Informal milk markets in Kenya, Tanzania & India

This report “Informal milk markets in Kenya, Tanzania and Assam (India): an overview of their status, policy context and opportunities for policy innovation to improve health and safety“(2020, 34pp) reviews the situation of informal milk markets in three countries to better understand the opportunities for policy innovation to work with informal milk sellers to improve their health and safety practices. It is based on an extensive review of available literature and a small number of expert interviews.

Informal economic activities operate outside the formal reach of the law or where the law is not enforced or discourages compliance because it is inappropriate, burdensome or imposes excessive costs. Small-scale milk businesses operate at different points along a spectrum of informality – from those selling raw milk without any licences to those selling packed and pasteurised milk.

Milk production in the three countries is predominantly informal and small-scale, done by smallholder farmers and pastoralists. The informal sector usually pays more to producers than the formal sector and pays in cash on collection – a key attraction. The informal sector dominates dairy marketing. Most informal milk is consumed by low-income consumers, yet their rates of consumption are still lower than the recommended per capita consumption. Informal milk production and trade contribute significantly to employment, livelihoods and nutrition of poor people.

However, legitimate health and safety concerns exist, since milk is highly perishable and can contain disease-causing parasites, bacteria, antibiotic residues and aflatoxins.

The review shows that current policy approaches are poorly equipped to address the persistent reality of informal dairy markets. Inappropriate policies may increase the cost of milk to the disadvantage of consumers and may actually decrease milk safety. Training and certification schemes offer a possible policy alternative that reconciles the needs of governments for better oversight of the informal sector, of vendors for better livelihoods and freedom from harassment, and of consumers for affordability, taste and safety.

Posted on 14 October 2020 in Pastoralism & Marketing, Pastoralist Livelihoods & Nutrition