Supporting Mexico’s Small-Scale Dairy Farmers

April 01, 2015

A sustainable strategy for milk supply in Mexico has improved the standard of living for hundreds of farmers.

Farmers participating in the Margarita Project were able to invest in new infrastructure to produce high-quality milk.

For years, small-scale dairy farmers in Jalisco, Mexico, struggled to find a market for their milk. In 2010, a group of 300 farmers joined the Margarita project to integrate their farms into the supply chain of the dairy company Danone. As a result, the participating farmers were able to supply 10 percent of the dairy used by the large Danone plant in Irapuato, Guanajuato, which provides healthy and high-quality foods for the Mexican market.

The Margarita Project represents a strategic partnership between Danone, TechnoServe, Fondo Exosysteme, the Universidad Nacional Autónoma de México and the Regional Stockbreeders Union of Jalisco. TechnoServe advisors helped farmers acquire technical skills and business so that they could better manage their farms as businesses. We also connected the farmers with financing to invest in more cattle and key infrastructure such as milking machines and cooling tanks, which improved the quality of the dairy by preventing bacteria.

The farmers also received training on quality standards, and were advised by veterinarians on better breeding, quality management, hygiene, animal health and nutrition skills.

As a result, producers like Cecilio Gutiérrez y Martín Velázquez were able to become providers to an industrial client with international standards for the first time. Their incomes and standard of living have improved, and they now have a long-term business relationship with payments received on time.

Today, more than 115,000 liters of milk produced by these 300 farmers reach the Danone plant daily, representing a tenth of its total supply. Participating farmers increased milk productivity from their cows by 18 percent on average, while earning a higher price per liter. Overall, the farmers’ net income has doubled since the start of the program.