Business Development Services (BDS) Market Diagnostics in Rwanda
1. FINAL REPORT
CONSULTANCY SERVICES FOR BUSINESS
DEVELOPMENT SERVICES (BDS) MARKET
DIAGNOSTIC IN RWANDA
CONDUCTED BY:
SUBMITTED TO:
EAST AFRICA DAIRY DEVELOPMENT (EADD) PROJECT
JANUARY 2009
REPORT FOR BDS DIAGNOSTIC IN RWANDA 1
FIT RESOURCES JANUARY 2009
2. REPORT FOR BDS DIAGNOSTIC IN RWANDA 2
FIT RESOURCES JANUARY 2009
3. CONTENTS
Background and introduction 3
Methodology and activities 3
Preplanning 4
Training 5
Field work 5
Sampling 6
Key challenges of fieldwork 7
Data processing 7
Presentations 8
Key conclusions of the methodology 8
Findings of fieldwork and data analysis 9
CONSUMER SURVEY by location 9
Locations covered and key informants interviewed 9
Targeted SME consumers interviewed 9
Market profiles 11
Key demand side constraints and opportunities 25
Business development services that address those constraints and opportunities 26
Specific policy constraints that are affecting MSE product markets 28
SUPPLIER DIAGNOSTIC by location 29
Existing providers/ services and their locations 29
A workable data base of the BDS actors 30
BDS suppliers interviewed 30
Types of services and price of services, how providers cover costs, profitability, existing 31
contractual arrangements and promotional/marketing strategies
Capacity gaps of interviewed suppliers 34
Priority supply side constraints, market failures, and market opportunities 34
Comparison of interviewed suppliers 36
The enabling environment for BDS 37
Conclusions 38
Characteristics of the market for BDS in each specific region in relation to existing supply, 38
demand and transactions
An insight into the potential of each target market location 39
Level of market distortion 40
Comparative information on the in-country sites and the 3 markets 41
Recommendations 42
Other current or proposed dairy sector interventions 42
Sustainable solutions to address priority market constraints and market failures 42
Illustrative market based interventions 51
Approaches and methodologies 55
Strategies which ensure effectiveness and efficiency 56
Strategies which ensure sustainability 59
Suggested BDS providers/delivery channels to target for future interventions 62
Selecting appropriate BDS providers 63
BDS performance measurements at the BDS market level 63
Annexes 67
Database of SME actors including persons interviewed
Database of BDS suppliers including persons interviewed
Database of targeted suppliers
Itinerary
FIT/RI scope of work
Final instruments
Data collected
BDS training report
REPORT FOR BDS DIAGNOSTIC IN RWANDA 3
FIT RESOURCES JANUARY 2009
4. Researcher training report
Background and Introduction
In a bid to improve life through poverty reduction, a consortium of organisations
comprising of Heifer International as lead, TechnoServe Inc, ILRI, ABS-TCM and ICRAF
launched a 4 year program dubbed EADD (East Africa Dairy Development) funded by Bill
and Melinda Gates Foundation. The programme aims to move smallholder farmers out of
poverty by delivering farmer-focused, value-chain activities that are implemented
simultaneously to stimulate dairy farm production, dairy-sector services, business
development and dairy market pull. The vision of success for the EADD is that the lives of
179,000 families—or approximately one million people—are transformed by doubling
household dairy income by 2018 through integrated interventions in dairy production,
market-access and knowledge application.
The consortium deemed it important to carry out a market assessment to understand the
characteristics of the BDS markets in relation to existing supply, demand and transactions
in the dairy sectors in some key sites in Kenya, Uganda and Rwanda. The information
would:
• Provide an insight into the potential of each market
• Clarify opportunities for interventions
• Define broad strategic approaches
FIT Resources Kenya (FIT) in collaboration with Research International East Africa Ltd
(RIEAL) were contracted to coordinate the market diagnostic in key locations in Kenya.
The findings and recommendations of this consultancy will contribute to the market
focused, sub sector approach of the EADD aimed at improving the functioning of BDS
markets. The final scope of work is attached to this report (Annexes/Final Revised
SOW).
FIT Resources act as the lead agency and contract holder, to provide strategic leadership
in devising and conducting the business development service consumer research and
supplier diagnostic. Research International conduct the field work as a sub contractor, to
collect primary and secondary qualitative and quantitative information, analyse, process
and present the data.
Methodology and activities
To achieve the above results the following activities were agreed on:
• Preplanning (planning meetings, research boundaries on the basis of project
resources, existing sub sector information, market assessment goal/
objectives/research hypothesis, developing and testing the tools, screening
interviewers, target locations in each country, preliminary key informants, other
current or proposed interventions)
• Training (training of EADD staff, field research teams and BDS training workshop)
REPORT FOR BDS DIAGNOSTIC IN RWANDA 4
FIT RESOURCES JANUARY 2009
5. • Field work (target groups, sample size, areas covered, team structure, consumer
survey and supplier diagnostic)
• Data processing (developing the data base of BDS actors, profiling the markets,
choose priority constraints, identifying and scoping out sustainable solutions,
defining ‘illustrative’ market based interventions and strategies, suggest appropriate
BDS providers, establishing comparative information, identifying BDS performance
measurements)
• Presentations (stakeholder workshops and final presentation)
Preplanning
Relevant background information was sourced via a series of planning meeting with
Technoserve and EADD consortium members. Meeting presentations and minutes are
attached to this report (Annexes/Process meetings). These meetings also included
setting the research boundaries on the basis of project resources, preliminary selection of
target locations and the agreed definition of ‘small holder farmer’.
The market assessment goal, objectives and research hypothesis were agreed as follows:
The market assessment goal is:
To understand the characteristics of the BDS markets in relation to existing supply,
demand and transactions in key sites in Rwanda.
The market assessment objectives are:
• To provide an insight into the potential of each market
• To clarify opportunities for interventions
• To define broad strategic approaches
The research hypothesis is:
If current BDS market dynamics are better understood then strategic approaches and
interventions can be devised to develop BDS markets in a sustainable manner and benefit
SMEs.
It was agreed that the FIT/RI team would build capacity of the project staff to undertake
future market assessments during the life of the project. Due to budget constraints a
targeted number of sites were discussed that affords the best opportunities to kick-off the
project and generate some ‘quick wins’. A training itinerary was also agreed upon to
capacitate EADD project staff in BDS and research skills. FIT Resources provided lead for
the overall assignment and liaison with Technoserve and the country offices on all the pre
planning activities. FIT Resources coordinated the field preparation with Research
International and Technoserve including: tool development and testing, researcher
selection and training and itinerary development. Different tools were developed to cover
the demand (consumer) side and supply (supplier) side of the market. The final
instruments and itinerary are attached to this report (Annexes/Final Instruments). The
following activities were undertaken prior to the commencement of fieldwork: screening of
team members, preparation and translation of questionnaires and preparation of reporting
tools and manuals. Research International personnel met field staff/counterparts and
finalised the selection of target locations and identification of key informants in each
country. Research International finalised the training of field researchers including EADD
project staff and preparations for field research.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 5
FIT RESOURCES JANUARY 2009
6. No secondary information was used as the project is building on a baseline survey and
existing value chain assessments in each country. The comprehensive examination of
targeted BDS markets and value chains will assist EADD in designing systemic solutions
to key market problems. The two subsystems—BDS markets and value chains—are
complementary components of the larger market system into which MSEs must integrate.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 6
FIT RESOURCES JANUARY 2009
7. Training
1. BDS training workshop - FIT Resources personnel implemented an indepth EADD
staff stakeholder training in Uganda (to include Uganda and Rwanda stakeholders).
