In developing countries, it is quite common to find milk production areas at great distances from areas of heavy demand for dairy products. These areas of demand are usually concentrated in the capitals and major cities. In an attempt to meet this demand in part, developing countries have tried to establish dairy industries near urban consumption centres.
While there is overproduction in some parts of the country due to lack of outlets, dairy plants often work at only 20 percent of their capacity because of the long distances between the milk producing zones and the urban consumption centres where the plants are situated.
Costs of milk collection for plants located near the capital are very high due to fuel prices, poor road conditions (particularly during the rainy season), the cost of spare parts and the mileage required to be covered. For economic reasons, therefore, dairy plants have tried to restrict milk collection to nearby milk-producing zones, rounding out their daily output through the importation of dried milk and butter oil used for reconstituted milk.
The cost of milk collection represents approximately 30 percent of the processing cost of the finished product (packaged pasteurized milk).
The traditional demand in developing countries is for fresh milk in the cities and fermented milk in the countryside.
The dairy plant therefore primarily produces fresh and reconstituted milk, pasteurized, and packaged in plastic bags. Governments generally consider milk a basic commodity and consumer prices are strictly controlled. Plant profits from milk sales are usually quite low, forcing the management to market another, more remunerative product not subject to price control. A frequent choice is yoghurt, which is sold to wealthier people and to expatriates.
Besides the market for local milk products, there is also a market for imported products which, in order of importance, are dried milk for babies, tinned milk and cheeses.
As a result, the problem in many developing countries is that while the small milk producer has no regular outlet for his milk, consumers pay high prices for imported dairy products.
First of all, a dairy processing plant should offer producers a guaranteed daily outlet for their milk supply.
During the dry season, when domestic milk production is low, milk-pedlars are a common sight buying milk from producers who are far from urban consumption areas. However, during the rainy season, due to poor road conditions and increased milk production, this milk is not collected.
If a milk producer were guaranteed a regular, fair income, it would provide the incentive for him to move from a position of self-sufficiency in milk for the family into one of selling, thus boosting milk production in his area. Remote milk-producing areas are often good livestock production regions, but because of lack of commercial outlets they do not receive the necessary incentives for boosting milk production.
The introduction of a dairy industry, modelled on European systems, into a developing country has only very rarely involved the producers themselves. And even when it has, usually only the big milk producers located near large towns have been involved. The introduction of a processing plant or unit, at village level, concerns principally the local producers themselves. The size and simplicity of the unit should allow participation by small producers who are aware that self-help is a more immediate prospect than Government or bilateral assistance.
by forming associations, the small producers, who live directly on the meagre resources brought to them by their cattle, can set up the unit. Many big herds belong to “entrepreneurs” in cities who entrust their stock to the care of herdsmen, paying them only the equivalent of one day's milking a week.
by presenting a type of project which suits their needs - simple, practical and which allows them to work together within their own environment.
The site should be in a remote, inaccesible, traditional milk-producing area. Such areas, where communications are difficult and cattle-raising is a normal component of the family livelihood, are very common in Latin America, Africa, the Near East and Asia.
An area should be chosen where milk collection from the capital is not possible.
In an area where cattle, and milk in particular, should be the main regular source of cash for purchasing the family's domestic needs such as clothing, sugar, etc.
In an area where there is plenty of water to allow hygienic processing of dairy products which requires an average of five litres of water for each litre of milk processed.
In an area where the quanity of milk to be processed is available within a ten-mile radius since the time required for the transport of the milk should not exceed three hours. In tropical countries this is generally recognized as the upper limit beyond which milk cannot be pasteurized or heat-treated.
produces dairy products for which there is demand in the cities and in the villages;
produces dairy products not supplied by dairy plants located near towns;
produces dairy products which:
can easily compete with imported products;
do not require costly or sophisticated equipment;
require neither an expensive source of power nor a particularly complex infrastructure;
can be easily and cheaply moved without lowering the quality of the finished product;
can be sold in small unit sizes so as to reach a large number of consumers.
Locally-produced dairy products, particularly those such as cheeses, butter and fermented products, are frequently considered by the more affluent consumers in the capital cities of developing countries as second-rate compared to imported products. In fact, locally processed milk products are often considered even by the producers themselves as merely by-products, surplus to their family needs. The project needs to demonstrate that with appropriate technology the finished products can be just as good as, and often better, than imported products considering the time required to clear imports through customs. At a minimal cost their presentation can also be as good.
The village dairy unit is a tool:
for a group, association or cooperative,
for pooling resources so as to exploit their milk surpluses,
to enable people to organize, and obtain the resources they need for improving their welfare.
