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Cooperatives and family farms

Cooperatives and family farms
The main objective of Danone is to bring health through food. In addition to this, our company strives to make a contribution to the national economy, improve the quality and length of life of our citizens.
 
"A company only exists and lasts because it creates value for the whole of society (…) a company’s raison d’être is its social usefulness. That means serving society – men and women – in their everyday lives, through products, services, work or the dividends it pays” said Franck Riboud, Danone Chairman & CEO в 2008.  A year later was created Danone Ecosystem Fund which approved the first socioeconomic project of Danone in the world – Ukrainian project “Development of Dairy Cooperatives”*.
 
Danone supports agrarian sector of Ukraine, especially private. Today the farms produce up to 80% of milk in Ukraine, half of which is consumed by the milk-processing enterprises. Many villagers live below the poverty line today and survive only thanks to what they produce. 30 villages disappear from the map of Ukraine each year and 35 % of rural residents receive income below the subsistence level. Socially responsible business can help improve the living conditions of villagers in this difficult time, and at the same time improve the quality of agricultural production, in this case – milk.
 
The quality of milk from individual farms leaves much to be desired: the cows are milked with hands, which leads to the ingress of bacteria from the hands of a milkmaid, milk is poured into the buckets or tanks and is not cooled, transportation in vehicles without cooling equipment. As a result is poor-quality milk that can not be used in production. Accordingly, inefficient organization of work, procurement of milk and its low quality are the main limiting factors for the increase of income from the sale of their products.
 
All this has pushed our company to invest in the private sector of Ukraine – cooperatives and family farms.
 
Dairy cooperatives help people organize and improve overall access to the market of milk. On the basis of individual farms, cooperatives jointly agree the price of milk to processors, jointly purchase equipment and improve the productivity of their cows through a variety of services and programs.
 
Family farms (5 or more dairy cows) help people earn more income from milk production at a relatively constant cost of labor. The family farm can improve technology, increase milk yield by 10-25 %, improve the quality of the milk and gives the opportunity to manage seasonality of milk (sell at a higher price in winter).
 
With the support of our partners in 2011 Danone has built a demonstration and training farm with 60 cows (with plans to expand to 120) in the Dnipropetrovsk region.** The farm serves as a visual model for cooperative members on the maintenance and care of the cows; trainings are provided for those, who are willing to create a family farm.
 
In 2013 Danone Ukraine has launched another initiative, strawberry cooperatives ***. On June 11, 2013 was assembled the first harvest – 150 tons of strawberries in Losiatynn cooperative of Ternopil Region. The launch of cooperatives produces positive social impact.
 
The project officially created 65 new jobs in Losiatyn Village , more than 500 families are provided with the point of sale, and therefore a stable income. In addition, Danone also takes care of the smallest inhabitants of the village; the staff of the company set children playgrounds in many villages.
 
During the first 5 months of 2013:
 
- land was allotted and prepared for planting another 10 ha of strawberry;
- the premises for the cooling chamber were completely overhauled and refrigeratory equipment was installed;
- a thermo-truck with the load capacity of 5 tons was purchased for delivering strawberries to processing plants;
- a power transmission line was connected to the cooling chamber and a new transformer was installed;
- 90 peasant families used services of the Coop (including the purchase of seedlings at wholesale prices);
- 58 people got official seasonal employment, which allowed them to obtain unemployment benefits during the off-season period. Each of them earned about 3,800 UAH per season on the average.
 
Danone invested 2.85 million Euros into the village projects through the development of cooperatives and dairy farms in Ukraine.
 
Cooperatives and family farms are an integral and important part of not only social initiatives of Danone, but they also ensure the needs of dairy processing plants with raw milk. Strawberry harvest in 2013 covered 100% of the demand in the strawberry of Prostokvashino products.
 
For more details on the mechanisms of support and development of cooperatives and family farms you can find in the Production section.
 
*Danone in Ukraine project "Development of Dairy Cooperatives" implemented together with the international charity organization “Community Interests” (Heifer Ukraine http://heifer.org.ua/ ) and with the support of Danone Ecosystem Fund (http://ecosysteme.danone.com ) and Heifer International.
 
**The "Cooperative training farm and services" Danone in Ukraine implemented together with the international charity organization “Community Interests” (Heifer Ukraine http://heifer.org.ua/ ) and with the support of Danone Ecosystem Fund (http://ecosysteme.danone.com ) and Department of foreign affairs, trade and development. Canada /SOCODEVI (http://www.socodevi.org/ ) through GS Dnepropetrovsk agricultural Advisory Service (http://dsks.com.ua/ ).
 
*** The "Ekofrukt" Danone in Ukraine implemented together with the international charity organization “Community Interests” (Heifer Ukraine http://heifer.org.ua/ ) and with the support of Danone Ecosystem Fund (http://ecosysteme.danone.com ) and Heifer International.

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