The Impact of Blending Pay-for-Results Incentivized Inputs and Dairy Advisory Services in Tanzania

September 19, 2022

photo of a baby calf

Of the many threats that Tanzania’s dairy sector faces, disease is one of the biggest. Parasitic, viral, and bacterial diseases not only limit livestock productivity but also increase animal mortality. For example, tick-borne diseases cause about 72% of annual cattle mortality in Tanzania. In theory, these diseases can be controlled by drugs and improved animal health services; in reality, most smallholder dairy farmers have limited knowledge of the necessary practices to manage their animals’ health.

This limited knowledge, combined with an historical struggle to acquire productivity-enhancing inputs on the market to prevent parasites and diseases, has affected animal health, reduced milk production, increased animal mortality, and had economic consequences for smallholder farmers. However, by increasing access to high-quality inputs, including vaccines and parasite control, as well as learning proper practices to use them, smallholder farmers can improve the health of their animals – increasing productivity and incomes.

The AgResults Tanzania Dairy Productivity Challenge Project is a four-year Pay-for-Results prize competition that encourages private sector input suppliers to sell productivity-increasing inputs to smallholder farmers. By providing a prize for each bundle of inputs delivered by participating input providers (competitors), the competition plans to increase animal health and productivity, boost smallholder farmers’ income, and strengthen value chain relationships between dairy producers and the formal dairy sector. Eligible inputs include parasite control, nutrition, vaccines, and artificial insemination (AI). Importantly, to qualify for a prize, competing input providers must provide embedded advisory services with the bundles.

Competitor Approaches to Using Advisory Services

In Sales Periods 1 and 2, competitors used advisory services to promote smallholders’ use and understanding of these inputs. Competitors have increased the number of farm visits conducted by their extensionists, resulting in more diverse as well as repeat sales and improved relationships among smallholder farmers and competitors. Some competitors have even opened additional retail outlets in remote regions of the country for farmers who previously did not have access to improved inputs or advisory services. These advisory services help farmers to not only understand the importance of adopting these inputs but to see results.

As part of their strategy to proactively provide advisory services to smallholder farmers, competing input suppliers have incorporated a range of other activities, such as establishing good recordkeeping practices to support their business operations, using professional veterinary technicians specifically for AI and vaccination services, and providing extensionists with tools and equipment as they provide services to smallholder farmers. These actions are helping competitors to earn the trust of their farmer clients, strengthening relationships along the value chain and the overall enabling environment.

Case Study: Damian Agrovet Invests in Stronger Relationships with Farmers

Like other leading competitors, input provider Damian Agrovet has enthusiastically embraced providing advisory services in Sales Period 1 and 2 to equip farmers with the knowledge and skills that they need. By recruiting professional extensionists in the Gairo District, the company has provided advisory services to individuals and groups through frequent farm and village visits. Through these visits, Damian has seen repeat sales of inputs as well as improved livestock management among participating smallholder farmers.

With these higher sales and stronger relationships built during the more frequent farm visits, tick infestations and mortality rates have dropped while milk production has significantly increased. As a result, Damian has earned farmers’ trust and is further investing to manage these new and improved relationships. The company upgraded their recordkeeping system to better monitor farmer progress and ensure that they are receiving the appropriate inputs at the right time. To expand their services, they have purchased motorbikes, smartphones, and other equipment so that extensionists can provide prompt, exceptional services to the farmers in remote regions that were previously unserved.

Input Suppliers’ Investments are Translating into Noticeable Change

As the Damian example shows, using improved advisory services has resulted in significantly higher sales of productivity increasing inputs during the first two sales periods. For example, from Sales Period 1 to Sales Period 2, sales of vaccine and parasite control bundles rose 83.74% and 66.22%, respectively. Equally importantly, smallholder farmers are observing first-hand the changes experienced from using vaccines and parasite control inputs.

They have reported that: 

By providing advisory services required by the AgResults competition, competitors are starting to teach smallholder farmers the importance of livestock management and the value of productivity enhancing input bundles. As farmers in Tanzania gain access to these inputs and receive regular advisory services, their knowledge of livestock management is improving as is their use of vaccines and parasite control inputs, resulting in healthier and more productive cows.

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