This 2 day formal training in diagnostic skills covered the principles and practices of
BDS, BDS market development, BDS market assessment and BDS market
development programme design and performance measurement. The aim of this
training was to capacitate project staff and provide stakeholders with a contextual
framework for the research. The workshop presentations, training materials and
training reports are attached (Annexes/BDS Training).
2. Training of field research teams - teams including Technoserve and consortium
member staff, were subject to an in country briefing session prior to fieldwork
commencement. The training sessions covered methodology of the assessment
stages, sampling, tools and stimulus methods to use with market players and how
to complete reporting formats. The aim of this training was to capacitate project
staff to engage in further market diagnostics beyond the life of this collaboration.
The workshop presentation and training reports are attached (Annexes/Research
Training).
Field work
In order to complete this assignment within the defined period, a large teams of
interviewers, team-leaders and supervisors were assigned. Team members were recruited
from the RIEAL regional offices, according to specifications based on experience and
qualifications. The RIEAL Principle Researcher and a field coordinator coordinated the
research at all stages, and focused on ensuring that outputs were planned in advance so
time-schedules were met. They worked alongside the RIEAL existing field management
structure that forms the line management for the field departments. Daily reporting of
results and activities from each team was channeled back through this central
management team.
Research International led and implemented the field research in collaboration with EADD
project staff. Consultations and market observation were undertaken during the fieldwork
which included visiting identified target locations plus identifying and holding interviews
with key informants and targeted dairy sector stakeholders relevant to the selected sites.
Consumer survey - Consumer research was implemented with a selection of consumers
from the core market itself with a focus on farmers and chilling plant stakeholders.
However the definition regarding ‘small holder farmer’ was reviewed and altered during a
process meeting and the ceiling lifted of the number of cows as many farmers in Uganda
and Rwanda are large compared to Kenya’s extensive small holder population.
Constraints and opportunities were then identified in the areas of market access, input
supply, technology/product development, management and organisation, policy, finance
and infrastructure. The size and strength of the market in each specific area of the country
for those services was estimated broadly plus key sub sector constraints, market failures
and market opportunities defined from the demand side. Key business development
services were identified that address the specific constraints and opportunities.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 7
FIT RESOURCES JANUARY 2009
8. Supplier diagnostic - Based on the identified priority services, relevant suppliers were
identified and a supplier survey implemented with service providers from the support
markets to determine who is supplying BDS and how. Constraints, market failures and
opportunities were then determined from the supply side. A comparison of suppliers was
also undertaken and the level of market distortion anticipated. Stakeholders from the
business environment such as local authorities, regulators/policy makers were contacted
as required to provide an overview of the business environment.
The BDS Market Assessment Survey took place in Rwanda from 14th - 25th November,
2008. The area of coverage of the survey research was Nyagatare and Gatsibo Districts
covering the following sectors and sampling points:
Nyagatare Nyagatare Gatsibo
BMN Mbare
• Bushoga • Karangazi • Kiramuruzi
• Tabagwe
New sites not included will be covered by Technoserve staff beyond the life of this
consultancy.
Sampling
The sample included 316 interviews spread across the 3 sites.
302 farmers were interviewed.
As per the briefing instructions, the teams covered a 20KM radius from the location
of the chilling plant. Depending on the number of locations located within the 20 KM
radius, an equal number of sampling points were picked in each location to ensure
spread of interviews.
For each location, the team leader picked the starting point randomly, and using the
random route method, farmers who fitted the set criteria were interviewed: Selection
criteria included:
• Dairy farmer
• Have mature milking cows
Interviews were conducted on farmers who possessed up to 20 cows either being
milked or dry currently. There was a shift from the earlier limit of 5 cows due to the
widespread ownership of traditional cows in the region. Again it was also realized
that even when farmers owned vast herds here, their milk production remained low
as they keep indigenous cows that produce an average of between 1 and 4 liters
each per day.
The team traveled as one and on reaching the research site (village) members were
dispatched in different directions. The left hand rule applied in selecting the dairy
farmer to interview starting from a given landmark. This meant that once an
interview took place, the interviewer moved 3 households keeping on the left hand
side then interviewed the 4th household.
However, the above rule was only applied where the population was dense and
where farms were relatively big (over 10 acres), the skipping was limited to 1
household. At the household, the interviewers first spoke to the adult member of the
family, mainly the husband or wife though at some instances, some other family
members who were directly responsible for dairy farming gave information.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 8
FIT RESOURCES JANUARY 2009
9. In Rwanda, farmers are allocated grazing land by Government in accordance with
the size of cattle herd one has. A centralized area is then set aside where people
are allowed to build their homes and the farms are located at a considerable
distance away from their homes. This state of affairs meant that our interviewers in
most cases could not physically see the cows to ascertain some claims by farmers.
As for suppliers (14 were interviewed), the team picked supplier names from the
farmers, other suppliers and also those they came across in the trading centres.
From the list, a score was given to each and every supplier based on set criteria
(capacity to deliver services, closeness to SMEs e.g. in terms of understanding their
culture and geography, commercial focus e.g. level of profitability, focus on services,
SMEs or BDS, organizational independence- especially from donor funds, legally
registered and willingness/interest/ability to partner). This set of requirements not
withstanding, and because of their scarcity, all suppliers listed were sought for
interview, although a few could not be found.
Key challenges of the fieldwork
• Late start in Rwanda due to technical hitches and strict protocols e.g. Government
requirement of research license
• Accessibility of some sectors
o Transport – lack of efficient public transport. Tabagwe Sector is
approximately 20 kilometers away from Nyagatare Township and the only
available mode of public transport was motorbikes.
o Rains – the timing of the study coincided with rainy season and this affected
the movement.
• Special events – the arrest of a senior Rwanda Government official in Germany and
the visit to Gatsibo district by Kenya’s President Kibaki coincided and interrupted
fieldwork as farmers were called on to participate in the demonstrations and rallies
that were organized by the Government countrywide.
• Few/ uncooperative BDS suppliers. Some of the BDS suppliers were either
uncooperative or hard to find. There were very few BDS suppliers of dairy products
and services and as such farmers have limited choices.
• Research fatigue – a good number of farmers complained of having participated in
other recent agricultural and other types of surveys whose results and benefits they
had no idea of.
• Questionnaire duration. Some respondents complained it was taking too long to go
through a questionnaire. This was particularly so during the first few days when
most of the interviewers took over one and a half hours (90 minutes).
