The document summarizes preliminary results from a study analyzing the performance of milk traders, producers, and business development service (BDS) providers in Tanzania and Uganda using a network approach. The study (1) evaluated a BDS program for dairy development, (2) advanced understanding of trader-producer-service linkages and development orientation, and (3) tested new empirical network analysis methods. Preliminary results show variation in network structures between locations and actor types. Future analysis will test hypotheses about how network characteristics and structures influence value chain behavior and development outcomes.

1. A network approach to analysis of the performance of milk
traders, producers and BDS providers in Tanzania and Uganda
Derek Baker, Amos Omore,
David Guillemois and Nadhem Mtimet
23rd annual International Food and Agribusiness Management Association (IFAMA) forum and symposium
17-19 June 2013, Atlanta, GA

2. Outline
1. Business Development Services (BDS) as a development mechanism
2. Networks in development, and introduction to networks as an approach to value
chain analysis
3. Approach taken, preliminary results
4. Next steps:
• formulation of broader conceptual frameworks for networks
• symposium on networks as value chain configurations, at African Association of
Agricultural Economists’ Conference, September 23-25, 2013, Hammamet, Tunisia

3. Business Development Services (BDS) in pro-poor
dairy development in East Africa
Milk Trader
Training Hygienic
guides
cans
Regulatory
Authority
Accreditation & monitoring
Reporting
(Trialled in Tanzania and Uganda – now being evaluated)
Training
Service
Providers
(BDS)

4. BDS in pro-poor dairy development in EA:
Linkages via marketing, inputs and services
Milk
Producer
Milk Market Hub
(Emphasis on traditional milk
market hubs to grow them)
Milk Traders
$$
Payment agreement
Inputs &
Service
Providers
(BDS)

5. Background to research
Representations of the Value Chain in pro-poor development:
• have a poor theoretical basis upon which to base research hypotheses
• lack quantitative intuition
• fail to capture inter-agent interactions
• cannot adequately address analysis of interventions
The research for which this is a preliminary presentation has goals:
1. Evaluate BDS programme for dairy in Uganda and Tanzania
2. Advance knowledge of trader-producer-service linkages and development
orientation
3. Test new empirical methods
The story so far
Theories of networks, applied to value chain analysis, used to formulate hypotheses
Measures of performance of BDS interventions formulated
Measures of VC-related network characteristics formulated
Data collected
Data processed using network-dedicated software (Pajek)
Preliminary analysis done

6. Sampling
1. Start with BDS providers:
i. select ALL “programme” BDS providers (11 in Mwanza)
ii. mirror with an equal number (11) of “non-programme” BDS providers
iii. Ask each BDS provider for a COMPLETE list of clients (traders and
producers)
2. Randomly select 5 “programme” BDS providers, and 5 “non-programme” BDS
providers from above
i. Randomly select 4 TRADERS from client list of each (i.e. 2*20 = 40)
ii. mirror with an equal number (20) of TRADERS not linked to the programme
iii. Ask ALL actors for contact lists
3. Randomly select 2 “programme-linked” TRADERS and 5 “programme” BDS
providers
i. Randomly select 2 PRODUCERS from each contact list (2*5 + 2*4 = 18)
ii. Mirror with an equal number (18) of PRODUCERS not linked to the
programme
iii. Ask ALL actors for contact lists

7. Sample
Mwanza
Arusha
BDS Providers
Programme
Non-programme
11
11
9
9
Traders-linked to programme
Traders-non-linked
20
20
16
16
Producers-linked to programme
Producers-non-linked
18
18
15
15
BDS providers
Traders
Producers
Total interviews
22
40
36
98
18
33
29
80
Totals
40
73
65
178

8. Milk supply in Uganda
Blue triangle : Trader
Red cirle: Producer
Thickness line: Quantity of milk traded between producers and traders.
Number: Quantity of milk traded per connection.

