Can Dairy Farming Be A Business?

Sitembiswe Peme, a small-scale dairy farmer and member of Pemba Dairy Cooperative in southern Zambia, has a small herd of cows that she milks each day.

Until recently, cows were rarely owned as an investment and instead were seen only as a source of status and prestige. When households needed to make a major payment or purchase–such as paying annual school fees to enroll a child–they often slaughtered an animal such as a cow or goat to come up with the money, each time leaving them with one less productive asset.

Being a member of a dairy cooperative has changed this. Smallholder dairy farmers make an average of $120 dollars per month selling their milk. After support from the U.S. African Development Foundation (USADF), farmers can expect to more than double this income.

“When you have this milk it’s very constant, you know that each month I’ll get this much, this month I’ll get this much,” says Ms. Peme.

Farmers who sell their milk to a cooperative receive monthly income year-round, “almost like a salaried employee,” says Peme. Unlike crop farmers who get their yearly income as a one-time, lump-sum payment after the harvest, dairy farmers receive regular payments which supplement their income and make it much easier to save. “Normally the farmers, what they do when they get the milk, they go and pay school fees,” says Mweemba Billah, veterinary assistant for the Mungaila Dairy Farmers Cooperative.

Still, the dairy business has challenges. USADF has made investments in over 12 dairy cooperatives throughout Zambia, totaling $2 million dollars and reaching 15,000 farmers and their families, to catalyze the cooperatives’ growth and address their challenges. In addition, the locally-bred cows, used to the demands of the environment, produce relatively small amounts of milk—producing an average of one liter per cow per day–compared to improved breeds that produce ten to fifteen liters per cow per day.

USADF supports dairy cooperatives to increase their milk and subsequent refrigeration capacity. USADF has recently funded another cooperative, Magoye Dairy Cooperative Society, to establish a satellite milk depot powered by solar electricity in Zambia’s remote Kafue plains, allowing the cooperative to reach 25 percent more farmers. USADF has also supported African energy companies extending solar-powered dairy refrigeration in Rwanda and Uganda.

In Zambia, USADF funds dairy cooperatives with improved breeds, which produce higher quantities of milk. Farmers pay the cooperative as little as $25 USD per cow, and in return will have a fully-grown female dairy cow in two to three years which produces up to ten times as much milk. At Mungaila Cooperative, milk sales increased from $60,000 to $100,000 in the first year of the grant.  Farmers are also educated how to manage the improved-breed cows, as they require additional feed and medicine, although farmers find that they are definitely worth the extra care. In the words of Ms. Billah, “Before the farmers used to just see animals as prestige– now they see it as a profitable business.”