Starter Kit. Idea 271 of 500. Cluster 14
A farmers' co-operative dairy in the hill country selling cheese and yoghurt under its own brand
The mechanism, from the book
The smallholder sells raw to a collector at the gate and the collector sells to a packer who puts his own name on it. Denmark's farmers got rich the day they owned the creamery.
The first step
Make a small batch of set yoghurt from co-operative members' milk, pot it with a simple label naming the farms, and take it to two hill-country hotels and a supermarket manager in the nearest town. Ask each to stock it for a week on sale or return. What sells through in that week, and the price the manager will pay, tell the farmers what their milk is worth once they own the product.
- Who pays first
- A hill-country hotel that wants local yoghurt and cheese on the breakfast table and can charge guests for the farm's name.
- What leaves today
- Farmers sell raw milk to a collector, and the brand, the processing and the margin belong to whoever puts the name on the pot.
Ask first
- Department of the Registrar of Companies. Ask which co-operative or company form lets farmers own the dairy together.
- the area Medical Officer of Health. Ask what a small dairy must show before selling cheese and yoghurt.
Check before you spend
Whether the dairy room has food approval, and whether each member signs a binding supply contract before the dairy borrows to build.
Find out these three numbers
- What do hotels pay for cheese and yoghurt now?
- How much milk do members supply each day?
- What does the dairy equipment cost?
A comparison from the book
Denmark. Chapter Eleven
"Denmark went on to build branded, graded butter and bacon, and got rich doing it."
Owning the dairy is what turned Denmark's farmers' milk into branded money.
The test
Does it keep value that now leaves the island, or build the proof that lets somebody else do so?
From the appendix of Why Not Sri Lanka? by Dr Maheshika Halbeisen. The idea and the mechanism are the book's; this kit was written for the site.