New dairy project targets small farmers
Published:Wednesday | June 30, 2010 | 12:00 AM
The Beef and Dairy Producers Association of Jamaica (BDPAJ) is pouring J$80 million into a milk-production facility for 50-60 small farmers, who will hold equity in the business.
The new Northern St Catherine Dairy Cluster will operate from leased property, formerly the Wallen Dairy Farm, in Linstead.
Balteano Duffus, general secretary of BDPAJ, said J$24 million would be used to purchase equipment and do infrastructure work at the farm, while the other J$56 million will acquire livestock.
He said the cluster projects output of two million litres of milk from some 625 heads of cattle.
"It will not be a cooperative," Duffus said. "That sort of model doesn't work in Jamaica. It will be run as a business."
A company called Beef and Dairy Products Limited has been established to manage the implementation and operation of the farm.
The BDPAJ will be working with the Rural Agricultural Development Authority (RADA) to select the 50 participating farmers.
"We will basically have a lotto system in order to have transparency and fairness," said Duffus.
"RADA would be part of the system where we would do a draw for the people that we need, but 25 per cent of the applicants will be females."
Each applicant would have to invest a maximum of 10 cows each.
Those without cows will be encouraged to lease cattle. The leased animals will not be delivered to farmers but instead will be placed to their account on the 'cluster' farm.
Repayment of the lease will be deducted from the revenue from milk due to the farmer, and will be done over 84 months or seven years.
Milking herd
The farm will carry a 625-head milking herd: 500 to be contributed by participating farmers, and 125 owned by BDPAJ as core stock.
Participants in the programme would get returns from milk production and from the calves that their animals produce while in the programme.
Assuming a 50:50 sharing ratio, a mortality rate of 10 per cent, and a price of $10,000 per calf, each farmer could earn an additional J$45,000 per annum from calf sales, said Duffus.
Earnings from the sale of cull cows will be used to purchase replacement stock. Farmers could boost their earnings even more by direct employment on the project farm and/or producing crops for feed ration for the farm.
Duffus said the farm would supply all the milk it produces to the Century milk processing plant, owned by the Jamaica Dairy Farmers Federation, thereby enabling farmers to participate in and earn from the entire value chain.
Currently, the Century plant is producing at approximately 70 per cent below its rated capacity and unable to meet its supply contracts because of insufficient supply of locally produced milk, he said.
The project is expected to begin within the next four to six months and is being funded though a loan from the Development Bank of Jamaica with additional funding from the Inter-American Development Bank's Multilateral Investment Fund.
Jamaica's dairy industry was basically wiped out by trade liberalisation between 1992 and 2005, during which more than 500 medium to small-scale dairy farmers exited the market.
As a result, local fresh milk production fell from 38.8 million litres in 1992 to 14 million litres in 2008.
Cabinet on June 10 signed off on the 25-year lease of the Wallen Farm to BDPAJ.