Credit facilities and heifer supply within the Kagera livestock development programme - Tanzania

1. Introduction
2. Smallholder dairy farming in Kagera
3. KALIDEP achievements:
4. Dairy cattle numbers and milk production:
5. Extension and technical services:
6. Economic contribution:
7. Economic impact on women:
Acknowledgements:
References

V.K. Rugambwa, J. de Wolf, D. Stanslaus and E.M. Lutalala

Kagera Livestock Development Programme
P.O. Box 1661, BUKOBA - KAGERA.

Abstract

The Kagera Livestock Development Programme (KALIDEP) had 2096 smallholder dairy farmers (1-2 cows with followers) and 2382 cows, which produced 4.1 million litres of milk in fiscal year 1993/94. Smallholder milk production, achieved on zero grazing basis, depends mostly on the Kikulula Heifer Breeding Complex of the National Ranching Company and the Heifer-in-Trust (HIT) credit scheme for heifer supply. The HIT credit scheme is also the major source of credit for starting smallholder dairy farmers in Kagera Region. These two sources of heifers supplied, approximately on equal basis, a total of 487 pregnant heifers out of 517 distributed to new farmers in fiscal year 1993/94. Approximately 500 fully prepared farmers were on the waiting list as of 1st July, 1994.

The present paper discusses the constraints to and potential for increasing heifer and credit supply for small scale dairying in Kagera, in striving to meet KALIDEP's targets of 6000 dairy farmers and 5000 dairy cows producing 12 million litres of milk by the year 2000.

1. Introduction

Kagera Region, in the Northwestern part of Tanzania, has a total area of 28,500 km² of which 20,000 km² is suitable for agriculture. The Region is subdivided into five districts, Bukoba, Karagwe, Muleba, Biharamulo and Ngara. Bukoba district is further subdivided into Bukoba Urban, the administrative and commercial centre, and Bukoba Rural. The altitude in Kagera Region ranges between 1,128 and 1,646 m. Annual rainfall averages between 1,000 and 1,500 mm but may be as low as 500 mm and as high as 2,000 mm in some areas. Human population is approximately 1.3 million and the population density varies widely from 23 to 80 people/km² (National Census, 1988).

The regional economy heavily depends on crop production and to a lesser extent on animal production. The total number of farm families is estimated at 220,000 spread over 522 villages with average holdings of 1.1 ha/family (National Census, 1988). Permanent crops like banana, coffee and tea occupy 145,000 ha and annual crops take 188,000 ha; the remaining 1,536,000 ha (or 80%) is pasture land with nil to high tsetse challenge.

Approximately 20,000 households keep indigenous cattle (Houterman and Omolo, 1992) with an average number of heads per household of 6.3 (Muttagwaba et al., 1991). The livestock population consists of approximately 300,000 heads of cattle, 345,000 goats, 55,000 sheep, 2500 pigs and 500,000 poultry (MALD, .1988). The three dominant subsystems under which the majority of ruminant livestock are kept were recently described (Muttagwaba et al, 1991; Houterman and Omolo, 1992).

The common features of these subsystems of cattle keeping is low input - low output; with manure production, to a lesser extent milk production, and security and capital accumulation as primary objectives. The majority of the milk produced from indigenous cows (estimated at 20 million litres per year) is consumed by households owning these animals, and only a small part is marketed. Thus the demand for milk by households not raising traditional cattle remains unsatisfied.

The present paper discusses the constraints to and potential for increasing heifer and credit supply for small scale dairying in Kagera Region, Tanzania. This is in attempting to meet the unsatisfied demand for milk, and to meet KALIDEP's targets of 6000 dairy farmers and 5000 dairy cows producing 12 million litres of milk by the year 2000.

