The five-year project, implemented in partnership with the Austrian government, is expected to help 40,000 small- and medium-scale dairy farmers access financing, boost production, cut greenhouse gas emissions, and gain access to export markets. As well as supporting the development of dairy cooperatives, it will help farmers implement climate-smart, sustainable farming practices that meet global requirements, according to IFC.
“Ukraine has the potential to become a low-cost producer of high-quality milk,” said Jason Pellmar, IFC’s regional head for Ukraine, Moldova, and Belarus. “Our new advisory program will help bring in the right expertise, skills and technology, which will help crowd-in more private investment, unlock the industry’s potential, and enable the country to become a global dairy player.”
Investing in the modernization, growth, and efficiency of the industry would also enable Ukraine to double its milk production by 2030, Pellmar added.
The project is aiming is to reverse a recent slump in Ukraine’s dairy industry, with milk production expected to fall by 3 percent in 2017, after a 4 percent decline in 2016. The country now produces around 10 million tons of raw milk per year, official figures showed. In the longer term, IFC expects the advisory initiative to help bring in new investment. A one million ton increase in production could create additional investment opportunities, estimated at about $1 billion.
Through 2019, IFC’s advisory team will design, test, and evaluate competitive and sustainable dairy farming business models at various pilot farms – from small family-owned farms to cooperatives and large holdings – and work with dairy processors and banks to modernize supply chains. The project is expected to be rolled out country-wide in 2020.
IFC is a major investor in Ukraine’s agribusiness sector, having invested over $1 billion to support projects across the value chain, boost innovation, and help producers enter new export markets.