Abstract:
There have been remarkable efforts to promote innovation and inclusive value chain
development so as to facilitate the integration of smallholder dairy farmers into high value chains.
In Tanzania this endeavour has mainly focused on enhancing linkages between small holder dairy
farmers and milk processors. This article compares and contrast the way small scale dairy farmerprocessor relationships affect chain upgrading in two milk shed areas in Tanzania. Findings
reveal that well-managed dairy co-operatives are appropriate means for enhancing horizontal coordination in the dairy industry and could be more relevant for achieving the upgrading through
efficient and effective management of production and marketing functions to make the entities
more competitive and resilient to market shocks. Ensuring dedicated technical support towards
identifying appropriate business models for more effective engagement with milk processors
and other chain actors is the best strategy to enhance the performance of dairy co-operatives
and promote farmers’ linkage to milk processing plants. The findings show that value chain
champions can leverage livestock extension services and support smallholder dairy farmers to
upgrade. Interventions pioneered by value chain champions are seen to be more effective when
geared towards self-selected and committed dairy farmers than generic interventions targeting all
smallholder dairy farmers.