2. Smallholder dairy farming in Kagera

Historical perspectives:

Smallholder dairy production, whereby farmers keep an average of 1 or 2 dairy cows with followers on zero grazing, is now widespread in Tanzania and was recently reviewed by Komba and Mjingo (1992). Policy initiatives by the Ministry of Agriculture and Livestock Development towards the development of smallholder dairying started in the early eighties with assistance from various donors (Komba and Mjingo, 1992). This followed the realization that benefits anticipated from large scale dairy development i.e. reducing the import bill for dairy products, and improving the nourishment and incomes of the people were not reaching the rural population. The high standards of management required to ensure productivity and survival of imported temperate dairy cattle, and/or the poor adaptation ability of these animals also made it necessary to look for an alternative milk production system suited for the rural poor.

The development of smallholder dairying in Kagera Region was discussed by de Wolff (1990) and Houterman and Omolo (1992). Also recent papers (Houterman et al., 1993 a, b) contain detailed descriptions of specific aspects (crossbred heifer supply and computerized dairy herd monitoring) of small scale dairying in the region. Consequently, only an overview of this subject will be presented in the present paper.

The starting point of smallholder dairy production in Kagera Region was the establishment in 1976 of the Kikulula Heifer Breeding Unit (KHBU) on one of the National Ranching Company (NARCO) beef ranches in Kagera. The KHBU, through financial assistance from the Dutch government, remains the nucleus of dairy development in the region (KALIDEP, 1994; Table 1).

In 1979 the first F1 dairy heifers were sold from Kikulula to innovators who were well to do farmers. Up to January 1982 heifers were sold to non- screened farmers. It is estimated that up to 80% of the animals died within three months after being delivered to the farmers (de Wolff, 1990). This high mortality rate may have resulted from the limited extension input by the then Ministry of Livestock Development. Consequently, the majority of dairy heifers produced from KHBU from 1979 to 1983 were sold outside Kagera Region (Table 4).

In order to contain the high heifer mortality rate the Kagera Small Holder Dairy Extension Project (KSHDEP) was initiated in 1982. In the same year a start was made on the construction of Kikulula Farmers Training Centre (KFTC) through World Food Programme and Tanzania Government funds. KFTC started training aspiring smallholder dairy farmers in 1984 during one week courses. Kagera Indigenous Livestock Improvement Project (KILIP) was started in 1988 to cater for the needs of the indigenous livestock keepers, mainly by improving veterinary and extension services and input supply (de Wolff, 1990). KALIDEP (Kagera Livestock Development Programme) existing since 1990, is an umbrella structure for the four older sub projects (KHBU, KSHDEP, KFTC and KILIP).

3. KALIDEP achievements:

a) Heifer production:

Pregnant Friesian x Boran (F1) heifers for distribution to farmers are produced mainly through A.I. with Friesian semen. The average annual number of pregnant F1 heifers from Kikulula Heifer Breeding Unit sold to KALIDEP from 1982/83 to 1993/94 was 190 (Table 4). Total F1 heifer production over the same period was 2,672. Following the merger of two adjacent NARCO ranches (Mabale in 1991 and Kagoma in 1993) to Kikulula Ranch, it is anticipated that F1 heifer production will be 400 - 500 heads annually by the year 2000 (KALIDEP, 1994). Pass-on heifers generated from the Heifer In Trust (HIT) credit scheme are also a source of heifers for new farmers, but herd growth is slow. It takes approximately 10 years to produce 100 pass on pregnant heifers from 100 credit (HIT) heifers distributed (Houterman et al., 1993a).

b) Farmers training:

Aspiring dairy farmers participate in a one week training course at Kikulula Farmers Training Centre (KFTC) before receiving a credit or cash heifer. Farmers selected for training must have expressed interest in dairying and accepted the technical package of zero grazing, cultivation of at least 0.5 ha of fodder, and building a cow -shed. KFTC trained a total of 2,688 farmers (37% females) and 542 extension staff between July 1987 to June 1994 (KALIDEP, 1994). The number of farmers being trained per year has been increasing steadily (Table 1). Dip committee members (123) and leaders of dairy cooperatives (70) have also received training at KFTC in the last six years.

c). Number of dairy farmers:

The number of dairy farmers practising zero grazing rose from 4 farmers in January 1982 to 2,096 by 1st July, 1994 (Table 1). There has been a steady increase in the number of female farmers, individually or in groups. In June 1994, 29% of the farmers were women (Table 1). Of the new farmers in 1993/94, 43% were women. This rise in female farmers may be attributed to the appointment by KALIDEP of a women's coordinator in 1990 to promote women dairy farmers. KALIDEP's target of 2,000 dairy farmers by July 1994 was achieved (Table 1).

