that 85% goes to waste resulting into massive losses by
the producers.
At the moment, Vital Camel Milk Ltd (VCML) is the sole company processing Camel milk in Kenya.
The fact that there is a Camel milk processing plant in Nanyuki which is less than 100Kms from
Isiolo town and operates under capacity i.e. handles 800 litres only out of its potential of 10,000 litres
calls for an better understanding of the functionality of the value chain. However, there exist
alternative marketing channels, and one wonders why the facilities of VCML plant are not fully used
and what alternative marketing mechanism are used instead.
Available statistics indicate that most consumers in the formal markets are ready to offer premium
prices for the product. An example is Nakumatt Supermarket, which stocks half a litre of Fresh camel
milk retails at Kshs 99.00 compare to an average of 1 litre at source for Kshs 30-35. The milk is also
sold in the Health food Shops that are growing in number within the City of Nairobi. It’s therefore
essential to understand the dynamics and performance of this particular value chain in order develop
interventions that would absorb the milk that is currently going to waste.
3.0
Objectives of the Assignment
The focus of the study is to analyze and document the Camel Milk Value Chain that originates from
Isiolo District. The study identifies leverage points along the chain that can make the chain
sustainable and competitive in the formal market. The study also gathers sufficient information that
would be desirable to a strategic private sector investor whilst remaining cognizant of the sectors
potential role in addressing poverty reduction. The value chain development approach shall be used to
carry out this assignment.
4.0
Terms of Reference
The specific terms of reference for this assignment include;
9) To assess the current status of Camel milk production and marketing in the District,
including:
• number of Producers,
• Herd sizes,
• Volumes of milk produced and traded
• Possible value of traded milk ,
• Seasonal patterns of milk production and marketing
• Organisational mechanism amongst producers (in collecting, processing, transporting,
quality control of camel milk up to the selling point)
• Existing use of input supply for production
• Growth potential (both at supply side (production level) as well as potential (unmet)
market demand)
12
•
•
•
Existing local and end markets and marketing mechanism, including retailers, processors,
etc
Consumer preferences at local and end market
Existing interventions to promote both production, and marketing etc.
10) To identify the actors, their roles and current functions, and interrelationships along the
value chain (including governance aspects) (from the producers within the district to the
destination market, including the different services providers along the chain) and
document the graphical presentation of the Sub sector.
11) To map out the key drivers of the camel milk value chain and document the graphical
presentation of the Sub sector.
12) To identify and analyze the constraints (efficiency and effectiveness) along the value
chain with emphasis to existing market delivery channels whilst highlighting
opportunities for strengthening its access to markets. The constraints should be presented
along key aspects such as technology, market access, organization management,
policy/regulation, finance, input supply, infrastructure amongst other
13) To identify and discuss market based solutions that would enhance the performance and
economic viability of the desirable camel milk value chain..
14) To identify existing and potential service providers along the value chain.
15) To identify and analyse the significance of micro, small and medium enterprises, and lead
firms involved in camel milk and the current and potential role of women in the chain.
16) Provide input for a one day validation workshop on the study.
5.0
Reporting requirements
The study is expected to be performed within 25 working days commencing early August 2008 using
the value chain development approach. The consultant will be expected to submit a draft report by the
end of week 5. The report should include raw data together with all key illustrations such as pictures
and diagrams. The final report will be submitted within two weeks after receiving comments from the
validation workshop and SNV. Final payments will be effected once SNV have received final report
and sign it off.
6.0
Time frame
This work should take place within a period not exceeding 35 working days, expected to
commence early August 2008.
13
7.0
Roles and Responsibilities
7.1
Consultant
7.2
Prepare the methodology and develop appropriate tools
Carry out the field study ( both Isiolo District and Nairobi)
Prepare input for a validation workshop
Preparation of the final report that addresses the terms of reference.
SNV/Northern Kenya Portfolio
One advisor to partly accompany the consultant to the field
Transport and field up-keep allowance
Organize and facilitate for one day validation workshop.
8.0 Eligibility
Potential consultants are invited to submit their bid documents by 28th July 2008 to the physical
address below: The Technical proposal (not exceeding 12 pages), should include but not limited to the
following:
•
•
•
•
•
•
comments on these terms of reference
a detailed work plan including the sequencing of the events/activities;
demonstrate a good understanding of value chain analysis methodology and livestock industry
with a bias to the dairy sub-sector
key personnel together with their qualifications and experience;
an individual or company profile; and
An estimated cost based on the above.
Portfolio Coordinator
SNV – Northern Kenya Portfolio
Haile Sellasie Rd, off Nanyuki – Nyeri Rd
P O Box 1191 – 10400 Nanyuki
TEL: (+254) 020 3545528 / 020 8007493
Fax: (+254) 020 8007494
Cell Office: (+254) 0722 509384
14