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Working with dairy farmers

MILK COLLECTION CENTRE: Nestlé buys fresh milk from some 40 000 Chinese farmers and provides them with an overall regular income of around CHF 500 000 per day, fostering rural sustainable development for the communities concerned.

At Nestlé, we strive to do more for the farmers and communities who supply us milk through our Milk District Model.

The goodness of milk
Nutrition and wellness have always been at the core of Nestlé products, and milk has always been an important part of this equation. Founded in 1866 in Switzerland, Nestlé grew from two small companies producing milk-based products, into the world's foremost nutrition, health and wellness company. 

Today, in terms of sales value, Nestlé is the world’s largest milk company, sourcing more than 12 million tonnes of fresh milk equivalents from more than 30 countries. We purchase more than half of our milk locally as fresh milk (close to 7 million tonnes per year).

Working with farmers
Nestlé works with more than 600 000 farmers – most of whom operate small farms – to have a reliable, safe and high-quality milk supply. By adapting the Swiss Milk District System to dairy farming in developing countries around the world, the Nestlé proven and systematic approach is able to contribute to poverty reduction and improved nutrition on a wide scale.

The Nestlé Milk District Model involves:

  • Milk  collection centres featuring payment  systems, quality and safety controls, electronic weighing  equipment and cooling tanks.
  • Free technical and  animal husbandry support to improve milk quality.
  • Free veterinary services.
  • Transportation and  infrastructure networks.
  • USD 25 million of microfinance loans each year.
  • Prompt payment to farmers for each milk delivery.

Benefiting many countries
The Nestlé experience in assisting farmers, creating Milk Districts and dairy industries is evident in over 30 countries. Here is a sample of some of the community benefits from Nestlé Milk Districts:

WOMEN'S DAIRY DEVELOPMENT PROGRAMME: The Village Women Development Programme in Moga in northern India has trained 30 000 women dairy farmers.

  • China - Nearly 24 000 farmers in Heilongjiang, north-east China, deliver their fresh milk to 78 milk collection centres. Nestlé invests nearly USD 200 million a year into the local economy through milk payments, taxes, services and salaries.

  • Colombia - Nestlé is the third largest buyer of milk in Colombia where our two milk districts produce 226 000 tonnes a year. We pay around USD 5 million a month to 4 000 local dairy farmers, and a further 10 000 people in the region work in the milk supply chain as milkers, rural workers, transporters and traders.

  • India - The Nestlé milk-processing factory in Moga northern India opened in 1959. Since then the supplier base has grown from 4 600 farmers providing 2 000 tonnes of milk to
    100 000 farmers in 2 600 villages producing more than 300 000 tonnes. Field camps run by Nestlé Agricultural Services have helped many farmers improve their farming practices and milk quality. Separately, the Village Women Development Programme has trained 30 000 women dairy farmers. The Moga factory has also helped:

    - Set up drinking water facilities in 91 schools benefiting more than 33 000 students.
    - Introduce local tree-planting programmes.
    - Fund a tuberculosis clinic.

  • Indonesia – Located in Waru, East Java, the Nestlé factory started purchasing milk from local cooperatives in May 1975. Today, Nestlé Indonesia sources 480 tonnes of fresh milk every day (141 000 tonnes a year) from 27 local cooperatives.

  • Pakistan - Nestlé invests more than USD 180 million a year in milk sourcing in Pakistan, and USD 3 million in milk-related operations, agricultural and technical support, and training for farmers. Through milk delivery points in 2 000 villages, more than 135 000 dairy farmers supply close to half a million tonnes of milk a year to two Nestlé factories. A partnership with the United Nations Development Programme is also training 4 000 female livestock workers.

For more information, visit Nestlé Creating Shared Value.

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