ICT and AG Profile: Parmalat

Supported by USAID’s Fostering Agriculture Competitiveness Employing Information Communication Technologies (FACET) project under the FIELD-Support LWA, this profile discusses Parmalat, a large-scale dairy company using a direct deposit scheme to pay its network of small-scale milk farmers in Zambia. All contracted dairy farmers supplying the company are registered. Farmers must establish a bank account with an institution that can accept electronic deposits, but are able to pick their own institution, as no particular bank is specified. During the procurement process, farmers deliver their production to a local milk collection center (MCC) where it is consolidated, cooled, and transported via tanker to the company processing plant. The MCC notes the milk volume and grade of every individual farmer and transmits this information for each tanker. Upon arrival of each tanker at the processing plant, the company reviews the information sent by the MCC and validates the volume and grades sent. This information is compiled in a database for the overall “milk system” of the company. On a monthly basis, the company issues reports on the volume and grades of the milk delivered by each MCC. The MCC shares this information with the individual farmers for validation or discrepancy claims. Based on the validated volumes of milk delivered by each farmer, the company directly deposits payment into the farmers’ respective bank accounts.

The FACET project aims to help USAID missions and their implementing partners in sub-Saharan Africa use information and communications technology in sustainable and scalable approaches to improve the impact of their agriculture related development projects.