29 May - 28 July, 2000


E-mail conference on
"Small Scale Milk Collection and Processing
in Developing Countries"


Poster Paper: The Village Milk System





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POSTER PAPER : The Village Milk System - an alternative, low-cost milk collecting and in-pouch pasteurising system 

By: B.T. Dugdill, Dairy and Meat Officer (Institutions and Training), FAO, Rome.

Topic 2: Small Scale Milk Processing Technologies (Liquid Milk)


The demand for milk and milk products in developing countries is expected to grow by almost 60 percent over the next two decades.  Much of the growth will come from increasingly discerning urban dwellers, many with rising disposable incomes wanting attractively packaged, nutritious and value-for-money products.  Small milk producers are starting to respond by increasing the productivity of their milch animals and selling their surplus milk.  Local markets are soon satisfied, so producers have to look to intermediaries to collect, process and sell their milk further afield. These intermediaries invariably take the lion's share of the consumer price - often up to 80 percent.



Even where groups of producers pool their milk for economic reasons, they face a number of risks and difficulties when setting up small scale dairy enterprises.  Not least among these are the high cost and relative complexity of stainless steel milk processing equipment, and the high cost of imported packaging materials.  New technologies and systems are required that are not only inexpensive and easy to maintain, but can also get relatively small volumes of milk to consumers safely and efficiently.  As stressed in Lusato Kurwijila's discussion paper on Small Scale Processing Technologies for Liquid Milk, the challenge is also to adapt and scale down existing technologies.

Systems for collecting and processing liquid milk in developing countries should ideally have as many of the following features as possible:

  • handle up to 1 000 litres of milk daily, but also efficiently handle much smaller volumes;
  • low risk and minimal capital investment in expensive (stainless steel) equipment;
  • can be used in areas with limited local infrastructure (electricity and roads);
  • can be installed in existing buildings;
  • easy to operate and maintain;
  • environmentally friendly;
  • use attractive, locally produced packaging materials;
  • optimise milk quality and shelf-life;
  • promote rural employment;
  • maximise the returns to small milk producers.

This short poster paper describes a low-cost milk collection-pasteurisation system currently being promoted by the Livestock Production Group at FAO.

Milk Collection

Conventional ice-bank or direct expansion milk cooling units are expensive, costing as much as US$10 000 for a 1 000 litre capacity tank with supporting equipment.  The systems are expensive to run, especially when fairly small quantities of milk are collected during the lean season.  They require a purpose-built building, a reliable three-phase electricity supply, comparatively sophisticated maintenance, and good access roads for heavy milk collection trucks.  As a result, they can be difficult to operate efficiently where milk is produced in remote rural areas.

Since the 1980s FAO has been developing a low-cost alternative for collecting milk from these remote areas.  Known as the LACTOPEROXIDASE (LP) system, two activators are used to reactivate a natural enzyme preservation mechanism present in milk.  Developed in Sweden and extensively field tested, the technology is safe and inexpensive.  It is already in use in a number of countries and has received WHO/FAO Codex Alimentarius approval. Recent field trials in Bangladesh (April 2000) confirmed that treated milk can be preserved for up 10 hours after milking at an ambient temperature of 30oC before cooling or processing, whereas untreated milk started to sour within three hours or so of milking.

At present, the activators are produced commercially in Cuba, France and Sweden.  Costs work out at just under one US cent per litre of milk treated. More detailed information about the LP system may be found in Anthony Bennett's earlier poster paper, or on the FAO Lactoperoxidase Web-site.

Milk Processing

Conventional processing systems for pasteurising and packaging up to 1 000 litres of milk daily are also very expensive requiring an investment of up to US$50 000 for the equipment alone, depending on the system selected. Like conventional milk collecting systems, they require purpose-built facilities and specialised maintenance. 

FAO has recently field tested a low-cost, innovative milk pasteurising unit in Kenya.  Built in South Africa the unit, called the MILKPRO, first fills raw milk into pre-formed polyethylene pouches.  The pouches are immediately sealed, treated at 650C for 30 minutes in a batch pasteuriser, and cooled to 50C in a chiller.  The heating process is automatically controlled.  The unit can handle up to 100 litres of milk an hour and costs just under US$10 000.  At a daily throughput of 750 litres the payback period can be as little as 12 months.  The unit is operated simply by plugging into a standard single phase electrical power point, or by using a small diesel or petrol engine.  It is especially designed for easy cleaning and maintenance and suitable for installation in existing basic buildings. 

