Inclusive Dairy Business Models in East Africa

With the increase in demand for milk and dairy products in the coming decade, both in quantity and quality, dairy offers very good prospects for both entrepreneurial smallholders as well as for medium and large-scale farmers in developing countries. At this moment, but also in the coming years, smallholders will produce the bulk of the milk. Sustained fair inclusion of commercial smallholders in the growing formal dairy sector will only be possible if they meet volume and quality requirements, through well-organized bulking and chilling activities and further improvement of productivity and seasonal stability. This implies that more work needs to be done on the development and realization of inclusive business models, either by farmer organizations, progressive processors, other value chain actors, or blends of these. The dairy sector in East Africa can reach sustainable growth through the adoption of inclusive business models (Makoni et al., 2014). Innovative approaches to dairy sector development are emerging where inclusive business models are coupled with demand-driven, market-led support systems and public-private partnerships (Rademaker et al., 2017).