Lack of Regulations Affects Market Entry: an Example From Rwanda

In 2013, Rwanda’s dairy sector comprised approximately 15 percent of its agricultural gross domestic product (GDP) and six percent of overall national GDP. At that time, the government of Rwanda introduced a program to provide 350,000 poor families with one dairy cow each, adding to the 110,000 Rwandan smallholders that already owned cows. The goal was to increase dairy production to improve nutrition and lift farming families out of poverty, while contributing to national economic gains.

However, a common bacterial infection in dairy cows called mastitis had spread to just over half of cows in Rwanda. The estimated economic losses due to the infection added up to $6.9 million annually. To get the biggest impact for Rwandan government’s dairy cow program, the mastitis problem needed a solution. Feed the Future Partnering for Innovation, through a competitive solicitation process, made a technology fund award to US company PortaScience to introduce its low-cost, dipstick mastitis test to Rwandan smallholder farmers.

What is Mastitis and What is PortaSciences’ Low-Cost Solution?

Mastitis easily spreads from cow to cow. When left untreated, the infection reduces milk production and can potentially prevent cows from producing milk entirely. This can lead to devastating losses for smallholder dairy farmers who typically depend on only a few cows to provide milk for both household consumption and income. Mastitis affects up to 40 percent of the roughly 35 million dairy cows in East Africa. While most Rwandan farmers know about mastitis, they generally do not realize its impact on production volumes or how to identify and treat the disease. Most consumers are also unaware of the issue of mastitis in their milk supply.

UdderCheck, an inexpensive dipstick that takes two minutes to detect an enzyme in milk that is a precursor to mastitis, offered a low-cost solution. When used routinely, UdderCheck allows farmers to detect the treatable pre-clinical phase so that milk quality and production are not affected. Other devices are available but cost more, require more time and training, and can only detect mastitis after it has infected a lactating cow.

Enabling Environment Opportunity

In 2013, Rwanda lacked regulations on bacterial count limits in milk. This meant that without regulatory and market pressure, PortaScience lacked an important incentive for farmers and dairies to identify and treat mastitis. In the end, PortaScience was unable to find a business model that covered the cost of operations, having sales of only $6,000. It decided, due to lack of product uptake and further funding, to end its Rwanda market initiative.

De-risking Private Sector Market Entry

Enabling environment issues can incentivize technology market entry in ways that promote food security. In the case of PortaScience, due to the timing of its market entry, an effective and inexpensive solution to a chronic problem facing all dairy farmers was unable to establish the needed market toehold to successfully launch in Rwanda.