Summary of RQ5-7: A feasible upgrading of Twawose’s value chain?

RQ5) What opportunities and constraints are present in Twawose’s value chain, and how do these influence competitiveness and upgrading?

RQ6) Which upgrading strategies can improve Twawose’s value chain, and how are they linked to asset and governance structures present in the Twawose chain?

RQ7) What action points can be identified to implement suggested upgrading strategies, and is Twawose capable of implementing them?

80 This sub-chapter on upgrading strategies has emphasized some of the key constraints and opportunities in Twawose’s value chain. Currently, this local dairy value chain is competitive because there is no direct competition from other similar products in the area. There is limited milk availability and Twawose makes up the biggest supply of both milk and, now, goat milk yoghurt. It has been showed that there is a potential in the amount of goat milk to upgrade the chain. This is followed up by an expressed wish to upgrade the chain from Twawose members because they want to deliver milk every day and not only 1-2 days a week. There are, however, several constraints to developing the value chain due to its location in a rural and mountainous area with poor road quality, no access to electricity and limited access to information. These are all examples of how assets influence upgrading. As previously mentioned, there is both potential supply and demand to extend the local market and also to eventually enter the urban Morogoro market. These opportunities, together with Twawose’s motivation to succeed and desire to continue to develop their value chain, and their network, can serve to overcome the challenges they face, like no electricity, need for improved packaging and improved coordination in the chain.

Many upgrading strategies that are necessary to achieve Twawose’s goal of substantially increasing the goat milk yoghurt production, have been suggested and followed up by action points. Both process and product upgrading strategies have been suggested. Improved processing strategies are enhanced horizontal coordination among dairy goat owners through establishing a mini collection center in Tchenzema, improved coordination in between the links by strengthening the use of contracts that facilities better communication between processors and suppliers of goat milk. Hiring a MCPC manager has also been suggested. These all relate to the governance of the chain. Product related strategies are for example the use of cooling and improved packaging to enhance quality, which is linked to lack of assets. Packaging can also be considered a functional upgrading strategy since it adds value to the product. These strategies are meant to deal with the assets lacking in Twawose value chain, such as electricity and packaging, by using the asset making up Twawose’s, as the chain leader, strengths: their strong sense of community, motivation, entrepreneurial mindset and network. Also chain upgrading has been suggested. The new links represent this upgrading and include establishing a mini collection center, new distribution strategies, new market outlets and new consumers.

The development of Twawose’s value chain depends on Twawose’s capability to activate and utilize their human and social assets. The expansion of the chain depends on hard work, collective work, smart decisions and, last but not least, a substantial amount of investment. It is crucial that Twawose actively make use of their network to access the amount of money they need. Twawose can

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implement some strategies and action points, but others that require access to information, cost knowledge and large investments, a chain integrator¹⁷ would be beneficial.

A chain integrator can be an NGO, a university, researchers, an idealistic person that wants to help out, government agents such as extension workers or a small-scale business development consultant. In Twawose’s case, the local extension worker does not have the capacity to facilitate the upgrading process because of many focus areas and limited resources. Twawose has had fairy good cooperation with SUA. A continued extended cooperation with SUA may be a viable alternative. If a chain integrator, such as SUA or others, are further involved, it is vital that they do not take control of the value chain so that Twawose looses ownership, which may result in less motivation to succeed. Loosing ownership, or never having ownership of their value chain or small business, is one of the challenges when chain integrators are involved either from the beginning or when expanding the value chain as in Twawose’s case. MGBA experienced this for example. Farm Africa initiated the production of goat milk yoghurt production, but by being too much in charge of decision making, the dairy goat owners do not feel ownership of the value chain and the chain is not economically viable because decisions have been made based more on supporting poor farmers than on business principles. Now, when MGBA is handed over full control of their diary value chain that constitute a big challenge. The goal in Twawose’s case should therefore be to work together with external supporters, but not letting anyone other than Twawose members control the chain, except if some nodes are outsourced. And, at all times, decisions should be based on sound economic and business principles to ensure the continuation of an economically sustainable value chain.

An economically viable chain depends on training of the Twawose leadership in business management and economics, and/or hiring a knowledgeable MCPC manager that can be in charge of the chain development. If, or when, Twawose receives investment for realizing upgrading strategies such as setting up solar panels, this cannot be a loan that has to be paid back because it will most likely be difficult to do so. For the large investments, Twawose depends on grants. Grants can be used to enable them to carry out market assessment, and to strengthen skills. Grants spent on packaging (except for trial purposes or equipment), or transport is unlikely to promote economic viability, and in Twawose’s case they should use their profit and apply for a loan if necessary to acquire for example packaging materials. The point is that the value chain will probably not survive heavy debt, and therefore depends on grants. Grants on the other hand should not be given for

17 The term ’chain integrator’ is a generic term that in this case should be understood as the role played by different stakeholders that work with the value chain actors with the goal of driving the development of the chain so it becomes more efficient and competitive.

82 everyday activities. To conclude, Twawose’s value chain has potential to be further developed by using opportunities and strengths to overcome constraints. They also have the capability to implement some upgrading strategies, but need support from their current network or others to realize upgrading strategies and action points.