Turning challenges into opportunities in Nicaragua

The dairy sector in Nicaragua has had many obstacles to overcome. But with a dedicated dairy processor and support from Tetra Pak, Tetra Laval Food for Development, DeLaval and partner NGO Venture Dairy, we have worked together in collaboration to provide consumers with locally produced quality milk, and at the same time improve smallholder dairy farmers’ livelihoods.

Local challenge

Nicaragua is the poorest country in Central America and has faced major social challenges such as malnutrition and the low education level of the population. Almost half the population lives below the poverty line despite the country’s natural resource wealth. The conditions for local food production and sustainable dairy farming are, in some areas, extremely tough: the main challenges are long dry seasons, lack of sufficient infrastructure, poor quality milk, and an inadequate cold chain.

Seasonal differences in milk production result in a decline during dry periods and a surplus during the wet season. Nicaragua is one of few countries in Central America that has a milk surplus during certain times of the year. The cattle is also used for dual-purpose.  This uneven production of milk has led to sharp price fluctuations, and poor milk quality has made it problematic for processors to deliver high standard dairy products to consumers on a consistent basis.

According to the Ministry of Agriculture, milk production grew 21.1 per cent between 2006 and 2011, with a total of 779 million litres produced by 2012. However, only 56 per cent was formally collected.  Domestic milk consumption is one of the lowest in the region, forcing the sector to focus on exporting UHT (Ultra High Temperature) processed milk. Exports have grown strongly in recent years, which means that the demand for high-quality milk will continue to increase. This benefits local consumers by improving availability and access to safe processed milk.

Introducing aseptic technology

Dairy processor Centrolac is a Tetra Pak customer in Nicaragua and was the first dairy processor in the country to bring UHT processed and packaged milk to the market. Due to lack of cold chain distribution in the country and seasonal milk production challenges, UHT technology enables the safe distribution of milk for up to 6 months without the use of preservatives or need of refrigeration. “We have an ambition to increase our milk intake and improve milk quality. In this way, more people will have access to locally produced quality milk the entire year and, at the same time, the livelihood of local dairy farmers will be improved,” says Alfredo Lacayo, CEO of Centrolac.

Working together in collaboration

We participate in Dairy Hub projects to support our customers in securing long-term supply of locally produced quality milk, while also enabling smallholder farmers to have access to formal markets. By providing farmers training services and setting up appropriate cooling infrastructure and technology, the supply of locally produced quality milk is increased.

Centrolac is at the heart of a Dairy Hub project supported by Tetra Pak, Tetra Laval Food for Development, DeLaval, and the US-based NGO, Venture Dairy.  In 2011, we initiated discussions with Centrolac and the organisations entered into a formal collaboration partnership.

Increasing smallholder farmer productivity

The average milk production per cow per day is estimated at 2-10kg, which is considerably lower than in more developed markets. The goal of the Dairy Hub project is to double production, thus increasing profitability for farmers. “Our goal for the first year was to have 20 farms using the services of the Centre, and that was reached” says Stefan Bergstrand, Dairy Expert at DeLaval and Food for Development. “These farms are functioning as model reference farms showing how milk production per cow can be increased, and how the quality of the milk can be improved. There’s practical training and advice about feeding, hygiene and animal health. We are already seeing interest from cooperatives who want to establish cooperation with the hub at central level to support their members,” Bergstrand added.