Milking it

There’s no God-given right for small businesses to succeed but there are occasions when their failure to do so makes you wince. Such is the case with the Laiterie du Berger, which has been trying to make a go of it in the Senegalese dairy sector.

The company was set up in 2006 to try and exploit Senegal’s dependence on imported milk powder. The country had no effective industry as the hundreds of small scale producers struggled to sell to the wider market and, by and large, kept their milk for local consumption. And while their milk was drunk in the villages, the sacks of milk powder kept flowing into the ports in the capital, Dakar.

There was an opening there for an enterprising team to exploit and a group of young vets and entrepreneurs, headed by Bagore Bathily, decided to give it a go. They raised capital, some of it on the international stage, invested in a plant in the north of the country where the majority of the dairy farmers were based, organised the collection of fresh milk and processed it. The end products – milk, butter and yoghurt — were shipped south to Dakar and the other main urban centres.

As many as 600 farmers signed up, and began to benefit from having a proper partner who could do the hard work – getting their goods to market. For eighteen months all looked good. But the odds were stacked against them. The milk importers were given a VAT rebate on their foreign goods, while Laiterie du Berger had to carry the tax on its locally-produced product. With such a competitive disadvantage, it has been struggling in recent months to build on its original successes.

All sorts of issues are raised by protectionism. But almost all the experts I have spoken to over the past week, from management consultants to agricultural advisers, have told me that the African farming industry needs help in the face of international competition. Whether it be rice or onions or milk, the small-scale producers in Senegal need some breathing space to build from the subsistence level to the national level. And until Africa can feed itself, the continent will struggle to take the next step forward. All these issues remain on the table at the ongoing round of World Trade talks.

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