Table 1 Trends of main technical parameters (number of farmers and cattle, milk and cheese production and value) between 1982/83 and 1993/94 fiscal years.

	1982/83	1990/91	1991/92	1992/93	1993/94
Heifers (F1) sold from KHBU	381	234	227	299	235
Farmers trained (KFTC)	-	453	469	532	615
Women trained (%)	-	43	53	38	32
No. of dairy fawners	85	1,230	1,435	1,695	2,096
Women farmers (%)	7	12	24	27	29
Total dairy cattle	304	4,106	4,660	5,421	6,417
Total dairy cows	140	1,454	1,700	1,951	2,382
Cows in milk (%)	72	75	73	73	75
Milk production ('000 It) **	101	2,541	2,923	3,400	4,059
Value of milk sales ('000 Tshs)	3,030	177,870	206,610	292,400	409,500
Cheese production (kgs)	-	3,785	5,054	10,217	7,212
Cheese sales ('000 Tshs)	-	4,542	7,310	13,805	10,097
Farmers Extension Centres (FECs)	-	14	15	18	24

* Excludes milk consumed by calves
Source: KALIDEP 1993/94 Annual Report

4. Dairy cattle numbers and milk production:

The total number of dairy cattle was 6,417 and dairy cows 2,382 by 1st July, 1994. Animal count on 1st January 1983 was 125 dairy cattle and 55 cows (KALIDEP, 1994; Table 1).

Total milk production rose from 160,000 litres in January 1983 to 4.1 million litres in June 1994 (Table 1). Average milk production per cow per year, after rising sharply from 1,134 litres in January 1983, has remained steady at approximately 1,800 litres (Table 2). All milk produced is consumed locally except a limited amount that goes into cheese making (about 10 litres milk per kg cheese), some of which is sold outside Kagera Region.

Table 2. Summary of main technical parameters (averages for Kagera Region) for 1990/91 to 1993/94.

Parameter	1990/91	1991/92	1992/93	1993/94
Milk yield per cow/year (It)	1,802	1,842	1,838	1,800
Milk yield/cow present (It/day)	4.9	5.0	5.0	4.9
Milk yield/cow in milk (It/day)	6.4	6.4	6.5	6.2
Calving rate (%)	68	66	69	65
Calving interval (days)	-	503	501	503
Calf mortality rate (%)	13.4	8.1	12.3	14.3
Adult mortality rate (%)	4.4	2.7	4.3	4.2

KALIDEP has also promoted and aided the establishment of mini dairy processing plants, especially in rural areas experiencing milk marketing problems. Cheese production, mainly by dairy farmers cooperatives, started in 1990/91 fiscal year. Approximately 26,270 kg of cheese were produced as of June 30th 1994 (Table 1).

5. Extension and technical services:

KALIDEP currently has 77 livestock staff who guide and monitor the performance of mainly small scale dairy farmers. Each extension worker covers approximately 40 farmers. The programme also operates a revolving fund for veterinary drugs and supplies. The fund had a turnover of Tshs. 216 million during fiscal year 1993/94 (KALIDEP, 1995).

The Heifer In Trust (HIT) scheme helps farmers who can not afford a cash heifer to get one on credit. Repayment of the credit is by returning the first in calf heifer, which is passed on to another farmer (Houterman et al., 1993a). The goat in trust (GIT) scheme, aimed at reaching farmers who can not benefit from the HIT, is in its initial stages. Dairy goats are now being multiplied at Chivu, Ngara. Pure Alpine and 75% Alpine crosses (35 does, 6 bucks) formed the foundation herd in May 1993.