Because the milk is pasteurised in the pouch, post-pasteurisation contamination - the main cause of spoilage - is virtually eliminated.  A refrigerated shelf-life of up to 15 days is possible - a good sales plus in today's highly competitive marketplace.  The food grade polyethylene pouches can usually be manufactured in-country and printed with eye-catching designs.  Though the MILKPRO system was developed only recently, more than 60 units are now in use across 11 countries in Africa, both with small farmer groups and with individual farmers.  One unit is in operation in Europe (in Romania).

The Village Milk System

For the first time FAO is combining these two innovative technologies under its Village Milk System - the provisional name for the initiative.  The system is flexible and offers groups of small producers the opportunity to add extra value to their milk.  FAO's immediate aims are to increase producer returns by up to 50 percent, and to make increased volumes of attractively packaged, safe pasteurised milk available to consumers at competitive prices.  Initial indications are that the investment cost for the system - invariably the main risk for the small scale entrepreneur - can be cut substantially (see annex for indicative costs).  Another advantage of the system is its ability to handle very small quantities of milk (as little as 50 litres a day) efficiently and safely while local milk production and markets are being built up. 

Yet a further benefit is the potential to reduce energy and water usage. Because the only plant items to come into contact with milk are the milk cans and the filler, the amounts of water and detergents used for rinsing and cleaning equipment are significantly reduced.  This reduces the amount of waste water and the effluent loading, which in turn keeps costs down and is environmentally friendly.

The Village Milk System meets many of the key requirements for efficient, low-cost, low-risk milk collection and processing by smallholder marketing groups, whether they be co-operatives or private companies.  FAO and UNDP have already started a project with the Grameen Bank in Bangladesh where four small community-owned dairy enterprises will use the system to process small quantities of milk collected from thousands of very poor farmers. Each small enterprise will provide full-time employment for 12 people, including milk collectors and milk distributors who will use insulated cycle rickshaw vans. 

The preliminary financial analysis indicates the enterprises will breakeven at a throughput of about 210 litres of pasteurised milk daily, one third of targeted sales for each enterprise.  At this level, producers will get 70 percent of the ex-factory processed milk price.  Further projects are planned for Ghana and Guyana later this year. 

The progress of these initiatives may be followed on the FAO Animal Production and Health Division web-site at the above internet address. 


Village Milk System - Estimated Costs (US$)

(Based on field trails conducted by the Government of Kenya/FAO Training Programme for the Small Scale Dairy Sector project at the Naivasha Dairy Training Institute in Kenya in 1998)

Basic Equipment
Item                             Number        Estimated Cost (US$)
                                                        Unit            Total
Milk Collection

milk churns (50 litres)            40            40           1 600
milk col. point kits 1/              4           150              600

Milk Processing
milk reception/testing kit 2/     1           400             400
milk filling/pasteurising/
cooling unit                            1       10 000        10 000
miscellaneous furniture/fittings  1           400             400

Sub-total                                                           13 000

Optional Equipment

generator (8 kva)                   1         5 000           5 000
deep freezer (20 cu ft)           1         1 000           1 000

Sub-total                                                             6 000
Contingency (5%)                                                1 000


Total                                                                 20 000
1/ Memeasuring jugs or spring scale/tray/strainer/lactometer-
 thermometer/alcohol gun etc
2/ Weigh scale/strainer/lactometer/alcohol gun/thermometer/wash 
 tank/plunger etc

Basic Start-up Supplies 1/

Item                                Quantity             Estimated cost (US$)
LPs chemicals                5 000 sachets 2/                1 000
packaging materials 
(500 ml)                    110 000 pouches 3/                3 250
chemicals                        125 kg 3/                            150
68% alcohol
(for milk screening)            50 litres 3     /                   100
Total                                                                      4 500
1/ Average daily throughput of 600 litres (to allow for seasonal
fluctuations in milk deliveries and sales)
2/ 6 months supply
3/ 3 months supply

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