Cooperative Development Program Semi-Annual Report

in East Africa, with a focus on Kenya and Rwanda. The program aims to determine how dairy farmers in the region are responding to increasing global demand for milk. The project began in 2010 and was initially scheduled to close in September 2015, but was extended for one year. In July 2016, a draft modification was received to extend the project for two more years. The development challenge faced by dairy cooperatives in East Africa is increasing global consumer demand for milk and dairy products, which is attracting domestic and international competition for milk producers. Dairy cooperatives must compete with private sector processors, informal sector traders, and vendors in the marketplace, as well as for farmers' milk. In response to this competition, some dairy cooperatives have succeeded in horizontally and/or vertically integrating their operations to achieve scale, increase their competitive position in the marketplace, maximize returns to members, and engender member loyalty. CDP is testing the development hypothesis that dairy cooperatives that achieve and leverage economies of scale through horizontal and/or vertical integration increase their commercial viability and competitiveness, and provide greater socio-economic returns to farmer-members, especially women farmers. The project has contributed directly to the achievement of the Project Objective: Increased access to self-reliant cooperative enterprises that meet the evolving needs of their members and contribute to improved quality of life for members, communities, and nations. Over the project timeframe, Land O'Lakes has assisted dairy cooperatives in East Africa to respond to evolving market conditions and increased competition by sustaining economies of scale through horizontal and vertical integration. The project originally had two primary indicators, one for cooperatives and one for cooperative members. The primary indicator to measure progress benefiting cooperatives is change in sales revenue for participating cooperatives. CDP measured this indicator for two cooperatives in Kenya that have remained in partnership with the CDP program over the five-year period 2010-2015. Over that time period, cooperative revenue has grown by 590%, far exceeding the target of 25%. Scale and integration have also enabled the partner cooperatives to remain competitive in the marketplace and retain member loyalty. The primary indicator and target for tracking benefits to cooperative members of scale and integration is: Household dairy income of integrated cooperative members increased by 20 percent (sex disaggregated by female-headed households). Over the original five-year period, household dairy income increased by 18.9%, just short of the target value of 20%. During the reporting period, CDP has been helping build cooperative capacity through a combination of knowledge dissemination, diagnostic tools, and short-term technical assistance. The program has been working with dairy cooperatives in Kenya and Rwanda to improve their business processes and member engagement, enabling them to compete effectively in the marketplace. CDP has also been tracking financial data, including cooperative revenue and household dairy income, to measure the impact of the project. The Cooperative Law and Regulation Initiative (CLARITY) is a collaborative activity of CDP, aimed at improving the regulatory environment for cooperatives in East Africa. The initiative has been working with governments, regulatory bodies, and other stakeholders to develop and implement policies and regulations that support the growth and development of cooperatives. The Research Center is another collaborative activity of CDP, which aims to conduct research and provide technical assistance to cooperatives on issues related to cooperative development and dairy production. Staff management is an essential component of CDP, and the program has been working to build the capacity of its staff to implement the project effectively. The program has been tracking key performance indicators, including the number of cooperatives assisted, the number of farmers trained, and the amount of revenue generated by participating cooperatives.