​​​Opportunity for sustainable development

Sri Lanka’s Jaffna District may not seem like the most obvious location for a Dairy Hub project. Although the country’s civil war had ended in 2009, in 2013, when Tetra Laval first started exploring the possibility of working in the region, the scars sustained by this former rebel stronghold were still very much in evidence. 

“The houses were riddled with bullet holes, and the fields with landmines,” says Bjorn Wille, Food for Development Director of Project Development and Nutrition. “The local economy was in tatters. There was no tradition of dairy farming in the area and little expertise. Farmers might keep a cow or two on their land but yield was low and there was no infrastructure to sell surplus milk, even if they had any.”

Nevertheless, Bjorn and his colleagues in Tetra Laval Food for Development could see an opportunity. “It’s my job to look at the big picture, so I come in early and review the economics,” he explains. “Every project we set up has to be sustainable, so I need to consider the price of milk, the cost of feed and so on to ensure it will be worthwhile for the farmers as well as for our customers.”

Bringing the partners together

People standing around cow

Having established that a project in Jaffna could be viable, Bjorn set about bringing the partners – local supermarket chain and dairy processor Cargills and international aid agency GIZ – together. Other agencies had tried before to develop dairy farming in the area, but lacked a link to market. Between them, Cargills and GIZ could fill this gap, offering a combination of competitive prices and a robust network of collection points plus essential education and training.

As always, the first step was to focus on raising standards of animal husbandry. GIZ provided a team of veterinary staff, including an expert in cattle insemination who could help increase cattle numbers and improve the breed at relatively low cost to the farmers. Morgan Tinnberg, Food for Development’s international Dairy Expert, also played a vital role, working closely with the inexperienced farmers to build their expertise around feeding and caring for the cows to ensure an increased yield of good-quality milk.

“The project has been a godsend”

Two years since set up, and the project is delivering significant results. For Cargills, it has provided a way of increasing volumes in a country where demand currently far exceeds supply. Volumes have been building steadily since the project began: from zero to 6000 litres per day. As Bjorn points out, “when volumes build like this we are adding value for the dairy processor as they see the collection costs going down as the amount of milk rises.” In fact, the project has been so successful Cargills is keen to expand operations across the Northern Province. All three partners are currently looking at the best way to roll out a bigger version of the current project.

The benefits are obvious for farmer too. Having seen a dramatic increase in returns – net income from a single cow is currently equivalent to around 40% of average income locally – several have decided to invest in more cattle and have been able to take advantage of low-interest loans from Cargills’ bank to do so. One woman farmer sums up the impact of the project on individuals and their families: “We are finally able to stand on our own two feet and provide for our children adequately without being in debt. The project has been a godsend to us.”