Data processing
Research International processed all the data collected on an ongoing basis. Research
International personnel have developed a database of actors (BDS providers in each of
the areas under study are listed, categorized by service provision and their location
recorded). A further database defines specific provider gaps and capacities including a
score against agreed selection criteria for determining target partner providers. A
database of the small and micro enterprises (SMEs) interviewed has also been
developed. The full data set is attached to this report (Annexes/Databases).
To understand the markets, RI examined three key issues - demand, supply and
transactions (the interaction between demand and supply) during the market assessment.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 9
FIT RESOURCES JANUARY 2009
10. The outcome of analyzing this information forms a picture of each BDS market showing
how it works, where the opportunities for growth are, and where significant problems lie.
Data analysis was undertaken to profile the markets, establish comparative information on
the in-country sites and the 3 markets and draw conclusions from the data.
A round table meeting was held in early December 08 with stakeholders to overview the
methodology and process of data processing and analysis and reach consensus on the
priority constraints/opportunities and identify possible solutions. The meeting presentation
is attached to this report (Annexes/ Process meetings). Sustainable solutions that
address priority supply side and demand side constraints were discussed. Illustrative
market based interventions were also developed with a focus on potentially
sustainable/profitable services that are replicable in the private sector. Strategies which
ensure effectiveness, efficiency and sustainability were also discussed alongside
suggested BDS performance measurements. The data processing plan was then
circulated for stakeholder feedback during the analysis process and the data plan is
attached to this report (Annexes/Process meetings). Comparative information on the in-
country sites and 3 BDS markets was also produced.
Presentations
FIT Resources and Research International personnel collaboratively implemented a
presentation and action planning at a stakeholder workshops in Rwanda with staff,
consortium members and key informants on 9th January 09. This workshop included a
short training presentation on the basic principles and practices of BDS and the Market
Development Paradigm. All the research findings were presented and proposed illustrative
solutions and performance measurements discussed. Feedback was recorded and an
action plan developed.
FIT Resources then prepared this final draft report and will present the final report to
Technoserve with support from Research International in Nairobi, Kenya by FIT
Resources and Research International on January 30th 2009.
Key conclusions of the methodology
• Outsourcing the MA to a research company ensured a more effective and efficient
MA process.
• A combination of outsourcing and internal capacity building ensured the best
possible results. The likelihood of useful research results was ensured as EADD
stayed close to the MA process.
• The ability of EADD staff to remain consistent to the process was questionable.
Staff members were not always available for the trainings and meetings as required
plus EADD field staff were not available to partner on the field work in some
locations drawing into question the long term ability of field staff to implement
further diagnostics in new locations.
• Determining a clear hypotheses and outlined MA goal and objectives ensured a
more effective delivery of analysed data from Research International.
• The MA focused on a holistic picture of the market and incorporated both sides of
the market equation—demand and supply.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 10
FIT RESOURCES JANUARY 2009
11. Findings of fieldwork and data analysis
CONSUMER SURVEY by location
Locations covered and key informants interviewed
Nyagatare BMN Nyagatare Mbare Gatsibo
Bushoga Karangazi Kiramuruzi
Tabagwe
Targeted SME consumers interviewed
The consumer survey in Rwanda covered 302 respondents. The respondents qualified to
be interviewed if they were small scale milk producers and specifically for Rwanda if they
had less than 20 traditional cows. For every site covered, a minimum of 100 farmers were
interviewed.
Of the 302 respondents interviewed, 80 percent (243) were males while 20 percent (59)
were females. A majority of the male respondents (26%) were aged between 36 – 45
years while for the females the majorities (32%) were aged 46 – 55 years. Only few
respondents (4%) were aged between 18 – 25 years and above 64 years.
Distribution of Respondents by age % of total sample interviewed
BASE=302
Males 80
Females 20
Most of the farmers practiced mixed farming –crop growing and cattle keeping. Expectedly
and as per the recruitment procedure all respondents were dairy farmers. This was
followed by food crop farming at 81%. Cash crop farming in the region is insignificant as
only 3% of the respondents reported growing cash crop.
As per the recruitment procedure all the respondents interviewed were the key decision
makers on dairy farming activities. Currently, a majority (88%) of the farmers milk between
1 – 5 cows despite most of them having more than 5 cows. In terms of herds kept, Majority
of the farmers in Nyagatare claimed to own more than 5 cows while in Gatsibo the
proportion of those who have more than five was small.
Farmers in the three sites were found to be keeping mixed breeds. However, a majority of
them (84%) keep indigenous breeds. About half of the farmers interviewed also keep
cross breeds 46% while those who keep pure breeds are less than 10%.
The findings also indicated that Nyagatare-BMN had more pure breeds (14%) compared
to Gatsibo and Nyagatare-Mbare where farmers claimed to own 8% and 4% of pure
breeds.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 11
FIT RESOURCES JANUARY 2009
12. Nyagatare Nyagatare
TOTAL Mbare BMN Gatsibo
BASE: 302 101 100 101
%
Pure breed 9 4 14 8
Cross breed 46 47 54 39
Indigenous 84 88 88 76
On average, farmers with pure breeds reported to produce 17 liters of milk per day while
cross breeds produced 8.5 litres per day. Expectedly, the productivity for traditional breeds
was reported to be the lowest. In terms of regions, Nyagatare BMN and Mbare farmers
produce more milk per day with an average of about 10 litres per day compared to
Gatsibo where daily production average was reported to be around 6.6 liters.
Expectedly, the amount of milk sold per day on average within the three sites is less than
the amount produced as some milk is spared for domestic use. The table below indicated
the average amount of milk sold by farmers:
District Average liters Average Difference
produced per liters sold (unsold milk
day per farm per day - liters)
Nyagatare-Mbare 9.5 6.7 2.8
Gatsibo 6.6 5.5 1.1
Nyagatare-BMN 10.1 7.3 2.8
Across the three sites covered in the research, most of the farms were between 1 – 5
acres in size.
Market profiles
Awareness and affordability of services/ inputs
When respondents were asked the dairy inputs/ services they are aware of, AI, mineral
supplements, vet treatment services and veterinary vaccination were mentioned by more
than 90% of the farmers. Other inputs that were mentioned by more than 60% of the
respondents include insecticide and tick sprays and supplementary feeds. However,
despite AI ranking as the service majority of the farmers were aware of (98%), complete
familiarity of its benefit was rated below average. Across all services/ inputs in totality,
farmers were least aware of chaff cutters and hay balers. Expectedly, almost all farmers
were not familiar with the benefit of the two farm equipments.
