The State of the Dairy Sector in Ghana

2018

English

The primary objective of this consultancy was to assess the dairy value chain in Ghana. Specifically, the consultancy was to do the following: first, give an overview of Ghana’s livestock in general and dairy sector in particular and assess its contribution to the Ghanaian economy, estimate production by species and describe its evolution over the last two decades, estimate imports (by type of dairy products), and estimate consumption and its evolution over the last two decades. Second, assess the dairy value chain including structuring of collection, number of functional collection centres, number of dairy, mini dairies including industrial dairies using milk powder, map value chain, and describe the role of women in the value chain. Third, give an overview of dairy policies including a brief history of dairy projects over the last two decades, describe dairy products in progress, present an overview of fiscal and commercial policies including import duties, taxes, rules and standards in force. Four, provide a sense of what the future of the dairy sector will be. To provide the information required, several methods were used to generate the required data. Literature was reviewed, key informants were interviewed, and a rapid market survey carried out. The livestock sub-sector contributes meat, milk, manure, and animal power to the economy of Ghana. On average, the contribution of the livestock to Agriculture GDP, between 2011 and 2017, is 5.4 percent. The livestock production system is either extensive, semi-intensive or intensive. Milk production in Ghana is exclusively from cattle. The predominant livestock/milk production system is extensive. The main cattle breeds in the production systems are the West-African Short Horn (WASH), and the Sanga which is a cross between the WASH and white Fulani. Milk yields in the extensive production system based on local breeds is not high. The more intensive systems are based on either crosses between local breeds and exotic breeds (for example Sanga Friesian crosses), or pure breeds like Jerseys. In spite of the low milk yields, significant volumes of milk can be collected from various kraals. The volume of milk production has been fairly constant (36,000 – 43,000 tonnes per annum) over the past two decades. On the other hand, imports of milk and milk products have been soaring with milk powder been the main product that is imported. Other milk product imports include cheese, evaporated milk, condensed milk, and fresh whole milk. The supply of all milk products (comprising local production and imports) had generally being rising. Generally, there are two distinct dairy value chains, one based on local fresh milk as raw material for processing and the other based on imported milk products particularly milk powder. The actors in the value chain based on local fresh milk include herdsmen and cattle owners, at the production level, herdsmen’s wives (as processors), itinerants who go from kraal to kraal to collect milk, fura sellers who sell milk with cereals food products, and household consumers as final consumers. There is hardly any functional milk collection centre where milk is sent for bulking and chilling. In this value chain, mini processors may receive milk supply from producers, or itinerants which they use to process dairy products, mainly yoghurt. The processors are often women. Also, women hawk milk and milk products to final consumers. In the value chain based on imported milk powder, big processing companies are often themselves importers. Also, there are two types of companies, those that reconstitute milk from imported milk powder, water and other ingredients, and those that use the imported milk powder to produce yoghurt and ice-cream. Several mini dairies also process yoghurt from milk powder. Over the last two decades, several projects had been implemented to improve the livestock sector in general, and the dairy sector in particular. Projects that targeted livestock generally dealt with disease control, and fodder bank establishment. Aspects of projects that dealt with dairy in particular related to the establishment of pilot milk collection schemes. Bulk tank and chilling facilities were provided to some government organisations that were to serve as the pivot of the scheme. Follow up projects implemented training programmes for milk processing in selected areas of the country. Non-governmental organisations also imported and distributed Jersey cattle among farmers for milk production. Currently, few projects exist that target the livestock sub-sector. The on-going planting for food and jobs programme targets the livestock sector only to the extent that surplus cereals and legumes could provide feed for livestock. Milk and milk product imports are generally subject to import duty and taxes like Value Added Tax (VAT), National Health Insurance Levy (NHIL), and the educational reform tax. However, import duty level varies depending on the type of milk product imported. The Food and Drugs Authority (FDA) has laid down regulations that guide the operation of food processing companies. Growth in the output of local fresh milk is slow. Thus, growth of dairy product output in the value chain depending on local fresh milk is likely to remain constant or grow only slightly. On the other hand, growth in dairy product output in the value chain based on imported milk products is soaring, judging from the increasing levels of milk powder over the last two decades. To promote growth in the value chain that depends on local fresh milk, steps need to be taken to improve milk production, and collection. Then small and medium scale enterprises can be encouraged to go into dairy products production, particularly yoghurt production.

Guri, B. Z.; Ameleke, G. Y.; Karbo, N.