Reducing production cost with a win-win system

Topics

  Climate smart agriculture,

      Win-win system

Situation

2013 June – July and monitoring in 2014. The dry season is increasing in the mountain region of Le Kef, in Tunisia. The Danone subsidiary works in this area with 200 producers of cow milk. Each one manages from 2 to 8 cows.

Problem

• During the dry season, operating costs increase with the need of importing food for cattle.
• During this period, the cattle’s diet is not balanced, the cows are not healthy and veterinarian expenses increase highly.
• The quality and the quantity of milk decrease.
• The cost of collecting milk increases.
• The low rate of fatty matter in milk is a key problem during processing.
• The producers’ income decreases and the economic cost-effectiveness of collecting and processing milk falls.

Implemented solutions

• Feasibility study of the implementation of solar pumping systems in the milk farms, with the aim of irrigating forages during the dry season without any increase of operating costs.
• Training of trainers of the Danone subsidiary to run the feasibility study on all productions.
• Work with a local microcredit association, subsidiary of ADIE.

Results

• Implementation of contracts between producers, Danone and ADIE.
• ADIE delivered loans to producers to purchase the solar pumping systems.
• Purchase and installation of solar pumping systems.
• Forage production during the dry season; food for cattle was no longer imported.
• Decrease of veterinarian expenses and globally operating costs during this period.
• Increase in the quality and quantity of milk.
• Increase in the producers’ income.
• Decrease in expenses linked to collecting milk; increase in economic effectiveness.
• Increased possibilities of processing milk due to the high rate of fatty matter.
• Loans are refunded directly by Danone every month, before payment of the producers; through this system, ADIE is guaranteed that the loans are refunded.