![Next Page](next.gif)
ANNEX 7
KEY ELEMENTS OF THE ENABLING ENVIRONMENT FOR SMALLHOLDER DAIRY DEVELOPMENT
(1) Legal and regulatory framework
- A system of property rights, particularly a land tenure system which gives acceptable security for smallholders.
- A predictable and transparent system of taxation and government charges and taxes/charges.
- A law enforcement system which provides an acceptable degree of protection for personnel and property.
- Food safety regulations and practices which give consumers confidence in the product.
- Environmental regulations which are enforced to avert threats to the sustainability of production systems and/or adverse consumer response.
- Fully documented export and import protocols for food and agricultural commodities and established procedures which allow for free flow of goods.
- A system of licensing or permitting which does not present a barrier to investment or unduly inhibit interest of small-scale dairy entrepreneurs.
- A legal framework for producer organizations/cooperatives which provides a level playing field for them to operate with other corporate entities.
- Efficient regulatory mechanisms to ensure that all aspects of breeding services (including production/procurement, storage of semen and delivery of AI services), health services (preventative and curative) and feeding services (cattle feed, mineral mixtures, fodder seeds supply) are conforming to prescribed standards and protocols.
(2) Macroeconomic framework
- Level of protection provided to the agricultural sector and its major sub-sectors comparable with other developing countries.
- Responsible fiscal and monetary policy which provides a stable and predictable financial environment.
- An acceptable degree of stability in prices and exchange rates, or the means to deal with uncertainties in these areas.
(3) Markets and marketing systems
- Quality assurance and product trading systems which transmit price/quality signals along the value chain from end-user to smallholder.
- An independent product certification service-provider which is trusted by the market.
- Well developed marketing systems including market infrastructure, roads, transport, storage and processing facilities, market information services, product grading systems etc.
- Open competition within the marketing systems with fair and transparent trading practices and a level playing field with regard to market information and bargaining power.
(4) Input supplies
- Ready access to input supplies such as labour, water, seeds, feeds, animals, fertilisers and pesticides, together with the information needed to use them effectively and safely.
- Ready access to input services such as breeding, animal health and management advice.
(5) Financial services
- Banking, credit and insurance services which are accessible to smallholders and SMEs.
- Other financial services needed by larger enterprises such as leasing, warehouse receipting, commodity price hedging, forex transactions etc.
(6) Institutional support
- Research institutions which are responsive to stakeholder needs and have the resources needed to conduct high priority research.
- Extension or advisory services providing relevant information and training to smallholders.
- A quarantine and inspection service which can protect the agricultural sector from exotic pests and diseases and control internal spread of these.
- Effective farmer organizations and/or cooperatives, including village level groups which can be engaged to disseminate improved technologies.
- Statistical information necessary to monitor key trends and provide a sound basis for sectoral planning and policy analysis.
- Arrangements for public-private partnerships where necessary and privatization of input delivery services (including breeding) to provide effective door step services to dairy producers.
- Training and education services to generate the skilled personnel required in the sector.
(7) Infrastructure
- Satisfactory telecommunication services and electricity supply in rural areas.
- Transport infrastructure, especially roads and bridges, and systems in place to ensure that these are maintained or improved in line with demand.
- Supply of potable water in villages to ensure clean milk production practices.
![Next Page](next.gif)