The dairy sector in Tanzania has an enormous potential to reduce poverty:
• Tanzania’s gross domestic product (GDP) growth rate has been between 6-7.8% per annum in the last 10 years.
The livestock sector’s share of total GDP is approximately 5.4%, and it accounts for 28-30% of value added. On
the other hand, the dairy sector accounts for 30% of the livestock contribution to agricultural GDP. Considering
that Tanzania has the second largest cattle population in Eastern Africa and the third largest in Africa (estimated at
21 million and mostly owned by smallholders and pastoralists), the country’s dairy sector has a high potential in
contributing to poverty reduction and rural development.
• Most rural households own livestock and are involved in agricultural activities: 60% of these households on average
derive 22% of their income from livestock activities. Women’s participation in livestock activities tends to be
oriented towards the selling of milk.
• The value of per capita of urban livestock and dairy product consumption is twice than those of rural households.
This difference in urban and rural livestock product consumption provides an opportunity for rural livestock
producers to increase their production to serve Tanzania’s growing population and demand for animal-sourced
products.
• Compared to other countries in the region, Tanzania’s current annual milk consumption of 45 litres per capita
is low. To encourage milk consumption, the country has to support various promotional events and programs,
including school feeding. But ultimately, in general, it is the increase in disposable income that can have a significant
impact on the consumption of dairy and animal-sourced products.
• Markets of fluid milk remain largely informal and fragmented. The formal market, characterized by a low level of
capacity utilization and vertical coordination, is composed of a number of processors that face various challenges,
including seasonality of milk supply, power outages, competition from imported milk products and low domestic
consumption of milk and dairy products. Meanwhile, the informal market dominates in the marketing of fluid milk
consumption.
• While there are opportunities for many livestock keepers to meet the growing demand for milk and dairy products,
there also are several challenges related to productivity and consumption, which include the following:
High incidence of animal diseases and limited access to veterinary services. The government-priority animal diseases
related to cattle include contagious bovine pleuropneumonia (CBPP), east coast fever and brucellosis. Vaccination
rates are low, especially among poor female-headed households. Since there are few animal healthcare providers in
the country, preventive animal health services and infrastructure are poor and underfunded. Hence, the process of
reporting diseases needs to be simplified, and it is imperative to improve the coordination between local and central
government structures for more efficient disease control.