Beckwood Dairy, a processing company located in southern Malawi, has successfully launched an initiative that enables smallholder farmers to purchase cows at reasonable prices and on appropriate terms. Under the innovative “heifer loan scheme,” which is supported by Land O’Lakes International Development through funding from the United States Agency for International Development (USAID), farmers purchase cows through loans that are repaid by deductions from milk sold to the dairy’s milk bulking facility.

Loans for the heifer scheme are offered to farmers through financing from Lilongwe Dairies, a company based in Malawi’s capital city. Beckwood Dairy works with the Central Region Milk Producers Association to safeguard against the risk of default by guaranteeing farmer loans.

Beckwood Dairy hosts a milk bulking facility and breed animals for more than 170 smallholder farmers in southern Malawi.

Under the Malawi Dairy Development Alliance, a Global Development Alliance funded in part by USAID and managed by Land O’Lakes International Development, Beckwood Dairy has expanded its business to produce dairy heifers for the northern and central regions of the country as well. According to the owner of Beckwood Dairy, Mrs. Charity Wilton, under the public-private partnership, INDEBank Malawi has provided a loan that has allowed the dairy to purchase a cattle trailer.

“We can transport animals [and] ensure doorstep delivery of the animals to farmers,” said Wilton.  “This initiative will ensure accelerated dairy herd expansion in Malawi and will help meet consumer demand.”

Increasing dairy production and productivity and ensuring the commercial sustainability of farmers have a direct positive impact on household income and family nutrition. By the end of 2008, more than 4,500 rural households will have benefited from USAID’s interventions in dairy production and productivity in Malawi.