Artificial insemination service with Friesian, Friesian x Sahiwal and Friesian x Gir semen is used at KHBU for production of F1 heifers, and more recently in all district headquarters for nearby small holder farmers. Liquid nitrogen is bought from Entebbe, Uganda. KALIDEP purchases molasses from the Kagera Sugar Company and distributes it to all districts except Ngara and Biharamulo. Local sale of molasses is supervised by the molasses distribution committees or individual farmers from molasses tanks (38 tanks by July 1993) built with KALIDEP assistance. Of late very high prices of this commodity at the Kagera sugar company have forced farmers to reduce its use drastically.

On a small scale, KALIDEP assists farmers to construct biogas plants by supporting a local biogas consultant. A total of 77 (77% working) Chinese type biogas tanks had been constructed in the region per June 1993 (KALIDEP, 1994).

Farmers Extension Centres (FECs) built mostly with KALIDEP assistance, act as a focal point for both agriculture and livestock extension. They help as outlet points for crop and livestock inputs, however this function is gradually being turned over to private business. These centres also act as demonstration farms for dairy and crop farmers, and some provide bull and oxenisation service. They also multiply pasture and crop seed for distribution to farmers. Twenty four FECs were in operation per June 1994. The target for the region is 36 FECs (one per 15 villages). The FECs have areas ranging from 0.5 to 20 ha. We aim at developing 2 ha, on the average, for FEC houses, fodder plots and crop demonstration plots. FEC facilities are also available for farming systems research on-farm trials.

6. Economic contribution:

The gross value of milk produced increased from Tshs. 3.03 million during year one (1982/83) of the project to 405.9 million during fiscal year 1993/94 (Table 1). When the gross values of animal, meat and dairy by product sales are considered, the underlying economic activity is considerable.

Gross margins for 1992 and 1994 are shown in Table 3. In all areas of Kagera Region, small holder dairy production was profitable (Rugambwa et al. 1994). This must have a multiplier effect on non-agro and other agro-business e.g. feed supplements and other inputs for crop and animal production.

Table 3. Average gross margins during 1992 and 1994* including revenues from stock sales and repayment of credit heifers (in Tshs): (Source: Rugambwa et al., 1994).

AREA	GROSS MARGIN /FARM		GROSS MARGIN/COW		GROSS MARGIN/ MONTH/FARM
	1992	1994	1992	1994	1992	1994
Bukoba (U) **	295,609	262,828	173,888	158,515	24,634	13,209
Bukoba (R)	118,303	123,416	118,303	122,029	9,858	10,169
Karagwe (HQ)	124,614	-	124,614	-	10,384	-
Karagwe (R)	55,100	58,158	61,223	62,417	4,591	5,201
Muleba	85,126	106,516	85,126	101,041	7,093	8,420
FO**	346,058	-	88,436	-	28,004	-
Biharamulo	82,194	54,662	91,327	69,504	6,849	5,792
Ngara	130,113	110,477	144,570	132,572	10,842	11,084
Kagera Region	147,301	119,343	122,750	107,680	12,275	8,973

* For Karagwe district, the 1994 gross margins are district averages (Karagwe Headquarters (HQ) and Karagwe Rural).

** No payment of credit heifer

FO: A group of farmers in Muleba district who graze their fairly large herds of dairy cattle outside.

Animal manure is highly valued in Kagera Region for use in the coffee/banana farming system. Zero grazed dairy cattle provide manure to farmers to improve yields of coffee, bananas, beans, maize (usually intercropped), and cotton. These farmers would otherwise have not been able to afford purchased manure or indigenous cattle to provide manure required to improve soil fertility.

Hired labour is found on 65% of the smallholder dairy farms in Kagera. Although labour is a cost to the farmer, it is a means of earning a living to the labourers. For farms with no hired labour, mostly in the rural areas, family labour is not costed. However, in view of the low opportunity cost for labour in rural areas dairy production utilizes the otherwise idle labour.