9. Results - Uganda Milk sales, BDS
Blue triangle : Trader
Red circle: Producer
Yellow box: BDS
Dot line: Milk traded
Blue line: BDS service

10. Results - Uganda Milk sales, BDS (detail)
Blue triangle : Trader
Red circle: Producer
Yellow box: BDS
Dot line: Milk traded
Blue line: BDS service

11. Results - Uganda milk sales and all BDS
Blue triangle : Trader
Red circle: Producer
Yellow box: BDS
Thickness of the line: Number of exhanges/services

12. Results - Uganda milk sales and all BDS (detail)
Blue triangle : Trader
Red circle: Producer
Yellow box: BDS
Thickness of the line: Number of exhanges/services

13. Results - Degree centrality for producers
Number of connections for producers in Uganda on Milk
Number of producers
160
140 producers have just 1 buyer
38 producers have 2 buyers
10 producers have 3 buyers
8 producers have 4 buyers
….
… right hand tail
140
120
100
80
60
40
20
0
1
2
3
4
5
6
7
8
9
10
11
12
Number of connections between producers and traders

14. Results - Degree centrality for traders
Number of traders
Milk. Number of connections for Traders in Uganda
40
36 traders buy from just 1 producer
18 traders buy from 2 producers
….
35
30
25
20
Note small peak (10 traders) buying
from 5 producers
15
10
5
0
1
2
3
4
5
6
Number of connections between producers and traders
Number of connections for Traders in
Mwanza on Milk
Number of connections for Traders in
Arusha on Milk
25
16
14
20
12
15
10
8
10
6
4
5
2
0
0
1
2
3
4
5
1
2
3
4
Note different configuration between Arusha and Mwanza
5
6

15. Results - Network characteristics for BDS provision - 1
Connection of BDS. Producers.
Uganda
One service received by one BDS is
counted as "one"
TRADERS
Connection of BDS. Traders. Uganda
One service received by one BDS is counted as
"one"
12
10
20
8
15
6
10
4
5
0
10
3
4
5
6
7
8
9
10 11
1 4 7 10 13 16 19 22 25 28 31 34 37 40
No. of connections from BDS providers
6
5
4
3
No. of traders
Connection of BDS. Traders. Arusha
One service received by one BDS is counted as
"one"
7
No. of producers
4.5
2
No. of connections trader to BDS
`
0.5
0
20
0
1
Connection of BDS. Producers. Arusha
One service received by one BDS is
counted as "one"
2.5
2
1.5
1
30
0
No. of connections producer to BDS
Number connections per BDS. Uganda
One service to one entity is counted as
"one
40
2
1 2 3 4 5 6 7 8 9 10 11 12
4
3.5
3
BDS
No. of traders
No. of producers
PRODUCERS
Number connections per BDS. Arusha
One service received by one BDS is
counted as "one"
40
35
30
25
20
15
2
10
1
5
No.1 of 3connections producer to BDS 0
5 7 9 11 13 15 17 19
1
No. of connections trader 19 BDS
to 21
3 5 7 9 11 13 15 17
0
1
2
3
4
5
6
7
8
9 10 11
No. of connections from BDS providers

16. Results - overview
Characterisation of networks:
Variation in network degree intensities:
i. Numbers of connections to trading partners
• Monopsony
• Monopoly
• Vertical integration
ii.
Numbers of actors’ connections to BDS providers
i. Cost-based economics of service delivery: scale and scope effects
ii. Mixes of types of service: bundling
Analysis of networks:

17. A shift in data interpretation
....Agents…
....network
connections …
... Observations....
... Variables....
A
B
C
...
A to B
A&B
C to D
...
Incl. A to B, A
& B, C to D
etc
Sub-network
specific
variables

18. Future analysis – a logical progression of hypotheses
Conventional view:
H01: Actors’ characteristics/performance = f(exogenous data collected)
Progression… (nested models?)
H02: Actors’ characteristics/performance = f(exogenous data collected,
number and form of network links)
H03: Number and form of links = f(exogenous data collected,
factors affecting linkages)
H04: Actors’ value chain behaviour = f(exogenous data collected,
factors affecting linkages)
H05: Value chain performance = f(exogenous data collected,
actors’ value chain choices)
H06: Development outcomes = f(exogenous data collected,
factors affecting network structure)

19. Symposium: September 2013
Network analysis applied to livestock value chains:
relationships beyond demand and supply and their
contribution to the impact of upgrading
interventions
African Association of Agricultural Economists’ Conference
September 23-25, 2013, Hammamet, Tunisia
Sponsored by PIM

20. Contact:
Derek Baker d.baker@cgiar.org
Nadhem Mtimet n.mtimet@cgiar.org
International Livestock Research Institute www.ilri.org