Building bridges: part one

Give dairy farmers in developing countries a market and support them with new production models. That way we can build bridges between the dairy industry and local production in developing countries.

If the dairy industry truly wants to make its production chains more sustainable, it will have to invest more – and invest differently – in the production and procurement of local dairy produce in developing countries. In many places, this is not happening enough, as the supply and quality of local dairy products are not up to the standards required. This is why Solidaridad is working on solutions that can bridge the gap between businesses and local dairy production. By developing new business models in conjunction with the dairy industry, we want to create opportunities for local farmers and also create attractive market conditions for farmers and dairy companies.

P1050888

Local produces are excluded all too often

Currently, in developing countries, more than 80% of locally-produced dairy produce is sold in the local market. This milk is often poor quality, which among other things is due to poor cooling, poor hygiene and middlemen adding water. For dairy companies, purchasing dairy products on the global market is easier, more reliable and often cheaper. This choice is understandable. However, the exclusion of the majority of small-scale producers in developing countries is the worst possible scenario in terms of bringing about a sustainable, inclusive production chain. It will lead to the continuation of issues such as animal cruelty, irresponsible use of land and water as well as high carbon emissions. I believe that we should see local production as an opportunity, a way to meet the growing demand from the rising middle classes for high-quality dairy products – an opportunity that we need to seize.

Working on dairy development is working on your reputation

Solidaridad envisions a dairy industry in which small-scale farmers participate as well, and in doing so have a positive impact on the local population and the environment. Many governments in developing nations are aware that dairy production can make a vital contribution to both the local economy and standards of living. They are opening up their markets to Western dairy companies, often on the condition that these companies agree to contribute to the development of local dairy production. If businesses wish to establish a position in developing countries, they would do well to make more strategic use of dairy development and, in doing so, acquire a good reputation with the market and governments.

Investments do not yield sufficient returns

So how can we sustainably bridge the gap, between local production and procurement by dairy companies? Many projects and programmes focus mainly on trainee farmers who only have a few cows and aim to make their enterprises more professional. These farmers end up going from producing 2 – 3 litres of milk per cow per day to 4 – 5 kilos of milk per cow per day. That is an improvement, but it is not enough to achieve a lower cost price, make enough money and be able to invest in further professionalisation. Additionally, the pitfalls of this approach are further exacerbated if a serious, (professional) partnership with a dairy company is lacking. This is often why projects fail to bring about substantial and sustained improvements in small-scale farmers’ dairy production and competitive positioning, or to guarantee the quality of their output. That is why Solidaridad wants to take a different approach and develop new initiatives that bring local production and dairy companies together.

Read part two about Solidaridad’s solutions later today.


Author

Catharinus Wierdawierda
Global Programme Manager Dairy for Solidaridad

With almost 50 years of experience in facilitating the development of socially responsible, ecologically sound and profitable supply chains, Solidaridad is a frontrunner in the area of sustainable economic development. Catharinus is responsible for the global strategy, gives support to the regional offices to develop new dairy programmes and is building partnerships with companies. He is son of a dairy farmer and has more than 20 years experience in the dairy sector in The Netherlands and abroad.He is a speaker during the summit. Contact Catharinus: catharinus.wierda@solidaridad.nl