Involvement of small-scale dairy farms in an industrial supply chain: when production standards meet farm diversity

Abstract

In certain contexts, dairy firms are supplied by small-scale family farms. Firms provide a set of technical and economic recommendations meant to help farmers meet their requirements in terms of the quantity and quality of milk collected. This study analyzes how such recommendations may be adopted by studying six farms in Brazil. All farms are beneficiaries of the country's agrarian reforms, but they differ in terms of how they developed their activities, their resources and their milk collection objectives. First, we built a technical and economic benchmark farm based on recommendations from a dairy firm and farmer advisory institutions. Our analysis of the farms’ practices and technical and economic results show that none of the farms in the sample apply all of the benchmark recommendations; however, all farms specialized in dairy production observe the main underlying principles with regard to feeding systems and breeding. The decisive factors in whether the benchmark is adopted and successfully implemented are (i) access to the supply chain when a farmer establishes his activity, (ii) a grasp of reproduction and forage production techniques and (iii) an understanding of dairy cattle feed dietary rationing principles. The technical problems observed in some cases impact the farms’ dairy performance and cash position; this can lead to a process of disinvestment. This dynamic of farms facing production standards suggests that the diversity of specialized livestock farmers should be taken into account more effectively through advisory approaches that combine basic zootechnical training with assistance in planning farm activities over the short and medium term.

Keywords

• production model
• collective investment
• feeding system
• cash flow
• Brazil