In terms of affordability, of the 7 top most inputs/ services that farmer were aware of,
supplementary feeds, veterinary vaccination and AI were rated as highly unaffordable to
farmers. The table below summarises some key inputs/ services that farmers are aware of
REPORT FOR BDS DIAGNOSTIC IN RWANDA 12
FIT RESOURCES JANUARY 2009
13. in regard to familiarity with the benefits, availability, affordability and most important
overall.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 13
FIT RESOURCES JANUARY 2009
14. Not affordable
Completely familiar even after Most
with benefit of Very strongly saving up overa
Aware Easily available
needed
Artificial Insemination (AI)
98 46 70 84 34
Mineral supplements 92
96 84 87 16
Vet Treatment Services 93 63 71 82 29
Veterinary vaccination 91 80 84 87 54
Insecticide and Tick
84 79 89 26
sprays 84
Supplementary feeds 63 24 30 74 56
Disinfectants for Cleaning 58 59 47 84 31
Information/training on 47 23 21 80 37
animal husbandry
On enquiring from the farmers the services/ inputs they have purchased or received in the
past for their dairy animals, supplementary feeds and disinfectants were ranked lowest
among the 7 top services farmers were aware of as shown in the figure below.
However, farmers expressed concerns on the adequacy of most inputs/ services that they
have received in the past 12 months.
In terms of services/ inputs that were being used nowadays, only three performed
averagely and above. These were mineral supplements 77%, insecticide and tick sprays
66% and veterinary treatment services 52%.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 14
FIT RESOURCES JANUARY 2009
15. Inadequate
amount
Purchased in
Aware Ever purchased P12M Used nowadays
Artificial Insemination 98 77 62 40 52
(AI)
Mineral supplements 96 94 92 77 30
Vet Treatment Services 93 80 74 52 45
91 91 82 48 23
Veterinary vaccination
84 84 82 66 37
Insecticide and Tick
sprays
63 34 24 12 71
Supplementary feeds
58 46 45 33 39
Disinfectants for
Cleaning
47 7 4 1 67
Information/training on
animal husbandry
Services/inputs ever purchased or received
Generally, the 3 markets do not indicate any significant differentials in the demand for
services and inputs purchased or received. However, some slight differences were noted
in Nyagatare (BMN & Mbare) where almost all farmers claimed to have vaccinated their
animals and in Nyagatare Mbare where AI services were claimed to have been used by
over 80% of the farmers. This may mean that the drive to transform herds from indigenous
to cross breeds is at a higher level in Nyagatare which conforms to the breeds kept.
Services/Inputs ever
purchased or received Nyagatare Nyagatare
TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
%
Artificial Insemination (AI) 77 83 72 77
Veterinary treatment
services 80 82 82 76
Veterinary vaccination 91 88 87 97
Supplementary feeds 34 33 38 31
Mineral supplements 94 96 99 87
Disinfectants - for cleaning
and sterilizing 46 51 44 43
Insecticides & tick sprays 84 76 89 87
Although some farmers observed that through savings, they could purchase some of the
services or inputs, milk coolers, supplementary feeds and veterinary vaccination were
perceived to be out of reach by a majority. Those who said services/ inputs were not
REPORT FOR BDS DIAGNOSTIC IN RWANDA 15
FIT RESOURCES JANUARY 2009
16. affordable were asked why they thought so. The following table provides a breakdown of
some of the reasons advanced (sample: all who said not affordable):
Service/ product Total So expensive May be able to
sample could never use if saves
consider using up
%
Artificial Insemination (AI) 79 34 66
Veterinary treatment services 104 29 71
Veterinary vaccination 57 54 46
Supplementary feeds 140 56 44
Mineral supplements 90 16 84
Disinfectants - for cleaning and 85 31 69
sterilizing
Insecticides & tick sprays 126 26 74
Seeds to grow fodder 82 46 54
Milk testing kits 90 44 56
Hay bailers 87 47 53
Milk coolers 140 68 32
Metal milk churns 115 37 63
Information/training on animal 94 39 61
husbandry
For the services/ inputs that farmers have received in the past, a majority of the farmers
reported having paid something the last time to access certain services/ products. The
fees paid ranged depending on the type of service, distance from where the service
provider was coming from, among other things.
The table below provides an average cost of different products and services offered to the
farmers:
Disinfectants
Artificial Veterinary - for Insecticides
Insemination treatment Veterinary Supplementary Mineral cleaning and & tick
(AI) services vaccination feeds supplements sterilizing sprays
BASE: All
who ever
received.... 234 242 274 102 284 139 254
%
Yes 93 98 95 86 98 96 97
No 7 2 5 14 2 4 3
Amount
paid (mean
in Fr) 4100 8900 1900 19100 10800 14400 11300
REPORT FOR BDS DIAGNOSTIC IN RWANDA 16
FIT RESOURCES JANUARY 2009
17. Level of satisfaction with service/inputs received
The following table shows the level of satisfaction with services/inputs received:
- for cleaning
Supplementa
Disinfectants
Insemination
supplements
& tick sprays
Insecticides
Level of satisfaction
vaccination
Veterinary
Veterinary
with service received
treatment
sterilizing
Artificial
services
ry feeds
Mineral
last time
and
(AI)
BASE: All ever
purchased/received
service 234 242 274 102 284 139 254
Completely satisfied 42 74 94 54 87 77 85
Partly satisfied 34 21 6 34 12 22 13
Not at all satisfied 24 4 - 12 1 1 2
A majority of the farmers who accessed the seven most popular services/ inputs reported
being satisfied with the quality and nature of services provided. For those reporting
complete satisfaction, the lowest reported complete satisfaction was recorded among
farmers who received Artificial Insemination (42%) while the highest was registered
among farmers receiving veterinary vaccination at 94%. Other levels of satisfaction stood
at 74% for veterinary treatment services, 54% for supplementary feeds, 87% mineral
supplements, 85% for insecticides and tick sprays, and 77% for disinfectants for cleaning
and sterilizing.
While there is room for improvement among those reporting complete satisfaction,
particularly among those reporting lower than 90%, there is more to be done among those
reporting partial satisfaction and those claiming not satisfied at all.
Areas where milk could be sold
Respondents mentioned a number of possible areas where milk could be sold as
presented below:
Area
Nyagatare Nyagatare
Areas could sell milk TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
%
Bulking/ cooling center 75 88 60 75
Hawker/ brokers 57 70 29 72
Farmers cooperative /group /association 47 49 38 54
Direct to homes e.g. Neighbours or family
members 47 49 49 45
Direct to institutions e.g. school, hospital, food
kiosk 25 25 31 19
Milk bar 26 32 31 16
There were more farmers reporting milk bulking and collection centers as places where
they could sell their milk. This was reported by 75% of the farmers. It was followed by
REPORT FOR BDS DIAGNOSTIC IN RWANDA 17
FIT RESOURCES JANUARY 2009
18. hawkers/ brokers at 57%, and neighbors/ relatives and cooperatives/farmer groups tying
at 47%, milk bars 26%, institutions 25%.
However on being asked where they are selling milk currently a majority of them reported
selling to brokers/ hawkers (52%) followed by neighbours/ family members, milk bulking/
cooling centers or to farmers associations. Interestingly, hawkers are not a popular buyer
in Gatsibo district, while selling to neighbours and family members seem to be the most
preferred here.
