The 13 white Zimbabwean farmers, who run Shonga Farms in Kwara State, knew in 2004, when discussions about their doing business in Nigeria commenced that they would sell their fresh milk to local dairy manufacturing companies. Of course, such foresight was expected of urbane business people that they are.

Same argument cannot be advanced for our local Fulani milk farmers who have, for centuries, limited themselves to retail sales to consumers. In fact, the Fulani's main products are 'wara' - cottage cheese and 'fura-de-nono,' popular delicacies among locals. It is therefore good news that these Fulani farmers, like the dairy farm unit of Shonga Farms, are now suppliers of fresh milk to dairy milk frontline company, FrieslandCampinaWAMCO plc.

FrieslandCampinaWAMCO Nigeria, maker of Peak and Three Crowns milk, signed a memorandum of understanding on sourcing fresh milk with Shonga Dairy Farms in Ilorin, in 2010. The company decided then to do this, according to Bob Steetskamp, the company's managing director, because it realised that "milk production in Nigeria is low and the development process will take time.

"This needs the support of the government and substantial investments in live stock and equipment. It requires our professional attention and determination to succeed."

He said his "company was committed to making the Dairy Development Programme a success, by ensuring the transfer of technology know-how on milk production to Nigerian farmers."

Steetskamp told BusinessDay that it was the policy of FrieslandCampina WAMCO to increase local content to get more balance between imports and local sourcing for reasons of exchange rate and world market prices, explaining that "we all know that the naira/dollar rate is vulnerable and if we import too much and we have to pay in dollars, the naira rate could affect our result and, therefore we rather buy locally in naira. That is one reason.

"The second reason is that if we import dairy raw materials then you are depending on the world market prices, and they are set by supply and demand. If demand in Brazil, China or Oceania goes up and the supply goes down, the price goes up. As a matter of fact, we do a lot of local sourcing. Most of the ingredients, all the palm oil, all the cocoa powder are all sourced locally. The only thing we cannot source locally yet to the extent that we want is dairy raw materials. Therefore, we started this dairy development programme, which means that we oblige ourselves to take all the local milk that there is and even more."

The Fulani farmers, as they are now, do not have the infrastructural muscle to do efficient supply to the company, and as such, the company is empowering them for this business operation. How?

According to Steetskamp, "what we do is that we build a milk collection centre regionally. So, we have built one now in Oyo State, which is made up of milk collection centre and cooling equipment. There we collect milk produced by small-scale farmers; they come with buckets of 10 litres everyday and they deliver the milk. First of all, we gather the milk into a quantity of a 1000 litres so that we can transport it efficiently.

"Secondly, we cool it down. We now have three milk trucks driving around the country to collect the milk at the milk collection centres at five degrees. Also, we have a memorandum of understanding with the Ministry of Agriculture, which supports farmers' education and organisations. So, logistically we collect the milk, we cool it down and we pay the farmers every week.

"We support them in their production by giving them know-how, teaching them hygiene and teaching them how to milk the cow and how to get the highest production from the cow."

Steetskamp said his company was currently operating the project at a loss, but explained: "It costs more now than it should. The landing cost of a litre of milk when we import it is about N70-N80. Currently, we pay up to N90 and we even subsidise above N90 for some farms. So, currently we are paying more than when we were importing it, but that is just to get it started. We are happy to subsidise it just to get the system started, but eventually it would go down."

To ensure high quality product is supplied, the company trains the farmers. Sourcing from Shonga Farms started in August 2010. "To be honest, by August when we started it was of terrible quality, but by training the farmers on hygiene, cooling the milk, within only four months, we were at a level of European farmers. So, that proved that even in African conditions when you have the right hygiene, you would get good quality milk," Steetskamp said.

The Fulani and milk

Ismail Iro, Ph.D., founder of GAMJI.COM, related: "The selling of animals and the selling of dairy products is widespread among the Fulani. The traditional pastoral sector is noted for the production of milk; the vending of milk is the most important economic preoccupation of the Fulani. Milk selling, however, faces many challenges in Nigeria. Fresh, boiled, or curdled, milk is consumed by the Fulani and by the rural population.

"The Fulani women monopolise the local dairy production in Nigeria, although they own only a few of the family's cattle. Pastoral women, whose liking for milk ranges from mild to excessive, sell milk and cooked millet balls called Fura in Northern Nigeria and Southern Nigeria largely settled by the Hausawa. Every Fulani man must give his wife or wives enough cows to milk, or risk his marriage. The Fulani milk the cows twice a day in the wet-season, collecting about 1.5 litres of milk per cow. In the dry season, milking is suspended or reduced to just once a day."

Milk women keep the proceeds from dairy sales, which they use to buy grains, seasonings, flavourings, beverages, vegetables, food utensils, cooking oils, and other household goods. However, the women's purchase of such items for the family is voluntary. The Fulani men do not count on the Fulani women's contribution in family upkeep for fear of being reproached as failing household providers.

Since women control the income from milk sales, men, who own the herds and do most of the herding tasks, frown at women for over-milking the cows. The men are concerned that if much milk is extracted from a cow, the calves will be under-nourished and prone to diseases. Thus, men are indifferent at best to innovations that lead to increasing milk off-take. Any dairy policy that ignores the concern of the Fulani men about milk production is likely to fail.

The nature of supply, demand and consumption of milk

Milk is the most frequently used cattle product, however, many families cannot get enough for daily nourishment. Although traditional dairying in Nigeria started centuries ago, industrial dairying is recent. In 1945, the last colonial Chief Veterinary Officer of Nigeria, H.H. Wells, reported to the Home Office in London that Her Majesty's Empire in Nigeria had developed much interest in dairying and was supplying cheese and butter to Allied Forces in Morocco.

Reports indicate that Nigeria has the potential of being a major milk producer in Africa. Using improved methods of storing, processing, packaging, and transporting, milk output can be raised substantially for internal use and for export. Nigeria is the largest milk producer in West Africa and the third largest producer of cow milk in Africa, thanks to our nomadic and semi-nomadic Fulanis. Africa contributes just over 2 percent of the world's milk supply. Milk accounts for 20 to 25 percent of the agricultural sector in sub-Saharan Africa, 2 percent of its calories, 33 percent of its calcium, and 4 percent of protein for its people.'

Shonga Farms Holding Limited was incorporated as a Special Purpose Vehicle to facilitate public-private partnership in respect to the commercial farming project of Kwara State government under the leadership of the former governor, Bukola Saraki. Shonga Farms was specifically established to finance activities in the farm. The five banks involved in the financing of this initiative are GTBank, Unity Bank, defunct Intercontinental Bank, FinBank, and BankPHB.

The banks own 75 percent equity while the state government owns 25 percent equity. The Shonga Farms Holding on the other hand owns 60 percent equity in each of the 13 farms, leaving the farmers with 40 percent equity.

The Shonga Farms Holding Nigeria Limited, through its subsidiaries, engages in mixed, diary, and poultry farming, producing commercial crops such as maize, rice, cassava, ginger, soya bean, milk, and poultry meat.