SRI LANKA’S LARGEST INDEPENDENT DAIRY COLLECTOR PARTNERS WITH THE USDA MARKET ORIENTED DAIRY PROJECT TO LEVERAGE SUPPORT FOR MILK SUPPLIERS

In August 2018, Wonrich Dairies, the country’s largest intermediary collector and supplier of fresh milk to dairy processing companies, joined forces with the United States Department of Agriculture-funded and IESC implemented Market-Oriented Dairy (MOD) Project in Sri Lanka to build the capacity of their farmer network. Since then, IESC has trained 846 dairy farmers supplying to Wonrich on best practices in dairy management, with nearly half of them also receiving training on business basics and business planning. At Wonrich’s milk chilling center, IESC provided training on quality and safety protocols and proper management practices to 50 managers and staff. In addition, IESC helped Wonrich identify 628 high potential dairy farmers, conducted a gap analysis of farmer needs, and guided the farmers to develop action plans to increase milk production.

The first of three grant disbursement ceremonies hosted by Wonrich Dairies to handover the approved loan documentation and essential equipment to the first fifty recipients.

After assessing the technical and financial needs of the farmers, IESC assisted Wonrich to develop a loan proposal to the United Nations International Fund for Agricultural Development’s Smallholder Agribusiness Partnership Program (SAPP). Following a feasibility study, SAPP approved loans totaling US$1.2 million and grants totaling US$660,000 to be distributed to over 600 Wonrich farmers. To date, loans totaling US$800,000 have been distributed, along with 200 chaff cutters and 314 milking machines, through this partnership.

Mr. R. M. Ratnayake, the Proprietor and Managing Director of Wonrich Dairies said, “Initiating this type of collaborative effort is not without its challenges and it required a considerable amount of time and energy. I am thankful for the support of the MOD and SAPP teams for championing this effort to provide critical support to the farmers.” The dairy farmers are utilizing the low interest loans to improve cattle sheds and increase cow comfort, and to cultivate fodder and Azolla, a protein-rich aquatic fern, to improve the quality of feed. The chaff cutters distributed as part of the grant component were critical as they help farmers cut feed to the correct size, increasing feed intake and resulting in higher milk yields.

A recent survey of 52 of these farmers revealed that their milk yields increased by 35 percent on average within a year. They achieved this by expanding their land under cultivation to grow the required feed, installing Azolla ponds to produce a high-protein, low-cost feed source, and introducing a total mixed ration method to feed their animals. This increase in Wonrich Dairy farmers’ milk yields aligns with the overall trend seen in the 4,773 dairy farmers that have participated in IESC’s MOD training programs over the past four years. As of September 2021, 90 percent of surveyed farmers have reported an increase in their milk production with an average increase of 64 percent, and 88 percent have reported improved milk quality, thanks to IESC’s mentoring and technical support.

Wonrich dairy farmers Mr. Bandaranayake and Mr. Ratnayaka increased their milk yield from 25 liters per day to a consistent 60-70 liters per day by implementing the MOD best practices they had learned through training. “The MOD team made us understand that consistent, year-round availability of good quality feed is the key to increase milk production, and that changing management practices from an extensive to semi-intensive method would help us in giving the animals the right amount of feed and water daily, and improve [their] welfare,” said Mr. Bandaranayake. “When we received our loan money, we used it to grow enough CO3 [grass] in a paddocking system to meet our daily requirements, installed Azolla ponds to supplement the protein requirements, and built cattle sheds in the loose barn style as recommended by MOD to allow free movement for the animals which helped us manage the herd better. We also kept the costs low by using local materials,” added Mr. Ratnayake. With the SAPP assistance and continued guidance from IESC, both farmers are working towards investing in new milking cows to reach 100 liters per day by March 2022.

MOD’s partnership with Wonrich has helped establish a replicable working model as IESC rolls out similar programs with other private sector partners, including dairy processors and their dairy farmer network. Speaking of what’s to come, MOD’s Investment and Finance Director, Mr. Chandana Basnayake, said, “Together with SAPP we have also designed schemes for animal feed crop cultivators, commercial silage producers, and youth entrepreneurs, and we look forward to continue the collaborations to further strengthen the dairy sector.”

The Market-Oriented Dairy (MOD) Project, based in Sri Lanka, is funded by the United States Department of Agriculture (USDA) ‘Food for Progress’ initiative and implemented by IESC. The project aims to double the milk production of participating dairy farmers and enable them to obtain a higher price premium for fresh milk through interventions primarily designed to enhance their technical knowledge and create an entrepreneurial, business-oriented mindset. The project also supports enterprises along the dairy value chain to meet the demands of the country’s dairy sector to catalyze sustainable growth. IESC’s sub-partners are Sarvodaya, University of Florida, Global Dairy Platform, and SEAF.