In every country where Danone manufactures fresh dairy products, the supply of raw material is almost exclusively local. Therefore business activities of many small farmers strongly rely on business with Danone. In Ukraine, 80% of milk production comes from small farmers whose revenues are currently among the lowest in the country (less than 100 Euros per month /per person in rural area). Their population is in strong decline which represents a real danger for the Ukrainian countryside. Through the Danone Ecosystem Fund, Danone is seeking to support dairy production and to improve living conditions and incomes of such farmers.

By joining forces with Heifer-Ukraine (NGO specialized in rural community development with strong expertise on cattle management and agriculture), Danone Ukraine launched the Ukraine milk communities project which aims at creating 20 agricultural cooperatives, each including between 60 and 80 smallholders. These cooperatives are set to strengthen its small dairy producers and add value to the entire agriculture output. Based in regions close to Danone production site in Kherson the coop will be built on three pillars:

• Milking and storage equipment that must improve dairy quality and productivity,
• Agricultural and business development training to improve farmers' knowledge and skills,
• Shared agricultural services (milk collection and cooling, fodder preparation, veterinary, etc.) that must help optimize costs.

The second phase of Ukraine milk communities project has just been approved after a successfull first phase of implementation. The objective of this new phase is to strenghten the 20 existing cooperatives and engage more farmers through diversification of services provided by the cooperatives.