Empowering Farmers and Ensuring Food Security in Sindhuli: A Dairy Success Story

Sustainable agriculture
Anuradha Bhattarai28.03.2024
Among the 3.8 million farming households in the country, 95% have dairy animals because of the key role they play in household subsistence and nutrition. However, most of these households primarily produce milk for their own consumption, with occasional sales during peak production seasons. Only about 14% of milk producing households are both producers and sellers.

Mangalam Dairy is a new dairy company established in 2019 in Sarlahi. The dairy has a vision to be a leading dairy company in Madhesh Province and aims to supply quality dairy products to the market. The company is working towards collecting milk from farmers in the province, especially Sarlahi, Bara and Mahottari to produce major dairy products like yoghurt, paneer, ice-cream, ghee and churpi etc.

The Commercial Agriculture for Smallholders and Agribusiness (CASA) programme partnered with Mangalam to boost milk collection from dairy farmers who were previously not engaged, directing the surplus to formal dairy markets while simultaneously improving the quality of milk in the region. During scoping for new dairy farmers, however, it was evident that the milk pockets in and around the province were characterised by low quality of milk. To enhance the quality of milk, Mangalam with CASA’s support, provided Good Manufacturing Practices (GMP) trainings across various regions. While providing these trainings, Mangalam also organised a training session at the recently established Caneshwor Dairy Cooperative in Harirarpurgadi, Sindhuli. Established in 2023 with government aid, it serves as an initiative to bridge the gap between dairy farmers in the region and the market. With the village having more than 50 dairy farmers but lacking a single milk collection centre, the cooperative identified the opportunity to facilitate the farmers’ entry into the formal market. It was realised that the establishment of a milk cooperative in the region could yield profits for both the dairy farmers in their supply chain and the cooperative itself. The establishment of the milk collection centre has been gradually bolstering the economic well-being of local dairy farmers.  

During a scoping exercise to identify potential procurement points, Mangalam pinpointed this collection center due to the need for improved milk quality. Following the successful completion of the training sessions, Mangalam commenced milk collection operations at the identified centre. In a country like Nepal where about five million people are multidimensionally poor (UNICEF, 2020), increasing access to markets for farmers, especially in remote areas, is of paramount importance. It not only enhances their income but also empowers these communities to break free from the cycle of poverty, fostering a brighter and more prosperous future for all.

Milk collection center identified by Mangalam Dairy

The cooperative has successfully gained market access, facilitated by Mangalam dairy, which consistently collects almost all its milk on a regular basis. This in turn has provided a secure market for the dairy farmers who now sell their milk to the collection centre. Prior to the establishment of this cooperative, the farmers in the region compelled to sell their milk in informal markets at rates below market standards, averaging around Rs. 65 per Liter. The establishment of this cooperative has instigated a positive shift, encouraging dairy farmers to sell their milk in the formal markets at fair prices, now averaging at around Rs. 85 per Liter.

Kamal Moktan, a representative of the cooperative who has been actively involved in the collection centre since its inception, provided insights into the village's demographics, revealing a predominantly marginalised population consisting of ethnic groups such as Magar, Lama, and Dalits. Despite being in operation for only six months, Caneshwor Dairy Cooperative has achieved remarkable progress. Initially starting with just five farmers contributing their milk in its inaugural month, the cooperative witnessed a substantial growth, with the participation of 51 farmers within a brief five-month span, a testament to the cooperative's promising success. The collection centre now collects approximately 250 liters of milk daily, which it sells to the Mangalam Dairy in Hariyon. As Mangalam buys milk from the cooperative at fair, government set prices, the cooperative’s farmers benefit from a 30% increase in income.

Furthermore, with market security established by Mangalam, the cooperative is actively aiming to boost revenues by increasing its milk collection. To achieve this the cooperative has been encouraging dairy farmers to increase milk production by procuring additional dairy cattle. To facilitate this, the cooperative provides subsidised loans at interest rate of 4% to its member farmers, enabling them to purchase livestock. This financial support has led to the purchase of 23 new dairy livestock in the village over the past five months alone. In addition, the cooperative has also proactively distributed forage seeds, thereby improving feeding practices, reducing cattle-rearing cost, and promoting sustainability.

Sabal Singh, a representative from Mangalam Dairy, attests to the consistently high quality of milk supplied by the cooperative. Buffalo milk, a regional specialty, boasts rich fat content and an extended milking period compared to cow's milk. When the Caneshwor Dairy Cooperative initially approached Mangalam Dairy, Mangalam was actively seeking additional milk for chhurpi production. Recognising this opportunity, Mangalam provided GMP trainings to the members of the cooperative, fostering a collaborative environment and formalising their partnership for mutual benefit. The partnership has proven to be prosperous, and Mangalam Dairy remains steadfast in its commitment to continue sourcing milk from this cooperative.

Mohan Bahadur Magar, a dedicated farmer residing in Ward No. 7, is one such beneficiary of this transformative movement. Mohan tends to a buffalo, from which he extracts approximately 6 liters of milk every day. The increased income from this endeavour has given Mohan hope for an enhanced standard of living. He has also obtained the subsidised loan provided by the cooperative to buy a buffalo calf. With access to finance and a guaranteed market, Mohan hopes to gradually increase milk production and secure additional income.

Mango Maya Syangtan, another resolute farmer in the village, echoes a similar tale of determination. Every day, she embarks on a difficult hour-long trek. With no alternative milk collection centres in proximity, Caneshwor is her only option to sell milk at a fair rate. Mango Maya diligently receives payments from Mangalam dairy on a monthly basis, a financial help for her family of eight, of which four are young children. The newfound income has allowed her to make significant strides in securing better quality sustenance for her family, now able to afford more nutritious food.

Mango Maya

What makes Mango Maya's dedication even more remarkable is the harsh reality she faces during the monsoon season. When the river surges, cutting her off from the collection centre, she has no choice but to take a detour, extending her daily journey to a gruelling two hours. Her determination and the absence of alternate collection centres compel her to tread this difficult path. Despite the challenges Mango Maya greatly appreciates the establishment of the collection centre which has given her an opportunity to sell milk for the first time.

Mangalam’s partnership with Caneshwor Dairy Cooperative is not only elevating the living standards of dairy farmers in the village by providing them with access to subsidised finance and a guaranteed market for enterprising farmers like Mohan Bahadur Magar and Mango Maya Syangtan, it is also playing an instrumental role in motivating the dairy farmers to acquire more dairy cattle and increase milk production.

Nepal, Rwanda, Ethiopia
Sustainable agriculture
Commercial Agriculture for Smallholders and Agribusiness Programme
The project aims to involve smallholder farmer businesses sustainably in agricultural value chains, thereby improving their living conditions and economic situation. By building inclusive agricultural systems, smallholder farmers will have improved access to markets, information, and means of production. Additionally, the project emphasizes...