Zimbabwe: Restoring Confidence in Milk Collection

Originally published on December 23, 2014.

As Zimbabwe begins to recover from the political and financial turmoil that forced it to temporarily abandon the local currency, a new program made possible by the American people is helping to restore small-scale dairy farmers’ faith in the formal economy.

At the height of Zimbabwe’s 2007/2008 economic meltdown, the monetary system collapsed, taking down with it the country’s productive sectors. The smallholder milk collection centers could not cope with the rapid changes from the local currency to the multiple currency system, resulting in the collapse of their financial management systems. Without the strong supply chains, fixed payments and guaranteed sales farmers need as an incentive to work through Zimbabwe’s 30 milk collection centers (MCCs), they slowed production and began selling or trading their milk through informal mechanisms.
Given the critical role dairy development often plays in improving rural incomes, USAID has been supporting Land O’Lakes International Development since January 2010 to address the systemic issues that make farmers reticent to sell their milk through the formal economy.

By working to improve the financial transparency and regulatory oversight of these MCCs, the USAID-funded Building Livelihoods and Food Security in Zimbabwe program is rebuilding farmers’ trust, while equipping the MCCs to better budget for their businesses and provide their members with increased returns.

Through the program, Land O’Lakes is strengthening nine of the country’s most viable MCCs in the province of Manicaland, and providing the structure needed to reengage the 600 dairy farmers who used to provide them with milk.

In addition, the program is also working to strengthen food security and livelihoods through expanded production of small ruminants, like goats, and adoption of animal traction and transport techniques.
In order to improve the levels of financial management at the MCC level and cascading down to the general membership, Land O’Lakes in partnership with National Association of Dairy Farmers (NADF) have set up an Accounting Bureau System. This is part of the effort towards expansion of
expanding NADF support beyond large-scale producers, and provide greater oversight of MCCs and the smallholder farmers they serve. Through connections facilitated by Land O’Lakes, all of the local MCCs in Manicaland have now joined NADF.

A total of 88 people -- member representatives from the milk producer associations, their executive committees and center administrators -- have been trained to date. The training package was a 12-step work flow control procedure inclusive of components of a good record keeping system from the point milk is supplied by the farmer, sold to a processor, the banking procedures, farmer payouts and
payment of bills and salaries.

I am happy to rejoin the association because the financial procedures are more transparent. We now know how our money is being used and how much we get from milk sales.

Farmer at Sangano Milk Producers Association (rejoined after dropping out in 2008)

In return, the NADF’s Accounting Bureau System has provided each MCC with templates to transparently record and publicly post members’ monthly milk production and their own maintenance costs. Using QuickBooks, the NADF is providing each MCC with profit and loss statements, which
MCCs are using to benchmark the competition and better ascertain their institutional strengths and weaknesses.

Although trust cannot be rebuilt overnight, many believe the program is auguring in many good things to come.

One farmer at Sangano Milk producers Association who has rejoined after dropping out in 2008 as a result of poor financial management at the MCCs said, “I am happy to rejoin the association because the financial procedures are more transparent. We now know how our money is being used and how much we get from milk sales.”

While the initial focus is on rebuilding farmers’ confidence, the next challenge for the MCCs partnering with Land O’Lakes is to reach out beyond their loyal members. With over 100 million liters of milk imported from South Africa and Zambia to meet local consumption demands, much work remains to ensure that the MCCs can effectively move their members out of poverty, and strengthen the nation’s indigenous supply of food.

Key Impacts: Dairy Production Collection and Processing – 10 Centers Countrywide
  • Milk flowing through milk collection centers (MCC) increased 48 percent.
  • Milk production at the farm level has increased by more than 400 percent over the baseline.
  • 27 community livestock workers received training in basic animal health and artificial insemination techniques.
  • 783 households received training in dairy management, including animal husbandry and managing their farms as a business.
  • We trained 14 administrative officers and 74 committee members in how to improve the way they record and interpret financial records that are fed into the Accounting Bureau System (ABS) housed at the National Association of Dairy Farmers. The raw financial data is processed at ABS and returned to the milk centers for timely financial analyses and reports.
  • So far, seven MCCs have received financial statements for the past 12-month period; this marks the first time that most have received such statements in more than a decade.
  • We established a dairy cattle bank that required all farmers receiving cattle to pay a US $150 deposit for a cow and a US $50 monthly payment for the next 18 months towards purchasing dairy cows for other members. We expect this will enable us to purchase an additional 150 dairy animals through the bank in its first year.
  • So far, 190 households have received in-calf dairy heifers and seven received dairy bulls through the dairy cattle bank scheme.
  • Dairy meal was purchased and distributed to 190 households through a revolving feed fund.
  • We set aside 650 hectares of farm land for improved fodder production.
  • Three MCCs reopened

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