A major investment into East Africa’s dairy sector is set to bring lasting economic and environmental benefits to millions of rural people. The International Fund for Agricultural Development (IFAD) and the Green Climate Fund (GCF) have signed a landmark agreement securing US$150 million from GCF towards the US$358 million Dairy Interventions for Mitigation and Adaptation (DaIMA) programme. This initiative will directly support 2.5 million smallholder farmers in Kenya, Rwanda, Tanzania and Uganda and indirectly benefit over 15 million people across the dairy value chain.
This programme is designed to build climate resilience in a sector that is both highly vulnerable to environmental shocks and a contributor to greenhouse gas emissions. By supporting smallholder dairy farmers with practical tools and sustainable approaches, the programme will strengthen rural livelihoods while reducing the environmental footprint of dairy production. It will improve access to veterinary care, breeding services and climate-related information to help farmers manage their herds more effectively in a changing climate.
East Africa’s dairy sector faces increasing threats from prolonged droughts, extreme rainfall, flooding and rising temperatures. These events reduce the productivity of dairy cows and expose farmers to higher levels of income instability. The DaIMA programme is timely in addressing these challenges. Its interventions will include the adoption of climate-smart agricultural practices that not only support adaptation to changing weather patterns but also contribute to lower greenhouse gas emissions, particularly methane, which is prevalent in the dairy sector.
This is the first time GCF is making a livestock-focused investment, demonstrating the importance of tackling emissions from this sector while ensuring farmers are equipped to deal with climate disruptions. The initiative is the result of strong partnerships across multiple stakeholders. IFAD designed the programme in collaboration with the Food and Agriculture Organization’s (FAO) Investment Centre, which provided technical expertise on climate and livestock. The Global Methane Hub and the Global Dairy Platform also played important roles in the programme’s development.
Over the next 20 years, the DaIMA programme aims to reduce greenhouse gas emissions from the dairy sector by more than 2.1 million tonnes of CO2 equivalent. This reduction will be achieved through improved production efficiency, better land use practices and enhanced livestock management. In doing so, the programme will not only contribute to the countries’ climate goals under the Paris Agreement but also stimulate economic growth in the dairy industry.
A projected increase of 34 percent in milk production will significantly enhance the contribution of dairy to agricultural GDP across the four participating countries. Beyond economic impact, DaIMA places a strong emphasis on inclusion. Women and young people will receive targeted support through capacity building, access to resources and financial inclusion, enabling them to play a more active role in the dairy sector. This focus on gender equality and youth engagement ensures the benefits of the programme are widely distributed.
Importantly, the programme also seeks to mobilise local financial institutions to support private sector investment in climate adaptation. This approach is expected to create more opportunities for innovation and entrepreneurship across the value chain, from farm production to processing and distribution. By enhancing monitoring and reporting systems, the initiative will also support better data-driven decisions at national and regional levels.
For entrepreneurs in rural areas, the DaIMA programme offers a valuable foundation for sustainable business growth. Access to improved infrastructure, training and climate information will help them make smarter decisions and develop climate-resilient enterprises. It opens up new possibilities for rural agribusinesses to scale up, diversify and create employment while contributing to a healthier planet. Whether it’s producing feed, offering veterinary services, processing dairy or developing cold-chain logistics, rural entrepreneurs stand to gain from the investments and structures that DaIMA will put in place.
This initiative signals a shift in how the region approaches climate, agriculture and rural development. It is not just a climate response but a business opportunity, one that invites rural communities to lead the way in building a greener, more resilient future.
