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Learning to run a dairy business

IFAD programme to help provide training for small-scale farmers in Malawi

Many smallholder farmers in Malawi rely on subsistence farming, which often does not produce enough food for them and their families. Further, these farmers have limited skills and agricultural knowledge to diversify crops or supplement their income from other reliable sources. The IFAD-supported Rural Livelihood Support Programme (RLSP) is implemented in the three southern districts of Chiradzulu, Nsanje and Thyolo in 2004 to tackle these issues and help provide the adequate training small-scale farmers need to diversify crops or develop new businesses.

A participatory approach

The programme works closely with all of the decentralized authorities, such as the District Council, the traditional authorities and the village group headmen, through the Village Development Committee. Using a participatory approach, the communities select which projects they feel they need the most. Projects have ranged from improving crops and rearing livestock to setting up new businesses.

Starting a dairy business

One of the RLSP-supported projects in the Chiradzulu district, the Matuwa Small-scale Dairy Company, has established a profitable business. The project worked closely with the Village Development Committee to teach farmers to milk cows and care for them so that the cows could continue to produce milk. “Before RLSP, we had no animals. We were making a living from casual work, working in other people’s fields,” said Cristina Mpamba, a 33-year-old mother of six who joined the scheme. “I couldn’t even afford to buy soap. Now I have a bigger house and I can send my children to school.”

The project was built around a revolving system whereby farmers were given a loan to buy a cow and build a shed; the loan then was repaid by giving the firstborn female cow to the next beneficiary. The Village Development Committee identified its poorest and most vulnerable members to receive a loan to buy a cow and be trained in the dairy business. With such a system, the animals started to multiply and the business started to expand. “When we started in 2006, we identified 24 farmers who were given 18 animals. Beneficiaries were lined up according to an order, such as by need or vulnerability, and were given the animal according to the order,” explained the Chairman. “We now have 160 cows,” he added.

Selling milk

The project also provided training in livestock rearing, animal health and business and group management. To sell their milk, the farmers deliver it to a bulk storage facility nearby which was developed by the RLSP programme in cooperation with the Shire Highlands Milk Producer Association (SHMPA). SHMPA supplied a 1,500-litre refrigerated steel storage tank; however, that wasn’t enough, so a second 1,200-litre storage tank was provided by Lilongwe Dairy Company. In return for the tanks, farmers guarantee milk supplies to both companies, which collect the milk every morning. The companies also supply the required medication (such as spray against ticks) and vaccines for the animals, which they deduct from the milk payment.

“Prices fluctuate between MK 31/litre [US$0.20] and MK 55/litre [US$0.36], and we produce between 10 and 28 litres per day, depending on how productive the cows are,” said Cristina Mpamba. Male calves are usually sold for meat. “I had one calf which I sold for MK 26,000 [US$172]. I’m hoping for a female because they get us more money,” she added.
Farmers are paid for the quantity of milk that they deliver to the milk storage facility. They have to keep daily records of how much they deliver, and they receive payment at the end of the month. “I can’t read or write, but I know the scale by now so I can recognize and write down the daily figures,” said Ephraim Makawa, one of the committee members and the father of seven children, including two whom he can now afford to send to secondary school.


On average, farmers can earn between MK 15,000 (US$99) and 30,000 (US$198) each month from selling milk. “Last month, I brought home MK 18,000 [US$120] net. My cow gave birth three months ago to a male calf so she is producing 15 litres a day,” said Joyce Kilowe, one of the most recent members who was employed as a casual labourer before the project. “I reserved some of the money for buying maize, and with the rest I bought children’s clothes and kitchen utensils.” She joked, “We have to look good, we are business people!” She is now waiting for her cow to give birth to a heifer to be able to repay her debt.

To feed the animals, farmers fetch grass or even pay someone to fetch it because that is labour-intensive work. To keep the animals healthy, the farmers have to complement the grass with maize blend, which is costly – MK 600 (US$4) per month. Veterinary services, particularly artificial insemination, are also expensive. “Artificial insemination is very expensive. Depending on the quality of semen, it can vary from MK 800 to 3,500 [US$5.30 to $23] each time. It doesn’t necessarily work every time, but we still have to pay when it is administered,” explained Ephraim.

In addition to livestock, the farmers grow small crops such as maize, groundnut, soya and beans for their own consumption needs. They all feel they’re able to work as a committee without trouble or conflict, but their priority now is to have more animals to be able to sell more milk and earn more money. “We really see the benefits the project has brought,” they all said unanimously.