With millions at stake and climate pressures mounting, a bold new program seeks to reinvent dairy farming across Kenya, Tanzania, Rwanda, and Uganda.
By Correspondent | July 2025
In a bold step toward climate resilience and food security, the Green Climate Fund (GCF) has approved a landmark $358.26 million program aimed at transforming the dairy industry in East Africa. The initiative—Dairy Interventions for Mitigation and Adaptation (DalMA)—will span Kenya, Tanzania, Rwanda, and Uganda, targeting over 2.5 million beneficiaries and promising sweeping reforms in how milk is produced, processed, and distributed in the region.
Announced during the 42nd GCF Board session held in Port Moresby, Papua New Guinea, the program will be implemented by the International Fund for Agricultural Development (IFAD) in partnership with the FAO and participating governments. The objective: build a climate-smart, efficient, and commercially viable dairy sector in a region where milk demand is rising—but supply systems remain inefficient and vulnerable.
A Sector Ripe for Transformation
East Africa is home to a rapidly expanding population and a growing middle class that has developed a strong appetite for dairy products. In 2023 alone, Kenya, Tanzania, Uganda, and Rwanda collectively produced approximately 14 million metric tons of milk—more than a quarter of Africa’s total output.
However, the region’s dairy industry remains constrained by low farm productivity, informal markets, and poor infrastructure. Most milk is produced by smallholder farmers using traditional methods, resulting in low yields and significant post-harvest losses. According to FAO data, as much as 80% of dairy trade in the region flows through informal channels, lacking preservation or quality control.
DalMA aims to change that.
Key Pillars of the DalMA Program
The program brings together a suite of strategic interventions:
- Promotion of climate-smart livestock farming, including improved rangeland management
- Manure valorization through biogas and organic fertilizer production
- Support for national dairy policy reform and greenhouse gas monitoring
- Investment in value chains, from milk cooling to processing and market access
IFAD’s ambitious targets include a 29% reduction in GHG emissions intensity from dairy farming and a 34% increase in milk production—goals designed to be mutually reinforcing in the face of climate pressures.
National Commitments and Regional Vision
The DalMA initiative complements ambitious national efforts already underway:
- Kenya has adopted a new dairy roadmap aiming to double production by 2030.
- Rwanda has pledged $100 million by 2029 toward dairy development.
- Tanzania recently launched a $74.3 million program targeting smallholder support.
- Uganda is working to boost domestic capacity as local demand continues to outpace supply.
The region is also embracing value addition, with a growing variety of processed dairy products—UHT milk, yogurt, cheese, milk powder—now hitting shelves. Meanwhile, intra-regional trade has grown, fueled by improved transport links, harmonized standards, and streamlined customs procedures.
Financing the Future
The African Development Bank (AfDB) has announced plans to raise $1.2 billion by 2025 to support the dairy sector across East Africa. These funds will be used to modernize milk collection and processing facilities, increase capacity, and unlock market opportunities for small-scale producers.
But challenges remain. Inadequate access to quality feed, genetic improvements, and poor farm management still hamper productivity. Logistics—especially milk collection and chilling infrastructure—pose another major bottleneck.
Still, with a coordinated regional approach and multilateral support, East Africa’s dairy sector may finally be poised to deliver on both its economic promise and sustainability potential.
From Milk to Market: A New Model Emerges
DalMA is more than a funding announcement—it’s a model for climate-smart development. It represents a shift from viewing agriculture as a climate victim to positioning it as a solution. In doing so, it could help reframe the narrative for rural development across Africa and beyond.
If successful, DalMA could serve as a blueprint for other sectors—demonstrating how investment, innovation, and international cooperation can come together to transform not just markets, but lives.
Editor’s Note:
This program reflects a growing trend among multilateral institutions to combine climate finance with food systems reform—a strategy gaining momentum as climate change threatens agricultural stability across the Global South.