7. Economic impact on women:

Zero grazing increases the work load of women farmers more than that of men, but the management of female farms is either equal or superior to that of male managed farms (Kabigiza and Obels, 1992; ILCA, 1993). In Kagera the economic impact on women of smallholder dairying is questionable as husbands tend to take over the cash obtained (Kabigiza and Obels, 1992). Where this is not the case, women farmers especially in rural areas are happy with the extra or sole income. Furthermore, increased consumption of dairy products by the household, and manure availability for food production are rated by both men and women as more important benefits than cash returns from small scale dairying (Nzunda et al., 1994).

Table 4: Heifer production from Kikulula Heifer Breeding Unit (KHBU)

AREA OF DISPOSALS	YEARS
	1979-1984	1985-1990	1991-1994
Sold in Kagera	442	1024	961
Sold outside Kagera	902	66	29
Total	1344	1090	991

Table 5. Heifer in Trust (HIT) credit repayment trends in Kagera Region.

Credit source	Credit type (Generation)	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	Total
HPI*	HPI 01	7	10	38	1	-	-	-	-	-	-	-	56
	HPI 02	-	-	-	1	5	2	5	2	3	1	1	20
	HPI 03	-	-	-	-	-	-	-	1	-	1	3	5
	HPI 04	-	-	-	-	-	-	-	-	1	-	-	1
	HPI 05	-	-	-	-	-	-	-	-	-	-	1	1
WFP/KALIDEP**	WFP 01	-	-	5	55	80	63	112	215	202	224	330	1286
	WFP 02	-	-	-	1	1	14	18	21	37	46	94	232
	WFP 03	-	-	-	-	-	-	-	-	-	3	4	7

* Heifer Project International
** World Food Programme/ Kagera Livestock Development Programme.

Table 6. Summary of heifer in trust credit scheme heifer repayments in Kagera Region.

Credit type (Generation)	Foundation Stock (heifers)	Credit Paid	Credit not paid	Total Credits	% credits repaid	Drop out farmers (before repaying)
HPI 01	56	28	28	56	50.0	18
HPI 02	-	9	15	24	37.5	2
HPI 03	-	1	5	6	16.7	0
HPI 04	-	1	0	1	100.0	0
HPI 05	-	0	1	1	0	0
Sub Total (a)	56	39	49	88	44.3	20
WFP 01	1286	304	982	1286	23.6	130
WFP 02	-	24	213	237	10.1	14
WFP 03	-	0	7	7	100.0	0
Sub Total (b)	1286	328	1202	1530	21.1	144
GRAND TOTAL KAGERA (a+ b)	1342	367	1251	1618	22.7	164

Acknowledgements:

The authors wish to acknowledge the assistance of KALIDEP Manager Dr O.S.J. Swai for the permission to use project data and facilities, Mrs Yacintha Rutta with word processing, and Mr T. Muttagwaba of KALIDEP's Monitoring Unit for computing service.

References

Houterman, J.F., Dummer, R.M., Lutalala, E.M. and Wolff J.T. de. 1993a. Quantitative aspects of heifer in trust credit schemes: The Kagera experience. Proc. 20th Sci. Conf. Tanzania Soc. Anim. Prod. 20: 168-188.

Houterman, J.F., Lutalala, E.M., Wolff, J.T. de., Nholope, D.J. and Stanslaus, D. 1993b. The monitoring system of the Kagera Small Holder Dairy Extension Project. Proc. 20th Sci. Conf. Tanzania Soc. Anim. Prod. 20: 216-231.

Houterman, J.F. and Omolo, S. 1992. Infrastructural support to livestock development in Kagera Region, Tanzania. In: C.P. Gootjes, G. den Hertog, R. de Jong, and AJ. Nell (Eds) Proceedings of the International Workshop Livestock Production in Rural Development, International Agricultural Centre, Wageningen. pp 143-158.

