USAID research identifies opportunities in dairy sector

To help small farmers improve their businesses, the United States Agency for International Development (USAID) conducted a study of the Sri Lanka's dairy sector. The study results show that there is strong competition among dairy processing companies, which is helping to expand milk collection routes from rural areas. The increased demand in certain regions is leading to greater development and investment opportunities for dairy farmers.

The study also helped identify the areas for dairy market improvements and the obstacles that need to be addressed. Small farmers have traditionally cared for a few head of cattle without the benefit of special feed, veterinary care or good breeding. The local breed of dairy cow typically only yields between 1-2 liters of milk per day. This could be substantially increased with a concerted effort from the public and private sector.

The study shows that there has been substantial progress in the dairy sector and small farmers in Sri Lanka's former conflict zones are benefitting. Improved policies have helped to encourage dairy sector development through greater market access for small farmers.

The Government of Sri Lanka and private sector dairy processing companies are implementing a concept called Dairy Villages. The Government is assisting farmers to improve the health and breeding of cows within their village area. Knowing there will soon be more milk available, the commercial milk processing industry is investing in the necessary equipment and structures to collect and market milk from those villages.

USAID is supporting these efforts by providing equipment and training to Dairy Villages to help farmers collect and chill milk until it can be collected by an interested dairy processor.

At the same time USAID encourages and supports Dairy Processors to invest in new collection routes that would reach more dairy farmers. USAID has boosted the sector by partnering with a private company to increase milk production.