Arla Foods Annual Report 2020
Management Review
Our Strategy Our Brands and Commercial Segments
Our Responsibility Our Governance
Our Performance Review
Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
INTERNATIONAL DAIRY
DEVELOPMENT
Contributing to the development of a sustainable and commercially viable dairy sector, improving farmer capacity and providing
nutritious food to a growing population in selected emerging markets is a key priority to Arla. Despite delays caused by
Covid-19, we continued to strengthen our partnerships in 2020, and we have now enrolled 1,000 farmers in our programmes.
As part of our 'Stronger Planet - Stronger People'
sustainability strategy, we engage in partnerships
to support national dairy sector development in
emerging markets. Through these strategic
cross-sectorial partnerships we work to promote
sustainable dairy production, enhance food safety
and quality, improve food security and provide
access to affordable nutrition for low-income
consumers. Despite delays in the implementation
of our programmes across all countries, we
managed to reach our 2020 target of having
enrolled 1,000 farmers in our programmes.
ADVANCING LOCAL DAIRY
DEVELOPMENT IN NIGERIA
By 2050, Nigeria's population will be twice as big as
it is today reaching nearly 400 million people, which
means that the demand for nutritious food is
increasing rapidly. Since 2015, Arla has been the
lead commercial partner in the cross-sectorial "Milky
Way Partnership in Nigeria" with among others the
Danish Agricultural and Food Council/SEGES, CARE
Denmark and Nigerian based NGOs, supported by
the Danish Ministry of Foreign Affairs.
The Milky Way Partnership has reached more than
400 farmers, but one of the most challenging parts
of the project is to reach a sufficient volume of milk
intake. During 2020, focus was on capacity building
of local farmers as well as adjusted off-take
arrangements and new partnerships to increase the
number of farmers enrolled. Among others, the
Milky Way Partnership programme was scaled up
through its participation in the public private
DAMAU Household Milk Farm Project with Kaduna
State Government with the aim of settling 1,000
farm households in a 9,000 hectare area by
providing infrastructure and three imported cows
for each farmer. Arla also signed an agreement with
SAHEL Consulting under the Melinda and Bill Gates
Foundation to enrol additional 600 households
from surrounding farm clusters in Kaduna State.
SUPPORTING THE LOCAL
DAIRY SECTOR IN INDONESIA
One of the largest challenges in the Indonesian
dairy sector is the dairy milk production shortage
in terms of quality and quantity, to meet the
increasing consumer demand. Since 2018, Arla
has worked together with our Joint Venture partner,
Indolakto, and one of the largest local dairy
cooperatives in Indonesia, KPSP Setia Kawan,
setting up a calf rearing centre in East Java. The
rearing centre rears calves into high quality cows
through good rearing practice and sells them at a
fair price to local farmers, who also receive training
in good dairy farming practices. This way, local
farmers can have access to high quality cows,
which are guaranteed to produce a high quantity of
milk and provide more income for a living.
Today, the rearing centre is a separate business unit
of the cooperative, which aims to provide sustainable
income from selling cows. During 2020, it provided
more than 60 high quality cows to local farmers, 15
per cent cheaper compared to the usual market
price, while still creating a commercially sustainable
social enterprise independent of external funding.
This was despite the reduced purchasing power
during the first half of 2020 due to the impacts of
Covid-19.
Read more about our international
dairy projects in emerging markets in our
Responsibility Report 2020.
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