Innovative approaches to improve dairy development in Vietnam
A project was started in 2005 to increase the income of dairy farmers in Vietnam. Back then, Vietnam's dairy industry was performing poorly but things have become much more optimistic now.
To improve the dairy development in Vietnam, two innovative initiatives are discussed and they are the setting up of an incentive milk payment system for smallholders and the creation of a professional multi-stakeholder dairy organisation.
Incentive milk payment system
In Vietnam, farmers do not produce milk for home consumption but to generate income, which means the quality may be off the mark. Therefore, the project encourages professional dairy farming, and this system's goal is to set a certain price for a certain milk quality; the better the milk quality, the more money the farmer will get. A specialised software is used to calculate the payment for each farmer and they will receive their payment directly in their individual bank accounts.
The old system in Vietnam's dairy sector was complicated, unfair and not transparent, which resulted in poor quality and undermines sustainable dairy development. The new incentive payment system is set to change this, and its three key aspects are collaboration with processing companies, installation of testing equipment and the involvement of an independent laboratory.
The new system makes the farmers solely responsible for the quality of their milk, and the incentives will also encourage the farmers to produce good quality milk.
This article also touches on the multi-stakeholder dairy organisation 'Dairy Vietnam' and its ideals.
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Article made possible through the contribution of Food and Agriculture Organisation of the United Nations.