Nestlé creates a market for Chinese milk farmers

Country: China

Impact Area

  • Nutrition
  • Water
  • Rural Development
  • Environmental sustainability
  • Compliance
  • Community engagement
  • Gender balance & diversity
Sep 26, 2012, updated September 2012

Nestlé creates a market for Chinese milk farmers
"Factory and farmers":Providing farmers with technical assistance to improve their product.

Nestlé’s Shuangcheng milk production facility, established in 1987 and located in Heilongjiang Province in Northeast China, is the largest of its kind in Asia and ranks fourth in the world in terms of annual dairy production in the Nestlé Group.

Nestlé’s commitment to high-quality dairy production always start at the source and in the Shuangcheng milk district, we build direct relationships with each of the rural milk farmers who supply us with farm-fresh products.

Programme description

Over the past 20 years, we have created a unique milk collection model called “factory and farmers” that provides farmers with technical assistance whilst effectively eliminating the “middleman” to ensure traceability and accountability across our supply chain. Dairy farmers are provided with continuous training, skills development and access to new technology – from cow selection, to quality feed, to access to biogas digesters that can help farmers reduce effluents that contaminate local water resources. Nestlé conducts more than 300 free training sessions for Shuangcheng’s milk farmers every year where agricultural extension experts help educate farmers about best practices and new tools.

Nestlé’s Shuangcheng milk operations have grown rapidly as China’s demand for milk products has risen. The growth of national milk consumption provides unprecedented income-earning opportunities for local milk farmers, but it also raises environmental problems that must be addressed. One key issue is manure storage.

Currently, most farmers compost cattle manure outside their farm walls and apply it to their fields in the spring and autumn as fertiliser. But with a growing number of cows in Shuangcheng, adequate manure storage has become imperative to avoid contamination of ground water supplies.

Because most manure storage systems require sizable investments with no immediate financial returns, local farmers have little incentive to improve their management of animal waste. Nestlé has responded by financing the distribution of a low-cost solution: biogas digesters that help farmers store their manure in secure, covered containers and collect the manure’s methane gas as energy for home cooking, lighting, and heating.

Value to Society

The simple technology helps farmers reduce their wood and charcoal consumption, saving rural families money whilst reducing household carbon emissions that contribute to air pollution and global warming. More importantly, biogas production provides farmers with an economic incentive to manage their manure supplies more effectively, reducing water contamination in the process.

Nestlé initiated the biogas project in 2003 with the installation of 400 biogas pits across the Shuangcheng milk district. Since that time, education and outreach programmes supported by the company at 74 local demonstration farms have stimulated increased farmer demand for the technology.

Value to Nestlé

Next Steps