ILCA, 1993. Market-oriented smallholder dairying. ILCA 1992: Annual Report and Programme Highlights, International Livestock Centre for Africa, Addis Ababa, Ethiopia. pp 9-12.

Kabigiza, C.K. and Obels, I. 1992. A case study on women farmers participating in KALIDEP. Internal Paper, KALIDEP, Bukoba, Tanzania.

KALIDEP, 1994. Annual Report 1993/94. Kagera Livestock Development Programme, Bukoba.

KALIDEP, 1995. Annual Report; Commercial Departments, 1994. Kagera Livestock Development Programme, Bukoba, Tanzania.

Kinsey, E. 1994. Some aspects of credit: The HPI Tanzania Experience, Heifer Project International, Arusha, Tanzania.

Komba, G.L. and Mjingo, M. 1992. Small scale dairy development in Tanzania. In: C.P. Gootjes, G. den Hertog, R. de Jong and A.J. Nell (Eds) Proceedings of the International Workshop Livestock Production in Rural Development, International Agricultural Centre, Wageningen. pp 265-275.

MALD. 1988. Statistical Abstracts of the Livestock Census 1984 (Tanzania Mainland). Ministry of Agriculture and Livestock Development, Dar es Salaam.

Muttagwaba, T.J., Nholope, D. and Lutalala, E.M. 1994. Report on Technical Performance and Monitoring, 1st Quarter 1994. Kagera Livestock Development Programme, Bukoba.

Muttagwaba, T.J., Houterman, J.F., and Bosch, C.H. 1991. Monitoring indigenous livestock production in Kagera Region, Tanzania. Proc. 18th Sci. Conf. Tanzania Soc. Anim. Prod. 75: 165-171.

Nzunda, B., Rugimbana, C. and Kolff, H.E. 1994. Socio-economic gender study of the Kagera Livestock Development Programme. KALIDEP, Bukoba.

Rugambwa, V.K., Houterman, J.F. and Muttagwaba, T.J. 1994. Economic contribution and the economics of small holder dairy production in Kagera Region - Tanzania. Proc 21th Sc. Conf. Tanzania Soc. Anim. Prod. 21: (in press).

Tibaijuka, A.K. 1989. Strategies to enhance the participation of women in dairy development in Kagera Region. Economic Research Bureau, University of Dar-es-Salaam.

Wolf, J.T. de., 1990. Small holder dairy production in Kagera Region. Proc. 17th Sci. Conf. Tanzania Soc. Anim. Prod. 17: 1-7.

Wolf, J.T. de., 1991. Farmers Extension Centres Manual. KALIDEP, Bukoba.

DISCUSSION

Q. Dr. Grant Mwakatundu

From the figures available the calving interval of 500 days is too long. How does the project assist farmers in reducing the C.I. in order to increase the calf crop and consequently the number of heifers?

Response: Rugambwa

There are several efforts:

i) Continued training of extensionists on heat detection and economic aspects.
ii) Training of farmers on the above by extensionists.
iii) Encouraging farmers to raise bulls.
iv) Withdrawing of poorly managed credit heifers.
v) Intensification of monitoring.
vi) More careful selection and preparation of farmers.

All these are contained in KALIDEP phase II project objectives which emphasizes on extension delivery efficiency and intensification.

Comment. Dr. G. Sudi

One of the possibilities of solving the problem of long C.I. would be to distribute bulls with a group of heifers eg. ELCT distributes 15-30 heifers to a village with one or two grade or pure bred bulls. These bulls are rotated on three year basis and after 9-10 years the bulls are disposed from breeding.

Q. Dr. S. Mbogoh

The author emphasizes that HIT is a slow process of multiplying the number of heifers and that it will take 10 years to double the stock of original heifers. This is difficult to believe! Is there cheating by those who get on the first stock of heifers?

Response:

Yes, there is adequate monitoring based at village level. However what I said is that 100 credit heifers will generate 100 new farmers in 8-10 years. This is considering replacements of unproductive animals. Increasing management standards through extension effort and strict withdrawal of animals will improve the situation.