Nyagatare Nyagatare
Types of customers TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
%
Hawker 52 62 26 67
Cooling plant 47 51 47 42
Direct to homes e.g. Neighbours or family
members 47 49 49 45
Farmers cooperative/group/association 47 49 38 54
Milk bar 26 32 31 16
Direct to institutions e.g. school, hospital,
food kiosk 25 25 31 19
Bulking center 11 12 8 12
Processor 10 11 4 15
Broker at farm gate 5 8 3 5
However, in terms of preference among those who sell to more than 1 channel, ‘direct to
homes’ and ‘farmers co-operatives’ emerged as the preferred buyers.
Adequacy of information received on where could sell milk
Asked to explain what they felt about the information they received regarding where they
could sell their milk, a majority of the farmers indicated they received just enough
information (72%). Only a paltry 2% reported receiving what they considered as a lot of
information. However, farmers in Nyagatare BMN seem to be divided almost equally
among those claiming to receive just enough information (52%) and those saying they
received very little information (46%).
Nyagatare Nyagatare
Info received TOTAL Mbare BMN Gatsibo
BASE 302 101 100 101
%
Very little 26 23 46 11
Just enough 72 75 52 87
A lot 2 2 2 2
Asked to indicate the other services they enjoyed from their main buyers besides buying
their milk, the majority of farmers (57%) reported receiving no other services at all. The
table below shows some of the services received by farmers from some milk buyers:
REPORT FOR BDS DIAGNOSTIC IN RWANDA 18
FIT RESOURCES JANUARY 2009
19. Nyagatare Nyagatare
TOTAL Gatsibo
Services received Mbare BMN
BASE: Total Sample 302 101 101 100
%
Advance on milk payments 20 22 19 20
Farm inputs - seeds, fertilizer 5 2 6 8
Animal feeds/ supplements 7 6 6 8
Milk collection from the farm or near
6 5 4 10
farm
AI services 7 4 4 12
Animal health services- treatment,
19 21 16 20
vaccination and drugs
Training on animal husbandry 12 4 18 14
Information on market prices 8 11 5 9
Delivery/ transport of farm inputs
and animal feeds 3 3 3 4
None 57 53 63 55
Of the services received, some farmers claimed to have paid for them while some were
either not sure or did not pay anything. The main mode of payments for these services
was the check-off system with only 28% claiming to pay in cash.
Services paid for (%)
Advance on milk payments 30
Farm inputs - seeds, fertilizer 31
Animal feeds/ supplements 50
Milk collection from the farm or near farm 26
AI services 50
Animal health services- treatment, vaccination and
drugs 65
Training on animal husbandry 14
Information on market prices 8
Delivery/ transport of farm inputs and animal feeds 10
Extra services required from milk buyers
When asked if they would require extra services from the milk buyers, majority of the
farmers responded positively. Below is the list of services they would expect to get from
the milk buyers:
Nyagatare Nyagatare
TOTAL Gatsibo
Services/ inputs required Mbare BMN
BASE: Total Sample 302 101 101 100
%
Advance on milk payments 37 30 37 46
Farm inputs - seeds, fertilizer 18 14 22 18
Animal feeds/ supplements 30 23 36 33
Milk collection from the farm or near
farm 25 23 25 27
REPORT FOR BDS DIAGNOSTIC IN RWANDA 19
FIT RESOURCES JANUARY 2009
20. AI services 25 23 23 30
Animal health services- treatment,
vaccination / drugs 29 28 35 26
Training on animal husbandry 30 25 31 35
Information on market prices 28 24 27 33
Delivery/ transport of farm inputs and
animal feeds 18 16 19 18
None 33 31 41 29
In regard to payments for milk, 2/3 of the farmers indicated they are paid in cash after a
specified period as shown in the table below. However, in Gatsibo, a significant number of
farmers confirmed to receive money through their bank accounts. Two modes of payments
also emerged as the most preferred means of receiving payments by farmers:
Nyagatare Nyagatare
Mode of payment for sold milk TOTAL Mbare BMN Gatsibo
BASE: Total Sample 302 101 100 101
%
Paid cash on delivery 8 4 9 11
Paid in cash after a specified
period 62 73 64 50
Cash deposited to a financial
institution 14 9 14 18
Barter - exchange milk for other
services 0 - - 1
Farmers who deliver milk to the formal market were asked how they deliver milk to the
market. ¾ of the respondents claimed to deliver milk on their own to the market. However,
in terms of the preferred mode, over ¾ of the farmers would prefer their milk to be picked
up at farm gate. This pattern was similar in all the 3 markets:
Nyagatare Nyagatare
Current milk delivery system TOTAL Mbare Gatsibo BMN
Base 181 60 58 63
%
The buyer provides for transport
from the farm or near farm 25 33 12 29
Use your own means to transport
(bike, walk) etc 75 67 88 71
Overall, among the farmers whose milk is collected by the buyer, slightly less than half felt
it was either reliable or very reliable. However, in Gatsibo (though the base was small) the
majority of the farmers rated the transport to be unreliable.
Nyagatare Nyagatare
Buyer reliability TOTAL Mbare BMN Gatsibo
BASE: All provided transport
by the buyer 45 20 18 7
REPORT FOR BDS DIAGNOSTIC IN RWANDA 20
FIT RESOURCES JANUARY 2009
21. %
[wt=5] Very reliable 24 15 44 -
[wt=4] Reliable 20 15 28 14
[wt=3] average 16 15 11 29
[wt=2] Poor unreliable 13 20 6 14
[wt=1] Very unreliable 27 35 11 43
REPORT FOR BDS DIAGNOSTIC IN RWANDA 21
FIT RESOURCES JANUARY 2009
22. Frequency of milk collection
Milk is collected generally once a day across the three regions:
Nyagatare Nyagatare
Milk collection TOTAL Mbare BMN Gatsibo
BASE: All provided transport by the
buyer 45 20 18 7
%
Once in a day 93 95 89 100
Two times a day 4 - 11 -
Three times 2 5 - -
Asked to express their feeling on whether they thought this was adequate or inadequate, a
majority (62%) felt it was inadequate. However, in Nyagatare BMN, 56% of the
respondents felt it was adequate.
Adequacy of Milk Nyagatare Nyagatare
collection TOTAL Mbare BMN Gatsibo
BASE: All provided transport
by the buyer 45 20 18 7
%
Adequate 38 30 56 14
Inadequate 62 70 44 86
Awareness of cooling plant
Almost all respondents were aware of a cooling plant near them. Some of the cooling
plants mentioned include:
• Mudakos
• Nyagatare cooling plant
• Mbare
• Terimbere mworozi (Karangazi)
• Rwabiharamba dairy
• Musenyi
• Bashumbambeza
• Karama
• Mubyatarama
• Kirebe
• Cyangarama
• Kamate
A majority of the farmers (90%) also claimed that the cooling plants were owned by
farmers’ cooperative groups in the region. Farmers stated they would expect to get the
following services from the cooling plants:
Nyagatare Nyagatare
Cooling plant services Total Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
Credit facility 74 69 72 81
REPORT FOR BDS DIAGNOSTIC IN RWANDA 22
FIT RESOURCES JANUARY 2009
23. Farm inputs - seeds, fertilizer 46 42 48 48
Animal feeds 62 51 67 67
Milk collection from the farm or near
farm 54 55 44 62
AI services 57 51 57 63
Animal health services - treatment
and prevention 74 70 78 72
Vaccination and drugs 71 64 69 80
Training on animal husbandry 58 58 50 66
Information on market prices 74 69 72 81
Credit facility, animal health services – treatment and prevention and information on
market prices emerged as the key services farmers need, although most of the other
services and inputs are also needed at varying levels which reflects a very high demand.
