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Farm economics

Our commitment: Improve farm economics among the farmers who supply us

Our commitment: Roll out the Rural Development Framework to understand the needs of farmers

We set up our first factory in India in 1961 in Moga, Punjab, upon the government’s invitation to develop a milk economy in the region. From collecting 510 kilograms of milk on the first day of the factory’s operations to our current 1.5 million kilograms of milk per day, it has been a collaborative effort with the community of 100,000 farmers. Over the years, Nestlé has implemented a comprehensive support system for dairy farmers who work on the entire value chain till the milk reaches Nestlé’s processing plant.

Milk district model

To expand our milk collection drive, we set up the Nestlé fresh milk district model in Moga for direct procurement. This enables us to provide logistic support to farmers, to prevent wastage of milk or compromise its quality during transit. The model helps us ensure that only high-quality milk reaches Nestlé. The following steps were taken to ensure reliable logistic operations: 

  • Setting up of milk collection centres to check milk quality and ensure fair prices to farmers
  • Deploying cold chain to secure the quality of milk during transit
  • Collecting milk twice a day to facilitate zero storage expense for the farmer, while ensuring uniform storage condition for milk throughout the value chain

We conduct assessments of various demographic, economical and existing conditions of milk supply for identifying the challenges involved in developing a sustainable and thriving milk economy. The benefits of backward integration with community collaboration have reaped multi-fold benefits for all stakeholders. Farmers receive increased income due to increased yield, reduced cost and minimal loss of milk, and prompt fortnightly payments to improve their livelihoods.

As part of the Global Dairy 4 You initiative launched in 2016, we assessed 445 dairy farms worldwide and 50 in India to identify animal health and welfare issues in our value chain. This has been implemented with the objective of helping us improve our sourcing operations and sharing information with consumers about our value chain. 

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