24 pages, Soybean (Glycine max (L. Merr.) has been a crop of interest to address both poverty
and malnutrition in the developing world because of its high levels of both protein and
oil, and its adaptability to grow in tropical environments. Development practitioners
and policymakers have long sought value added opportunities for local crops to move
communities out of poverty by introducing processing or manufacturing technologies.
Soy dairy production technologies sit within this development conceptual model. To
the researchers’ knowledge, no research to date measures soy dairy performance,
though donors and NGOs have launched hundreds of enterprises over the last 18 years.
The lack of firm-level data on operations limits the ability of donors and practitioners
to fund and site sustainable dairy businesses. Therefore, the research team developed
and implemented a recordkeeping system and training program first, as a 14-month
beta test with a network of five dairies in Ghana and Mozambique in 2016-2017.
Learning from the initial research then supported a formal research rollout over 18
months with a network of six different dairies in Malawi and key collaboration from
USAID’s Agricultural Diversification activity. None of the beta or rollout dairies kept
records prior to the intervention. The formal rollout resulted in a unique primary dataset
to address the soy dairy performance knowledge gap. The results of analysis show that
the dairies, on average, achieve positive operating margins of 61%, yet cannot cover
the fixed costs associated with depreciation, amortization of equipment and
infrastructure, working capital, marketing and promotion, and regulatory compliance.
The enterprises in our sample operate only at 9% of capacity, which limits their ability
to cover the normal fixed costs associated with the business. The challenge is not the
technology itself, as when operated, it produces a high-quality dairy product. The
challenges involve a business that requires too much capital for normal operations
relative to a nascent and small addressable market.