Asked if they would be happy with check-off as mode of payment for their milk, nearly all
farmers (93%) said that they would be very happy.
Reaction to check-off Nyagatare Nyagatare
payment system TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
%
Happy 93 92 92 95
Not sure 4 2 7 3
Unhappy 3 6 1 2
Skills/ information needed by farmers
Majority of the farmers (83%) indicated they do not have the skills needed for good dairy
farming across the 3 regions. When asked to mention the areas they needed more
information on, the following emerged:
Nyagatare Nyagatare
Skills/info required TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
Disease id, treatment & prevention 72 76 77 63
Improvement of milk production 66 71 61 66
Drug administration 61 62 60 59
New animal feeds 60 64 55 59
Milk prices 55 53 55 57
Cattle breeding 54 57 41 64
Dairy farm record keeping 30 34 25 31
Record keeping 25 21 26 28
Public health issues and requirements 22 19 27 21
Awareness of government policies 19 17 20 21
Buyers 13 11 14 13
Whether ever received any useful information
Farmers were asked whether they had ever received any useful information about dairy
farming. About 69% reported not to have received any. The same trend was recorded
REPORT FOR BDS DIAGNOSTIC IN RWANDA 23
FIT RESOURCES JANUARY 2009
24. from the three regions. Those reporting having received useful information were then
asked to indicate what services they had received. The advice/ information were mainly
stated to be from government extension workers and to some extent, the NGO’s. The
following Table shows the breakdown:
Nyagatare Nyagatare
Info received TOTAL Mbare Gatsibo BMN
BASE: All ever received information 93 24 36 33
%
Improvement of milk production 54 50 56 55
Awareness of government policies 33 25 28 45
Cattle breeding 32 33 25 39
New animal feeds 24 25 25 21
Disease identification, treatment and
prevention 19 17 25 15
Drug administration 18 8 28 15
Dairy farm record keeping 10 13 8 9
Record keeping 2 - 3 3
Public health issues and requirements 1 - 3 -
Milk prices 1 - - 3
Whether plans to change anything
Asked whether they planned to change anything about their dairy farming in the next 1
year, nearly all farmers indicated they have some plans in mind. However, 85% of the
farmers highlighted breed improvement as the key change they would like to implement.
The figure below shows areas farmers mentioned they would like or plan to improve on in
the next 1 year.
Planned changes for farm and dairy improvement:
Improve the quality of my milk / improve my milk
handling skills 11%
Improve feed storage methods 12%
Buy farm equipments 15%
Grouping with other farmers to get cheaper inputs 15%
Improve the management of my dairy as a business
23%
Group together with other farmers / join association
23%
/ join coop / join producer group
Improve feed by buying supplements 23%
Improve my knowledge about dairy farming 28%
Improve the veterinary treatment / drugs used on
30%
cattle
Enlarge size of herd / Buy more cattle 30%
Improve feed through growing better / more feed 31%
REPORT FOR BDS DIAGNOSTIC IN RWANDA to zero grazing
Change feeding 32% 24
FIT RESOURCES JANUARY 2009
Improve building 33%
Improve breeding / breed of cattle through breeding
85%
methods / use AI
25. REPORT FOR BDS DIAGNOSTIC IN RWANDA 25
FIT RESOURCES JANUARY 2009
26. To achieve the above desired changes farmers mentioned the following measures as
drivers they are definitely likely to adopt:
• Grouping together with other farmers or joining co-operative to benefit from
economies of scale - e.g. cheap farm inputs
• Use of AI services
• Growing of more and quality feed
• Enlarging size of herd
• Adopting zero grazing methods
Keeping records
Overall, only a small number of farmers reported keeping records which were mainly on
milk production and sales.
Nyagatare Nyagatare
Record keeping TOTAL Mbare Gatsibo BMN
BASE: All who keep records 37 7 16 14
Milk sales 95 100 94 93
Milk production 81 57 94 79
Record on animal births 59 57 56 64
AI services records 38 29 38 43
Treatment and vaccination records 35 29 38 36
Feeds record 11 - 25 -
Milk sales
Milk production
Record on animal births
AI services records
Treatment and vaccination
records
Feeds record
Profitability
Despite not having any farm records, a majority of the farmers claimed to know the
profitability of their dairy farm. About two thirds of the farmers indicated knowing the level
of profitability of their dairy farms. Males (68%) were more likely to know the profitability of
their dairy farming business than their female counterparts (56%). Farmers in Gatsibo
70%, followed by those in Nyagatare Mbare (69%) seem more knowledgeable about the
profitability of their farms than their counterparts in Nyagatare BMN (57%). Given that
Gatsibo has more of zero grazing practices than the other two markets, it may be easier to
monitor levels of expenditure viz avis incomes and thus keep a tab on profitability.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 26
FIT RESOURCES JANUARY 2009
27. Nyagatare BMN, which has bigger herds of the indigenous cattle, may still have more
farmers who keep cattle for traditional values rather than as business.
Nyagatare Nyagatare
Awareness on farm profitability TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
Yes 66 69 70 57
No 34 31 30 43
Technology (mobile phones)
Penetration of mobile phone within the three areas is high as attested by the table below.
Generally, about 82% of the farmers reported owning/ having access to a mobile phone.
This was almost uniformly distributed across all segments.
Nyagatare Nyagatare
Mobile phone access TOTAL Mbare Gatsibo BMN
BASE: Total Sample 302 101 101 100
%
Yes 82 80 84 82
No 18 20 16 18
Asked which services they would like to access via the mobile phone sms service, cow
disease alerts, milk prices, and market for breeds, availability of new products, and
training/ field days/ dairy farming workshops emerged as the five leading pieces of
information they would require.
