Page 92 - Agricultural innovation

the livelihood of local fishermen. The local fishing community is responsible for managing them
together for sustainable development.
• This model of co-mangement can be applied to other natural resources such as lakes, forest, etc.

5.12. Model of Contract Farming at Moc Chau Milk in Son La Province
5.12.1. General information
Moc Chau Dairy Cow Breeding Joint Stock Company (Moc Chau Milk) is headquartered in Moc
Chau Farm Town (Moc Chau District, Son La Province), 194 km northwest of Hanoi. Moc Chau Milk
is a joint stock company with the predecessor of Moc Chau Military Farm was formed in 1958 and
officially became a joint stock company in 2005. The company’s production and business activities
are quite diverse, including: raising dairy cows, supplying dairy cows, producing animal feed and
processing dairy products.
The company also built a feed processing factory, a milk processing factory, a dairy breeding
center, a technology transfer center, branches and distribution agents. in provinces and cities. And, the
most important point in the company’s operation organization is that nearly 600 farming households,
who are contracted to raise dairy cows, provide milk materials for processing finished products for
business, bringing benefits to customers and profit for the company.
Products of Moc Chau Milk’s are pasteurized fresh milk, pasteurized fresh milk, yogurt and some
other products such as cheese, butter, milk cake, cream, sweetened condensed milk... The company has
two big branches in Ha Noi and Da Nang and many other distributors, agents and establishments in
42 provinces and cities in Vietnam.

5.12.2. Model development
Moc Chau Milk’s people-participation model was formed from the requirement of renovating
production organization, improving production efficiency by motivating dairy farmers instead of
production with low labor productivity. The model of linkage between Moc Chau Milk and farmer
households is implemented in the form of contracting, a form similar to other livestock enterprises
in Vietnam.
However, the important difference is that the breeder must have a large capacity of capital to
rent land, invest in building barns, pay labor, etc., while enterprises only provide breeding stock
and livestock feed. Meanwhile, the majority of farming households in this area are poor and also
ethnic minorities. Thanks to Moc Chau Milk, besides having job opportunities, hundreds of farmer
households also joined the company’s livestock contract mechanism and significantly improved the
family’s income.
Depending on the conditions of the farmer households (land, experience, technique, labor...), Moc
Chau Milk has contracted more than 15,000 dairy cows and more than 1,000 hectares of land to 565
farmer households to raise dairy cows and grass for forage. The average livestock scale of contracted
households is 28 heads per household, some households have up to 180 heads. In addition to the number
of contracted cows or contracted households, livestock farmers can invest themselves to increase the
size of the herd. Many households have invested a lot of money to build farms, buy more breeding
cows, build waste and wastewater treatment systems.
In parallel with the allocation of cows and land, the company also implements preferential policies
such as providing loans up to 50% of investment capital needs with preferential interest rates and
payment period according to the production cycle to households, starch feed support (additional
to forage that the household can control on their own), grass variety of Alfalfa (imported) support,
livestock technical training, vaccination, artificial insemination, monthly milk price bonus.

Agricultural Innovation Review in CLV Countries 85