Dukundamantugo Dairy Cooperative Posts 413% Revenue Growth in Two Years

Originally published on September 17, 2015.

For years, Rwanda’s Dukundamatungo (loosely translated as ‘We love livestock’) Cooperative struggled to earn sufficient revenue for its members, due to an insufficient supply of quality milk, challenges with accessing reliable markets at which to sell, and an inability to secure the financing they needed to grow.

But, through the support the cooperative has received from the USAID-funded Rwanda Dairy Competitiveness Dairy Program (RDCP II), Dukundamatungo’s annual gross revenue has soared from 30 million Rwandan francs (US $40,106) in 2012 to a whopping 154 million Rwandan francs (US $205,883) by the end of 2014. This impressive 413% increase is benefitting the co-op’s 222 members, as well as 239 other dairy farmers who supply milk to the co-op's milk collection center.

Implemented by Land O'Lakes International Development and partners including ABS Global, RDCP II is working to strengthen Rwanda’s entire dairy value chain. Beyond assisting individual suppliers and strengthening dairy cooperatives and producer groups, the program is also playing a leading role in improving Rwanda’s food safety standards for dairy, while raising consumer awareness about the importance of drinking quality milk.

RDCP II began working with Dukundamatungo 3 1/2 years ago to address the root challenges that were hindering its growth. To this end, the program supplied the co-op with milk collection, storage and testing equipment, and it built the capacity of its staff and farmer-members in milk production, handling and testing, as well as critical support in business management. In addition, RDCP II linked the cooperative to milk buyers so that it could have a dedicated market for sales, and to financial institutions for accessing loans. The total support from RDCP II provided to Dukundamatungo is valued at 9.9 million Rwandan francs (US $13,300).

In order to improve production and milk quality, Land O’Lakes and the rest of the RDCP II team trained Dukundamatungo’s 222 farmer-members and other 239 dairy farmers on cattle management. This included building their capacity on improved feeding, breeding, herd health, milk handling practices, dairy business management, cooperative development and gender mainstreaming. In addition, RDCP II trained the cooperative's technicians on hygienic milk handling and milk testing.

Beyond training, RDCP II supplied the co-op’s farmer-members with a total of 80 ten-liter and 32 fifty-liter milk cans, which help ensure that the milk remains sterile from the moment it is collected. It also provided Dukundamatungo with a 2,500 liter-capacity milk cooling and storage tank that increased their capacity for adequately chilling the increased volume of collected milk, so that it doesn’t spoil before reaching the processor. The program also provided the co-op with two motorized tricycles that collect milk from distant farms that could not previously bring milk to the cooperative. As a result, milk supply to the cooperative increased by 217 percent.

In addition, RDCP II supplied the co-op with milk sieves for straining out particles, cleaning equipment for milk cans and their cooling tanks, and uniforms for milk handlers. As improving milk quality is a core focus of the program, RDCP II also supplied Dukundamatungo with a range of milk quality testing kits. This included an alcohol test for detecting spoilage (milk acidity), a lactometer for testing milk density (and which can spot adulteration with water or additives), equipment for detecting mastitis, and a ladle for milk sampling.

In 2013 and 2014, through RDCP II facilitation, three financial institutions launched loan products for the dairy sector. As a result, Dukundamatungo Cooperative secured a loan of 18 million Rwandan francs (US $24,000) from Urwego Opportunity Bank (UoB) to purchase a truck to transport large quantities of milk to a processor in Kigali.

Overall, as a result of RDCP II facilitation, the Cooperative's milk supply has more than tripled from 1,200 liters per day in 2012 to its current impressive 3,800 liters per day. Moreover, the amount of milk rejected due to poor quality and bad milk handling has plummeted from 550 liters per month to zero.

Importantly, the gender mainstreaming focus at the co-op has also increased women’s membership from 11 percent in 2012 to 40 percent of its 222 farmer-members.

As a spin-off from increased revenue flows and to provide comprehensive services to its members, the cooperative has diversified its business beyond collecting and transporting milk. In this regard, it has strengthened veterinary pharmaceutical and animal feeds retail, and farm veterinary and artificial insemination services provision. This combined new business is nascent but, in its first year, brought in gross revenue of 4.5 million Rwandan francs (US $6,000).

While the cooperative's revenue has more than quadrupled over the last 2 1/2 years, average individual earnings among farmer members has more than tripled, while the expanded milk collection is enabling increasing numbers of farmers to supply milk to the cooperative.

According to Dukundamatungo’s chairman Patrick Byabagamba, the cooperative has a vision for continued growth to increase its revenue. “We have assigned every member to bring in two new members apiece so we can increase membership, which will continue to increase our collection center’s milk supply. Our goal is to reach 6,000 liters per day by the end of this year [2015].”

If they achieve their target, it would almost double the current annual gross revenue of 154 million Rwandan francs (US $205,883) to 300 million Rwandan francs (US $401,070). 

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