Nyagatare Nyagatare
Info required by phone TOTAL Mbare Gatsibo BMN
BASE: All with/ have access to a
mobile phone 248 81 85 82
Cow disease alerts 75 73 73 78
Milk prices 72 70 64 83
Market for breeds 71 69 69 74
Availability of new products and
services 62 63 64 60
Trainings/ field days/ dairy farming
workshops 61 58 64 61
Availability of milk payments 50 47 44 60
New markets 50 48 39 65
Sale of cows 50 57 41 52
Quantity of milk supplied 48 51 45 49
New market opportunities 48 44 40 60
Access to loans 38 32 41 39
Farmers indicated high willingness to pay fees ranging from Fr 1000- 2100 to be able to
access these services. See the figure below:
REPORT FOR BDS DIAGNOSTIC IN RWANDA 27
FIT RESOURCES JANUARY 2009
28. Info would be ready
to pay for
Info would like to access
via mobile phone
Milk rejected at processor level to inform farmer 33
37
Access to loans 35
38
New market opportunities 41
48
Quantity of milk supplied 40
48
Sale of cows 44
50
New markets 45
50
Availability of milk payments 42
50
Trainings/field days/dairy farming workshops 57
61
Availability of new products and services 54
62
Market for breeds 65
71
Milk prices 67
72
Cow disease alerts 68
75
Capital
Almost all farmers indicated that they require capital to develop their dairy farming
business. Most of the farmers (61%) say they would seek credit from banks. See table
below:
Nyagatare Nyagatare
Credit options TOTAL Mbare Gatsibo Bmn
BASE: All need lump sum/ capital 278 90 99 89
Banks 61 61 64 58
Micro finance institutions 13 12 12 16
Cooperative SACCO 8 6 8 11
Cooling plant 6 7 7 4
No source 4 4 4 4
NGOs 3 4 4 1
Family/ friends 3 4 1 2
Suppliers 1 1 - 1
Government 0 - - 1
Awareness of farmer lobby organization
Only a few farmers were aware of an organisation that looks after their needs apart from
Gatsibo where 45% claimed to be aware:
REPORT FOR BDS DIAGNOSTIC IN RWANDA 28
FIT RESOURCES JANUARY 2009
29. Awareness of Nyagatare Nyagatare
organization TOTAL Mbare Gatsibo Bmn
BASE: Total Sample 302 101 101 100
%
Yes 38 30 45 39
No 62 70 55 61
In regard to membership to a farmer’s co-operative majority of the farmers belongs to
none. However, in Nyagatare BMN slightly over half claimed to be members of a
cooperative.
Whether member of a Nyagatare Nyagatare
Cooperative TOTAL Mbare Gatsibo Bmn
BASE: Total Sample 302 101 101 100
Yes 45 34 49 53
No 55 66 51 47
Challenges faced by farmers
Low and fluctuating milk prices coupled with delayed payments, inadequate and low
quality foliage for feeding cattle – e.g. grass and Napier grass, irregularity and
unaffordability of AI services and unaffordable/ unreliable animal treatment services were
some of the key challenges farmers highlighted as major constraints to their dairy farming.
Low milk prices combined with fluctuating milk prices and delayed milk payments
accounted for the highest single challenge at 67%.
In terms of gender, there were no significant variations although the findings seem to
indicate that male farmers were significantly (74%) more likely to complain about low /
fluctuating milk prices/ delayed payments compared to their female counterparts (37%),
while female farmers were significantly (82%) more inclined to complain about inadequate/
low quality animal foliage than their male colleagues (58%). The same trend was noticed
for irregular/ unaffordable AI services.
Age wise, there were no significant differentials across except that farmers aged less than
35 years were significantly less likely to complaint about the adequacy/ quality of foliage
than their counterparts in higher age groups.
As per the markets, Gatsibo records the lowest complaint about low milk prices (51%) as
compared to the 2 Nyagatare Sectors – BMN 82%, and Mbare 68%. Perhaps this can be
explained by the fact that Gatsibo reports the lowest milk output, (and thus higher prices)
and less dependence on milk brokers unlike the other two. However, Gatsibo reports the
highest complaint (72%) regarding adequacy/ quality of foliage available in the region –
reflecting its bigger dependency on zero grazing for its dairy farming. BMN records the
lowest at 55% mirroring its larger grazing fields.
Other challenges mentioned are as per the table below:
Gender Age Region
Main
REPORT FOR BDS DIAGNOSTIC IN RWANDA 29
FIT RESOURCES JANUARY 2009
31. Key demand side constraints and opportunities
The following are the constraints and potential opportunities.
Constraint Opportunity
Inadequate foliage and grass to feed • Provide seed to grow fodder to selected
animals due to poor climatic conditions farmers who have larger farms. They can
– draught. thus sell to others at competitive prices
• Introduce supplementary feeds
Irregular and unaffordable AI services • More AI providers needed at main trading
centres at village level
• Establish scheduled visits by AI providers to
all villages
• Train farmers on basic procedures of
conducting AI
Inaccessible/ unaffordable loans to • Provide easily accessible/ affordable
promote dairy farming. financial products that are developed/
tailored to meet farmer needs
Low and fluctuating milk prices • Establish more strategic milk collection/
hindering farmers from planning their cooling centres
future • Improve on roads to facilitate easy/ cheaper
milk transport
• Establish a local dairy processing plant
Poor/ unreliable animal treatment and • Additional veterinary doctors needed at
vaccination services village level
• Further training for skill upgrading for vet
technicians
Unaffordable supplementary feeds • More suppliers needed
beyond the reach of many small scale • Use of locally available raw materials need to
farmers be explored to make them affordable
Unreliable source of supplementary • More farmers should be trained on how to
feeds prepare them
Disease outbreaks • Modern lab testing facility established in the
region
• Vaccination of cattle strengthened
Business development services that address those constraints and opportunities
The following table outlines the BDS that address these constraints and opportunities:
Constraint Opportunity BDS that address those
constraints & opportunities
Inadequate foliage and • Provide seed to grow INPUT SUPPLY such as creating
grass to feed animals due fodder links between farmers and
to poor climatic conditions • Supplementary feeds suppliers and enabling suppliers to
– draught. reach more farmers and develop
their capacity to offer better quality
inputs.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 31
FIT RESOURCES JANUARY 2009
32. Irregular and unaffordable • More AI providers INPUT SUPPLY such as
AI services needed at main trading facilitating links between farmers
centres at cell level and AI suppliers and enabling
• Scheduled visits by AI suppliers to reach more farmers
providers to all villages and develop their capacity to offer
better, less expensive inputs.
Inaccessible/ • Easily accessible/ FINANCE such as helping farmers
unaffordable loans to affordable financial identify and access funds through
promote dairy farming. products developed formal and alternative channels
tailored to meet farmer that include supplier or buyer
needs by banks and credits, factoring companies,
MFIs equity financing, venture capital,
• Major milk buyers e.g. credit unions and commercial
dairy cooperatives banks (letters of credit, etc.)
consider introducing
simple financial
products that are
affordable by the
farmers
Low and fluctuating milk • Establish more milk MARKET ACCESS such as
prices hindering farmers collection /cooling identifying and establishing new
from planning their future centres markets for products plus the
• Improve on road creation of links between all the
networks actors and helping buyers to
• Establish locally a dairy expand their outreach to, and
processing plant to take purchases from, farmers. This may
advantage of the also include helping farmers to
excess milk. produce to buyer specifications.
INFRASTRUCTURE such as
establishing sustainable
infrastructures that enable farmers
to increase sales and income e.g.
refrigeration, processing facilities,
transport systems, communication
centers, and improved roads.
Poor /unreliable animal • Additional INPUT SUPPLY as above
treatment and vaccination veterinary/vaccination
services doctors needed at TRAINING & TECHNICAL
village level ASSISTANCE such as workshops
• Further training for skill to develop the capacity of farmers
upgrading and suppliers to better plan and
• Scheduled visits to manage their operations and
villages to attend to improve their technical expertise.
farmer needs This may also include fostering
links between service providers
and farmers.
Unaffordable • More suppliers needed INPUT SUPPLY as above. This
supplementary feeds • Use of locally available may also include encouraging
beyond the reach of many raw materials need to more potential suppliers to meet
REPORT FOR BDS DIAGNOSTIC IN RWANDA 32
FIT RESOURCES JANUARY 2009
33. small scale farmers be explored to make the market demand.
Unreliable source of them affordable TECHNOLOGY & PRODUCT
supplementary feeds. DEVELOPMENT such as
identifying new technologies.
Disease outbreaks • Modern lab testing INFRASTRUCTURE as above
facility established in
region
• Vaccination of cattle
strengthened
Poor transport/ road • Improved road INFRASTRUCTURE as above
networks that slows networks in the deep
growth of the dairy sector rural areas
• improvement of the
transport systems e.g.
introduction of
minibuses to compete
with the motor bikes
and help farmers to
market their milk
cheaply
Specific policy constraints that are affecting MSE product markets
The following are some of the policy constraints that are affecting the MSE product
markets:
1. Locating households away from dairy farm
The Government of Rwanda has introduced a land development and resettlement
policy in this region where farmers are settled in centralised areas while the grazing
farms are allocated a considerable distance away. Managing the farm becomes
tricky and there are added costs of travelling and a worker to keep watch and graze
the animals. Milking may also not be properly done and accounted for in the
absence of the farm owner and there could be cases of cheating about the milk
output.
2. Strict legal and public health regulatory requirements
The strict enforcement of minimum regulatory standards for suppliers particularly
milk handling/ collection, may be responsible for keeping very few suppliers
engaged in this business. As a result, farmers cannot access certain services easily
and affordably as the supply competition is limited.
In order for the BDS market to be stimulated for faster growth, the strict legal/
health requirements may need to be relaxed a bit until such a time suppliers have
grown and the need for strict enforcement is really needed.
3. Government continued involvement in service provision
Government policy of providing subsidised AI and veterinary treatment and
REPORT FOR BDS DIAGNOSTIC IN RWANDA 33
FIT RESOURCES JANUARY 2009
34. vaccinations, though positive in its intentions can only serve to establish the sector
from infancy. However, sustained growth can only be achieved where market
forces of supply and demand are left free to operate.
The government should reduce its involvement to regulating and creating an
enabling environment. Its continued presence and active participation in service
provision only serves to discourage and choke private sector competition.
This situation where effective competition is lacking, has led to poor services being
dispensed judging by some of the complaints received during fieldwork. For
instance there were reports of poor quality semen which led to farmers getting
poorer grade calves in contrast to what was promised during insemination. The
tragedy of this is that farmers only discover the problem after nine months when
birth takes place. Again farmers reported waiting for days before a veterinary doctor
arrives in their village to treat their cattle.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 34
FIT RESOURCES JANUARY 2009
35. SUPPLIER DIAGNOSTIC by location
Existing providers/ services and their locations
The following breakdown shows how suppliers were distributed across this region. A total
of seven suppliers were identified in Nyagatare/ Tabagwe sectors. However, only six were
found/ interviewed. In Karangazi sector, six suppliers were listed but only five were found/
interviewed. In Kiramuruzi sector four suppliers were identified but only three were found
and interviewed.
A workable data base of the BDS actors
A workable data base of these BDS providers is attached to this report
(Annexes/Databases).
BDS suppliers interviewed
List of suppliers interviewed as attached above.
Types of services and price of services, how providers cover costs, profitability,
existing contractual arrangements/relationships and promotional/marketing
strategies
Types of services
The common services/ inputs provided in this area include veterinary treatment and
vaccination services, mineral supplements, insecticide and tick sprays, and disinfectants
for cleaning and sterilizing, and supplementary feeds. Others are information/ training in
animal husbandry and artificial insemination (AI). Across the two districts, it appears that
the services provided are similar although Nyagatare District could be defined as more of
a cattle keeping district while Gatsibo would qualify more as an area of mixed farming
practices with less land for cattle rearing. Grazing fields are therefore bigger in Nyagatare
than in Gatsibo.
Services/ inputs provided Nyagatare BMN Nyagatare Mbare Gatsibo
(No of suppliers – (No of suppliers (No of suppliers
BASE=6) BASE=5) BASE=3)
Vet treatment services 6 5 3
Disinfectants - for cleaning 6 5 3
and sterilizing
Mineral supplements 3 5 3
Info/training in animal 5 4 2
husbandry
Insecticides & tick sprays 6 2 2
Supplementary feeds 2 1 2
Milk testing kits 2 3 1
Seeds to grow feed 2 2 2
REPORT FOR BDS DIAGNOSTIC IN RWANDA 35
FIT RESOURCES JANUARY 2009
36. Vet vaccination 2 1
Milk collection/ bulking 2 2
Milk advance payments or 2
credit services
Artificial Insemination 2 2
Information on dairy 1 1 1
markets
Metal milk churns 2 1
Price of services and how providers cover costs/ profitability
Across the 3 sites, suppliers interviewed indicated that they do not charge their customers
for any information they dispense concerning dairy farming. They make their money and
profits by selling/ charging for the conventional products and services provided like selling
drugs, AI provision or treatment of cows. When pricing services and inputs suppliers
considered several factors to arrive at a given price, as follows:
• Wholesale price of input from source
• Transport cost/ distance covered if it is an outreach service
• Taxes payable on service/ input
• Rent
• Whether demand for input/ service is high or low
• Competition
• Profit margin
• Big suppliers like Agrotech Nyagatare who is associated with Agrotech chain of
animal drug shops, explained that they do not determine prices, but that the prices
are dictated from the head office in Kigali.
• For instance, some AI providers reported buying semen to fertilize one cow at 500
fr from the Government agents only to sell this at 1500 fr to the dairy farmer.
Besides, the farmer pays transport cost separately. Usually, this will be the cost of
hiring a motor bike by the AI provider.
One of the AI providers told of cases where they are sometimes forced to forego
payments when they come across needy farmers who are unable to pay for services.
Such costs are absorbed through government subsidiaries like ERAGIC – an institution
that promotes modern dairy development through easy access to AI services.
The commonest form of payment for services/ inputs rendered was cash after service,
across all types of service providers. When the service provider is a Cooperative or an
Association of farmers, members enjoy the check-off system facility which allows them to
pay later through deductions from their weekly/ monthly payment for milk deliveries. Other
forms of payment options are delayed/ staggered payment and payment by cheque.
Staggered payment is normally allowed for instance where a cow is either dry or sick until
it heals and resumes being milked. Should it die, then the charges are written off - if it is
only one. The following table shows the common modes of payments for services and the
associated challenges.
REPORT FOR BDS DIAGNOSTIC IN RWANDA 36
FIT RESOURCES JANUARY 2009