Land O’ Lakes and International Development

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Across the United States, Land O’Lakes is best known for its delicious brand of premium butter. Behind the scenes, Land O’Lakes is the second largest cooperative in the nation with approximately 9,000 employees, 3,200 farmer members and 1,000 member cooperatives which serve about 300,000 agricultural producers spanning all 50 states. Together, they handle about 12 billion pounds of milk annually. Dairy represents one-third of Land O’Lakes $10 billion agribusiness. What most don’t know about Land O’Lakes is that they do business in over 50 countries as well.

As part of their strong belief in corporate social responsibility, Land O’Lakes Inc. established an International Development Division in 1981. It is the only Fortune 250 Company to have its own international development division. They aim to help farmers around the world improve the efficiency of markets and the viability of agribusinesses to promote economic development and help lift people out of poverty.

The following is an excerpt from an interview between Jon Halverson, Vice President for International Development at Land O’Lakes, and DevEx Impact Journalist, Andrea Useem. It was based on a recent forum between agribusiness leaders from Land O’Lakes, Cargill, and Elanco.

What messages came through in the forum?

World population is set to reach 9.2 billion by 2050, and we need a tremendous amount of innovation and productivity increases in the lesser developed countries, which have huge amount of undeveloped arable land. To meet the growing need in front of us, some experts estimate that up to 70 percent more food will need to be produced. The work we’ve done in Land O’Lakes International Development for the last 30 years is moving us toward meeting this growing demand.

It’s unfortunate that often development gets put into one camp, and commercial activity is put in another. Because Land O’Lakes International Development division is under the corporate umbrella, we can bring to bear the best of our corporate capability, in terms of crop inputs, animal nutrition and dairy cooperatives. That experience influences how we think about development. We want to issue a call to action to our peers in the industry to let them know that this model works.

How does Land O’Lakes as a company benefit from engaging in international development work?

We are very active in international development in sub-Saharan Africa and poor regions of South Asia in particular. Those areas happen to contain a number of high growth markets, where there is a significant emerging middle class. All three of Land O’Lakes’ main business units — crop inputs, dairy and animal nutrition — are very applicable to the growing market demands in Africa and South Asia. We envision blending development work with seeding commercial opportunities. It is important that all our development work have an exit strategy and a sustainable model that encompasses the private sector from the beginning.

The developing world is changing, but I want to be careful when we talk about the emerging middle class. Some say there are as many as 200 to 250 million people in Africa  who are now getting to the point where they buy their own transportation, and more convenience food, who can look ahead more than six months and save money– all the markers of being in the middle class. But there are still 250 to 450 million people in Africa who are extremely poor, and most of them are in agriculture – they are smallholder farmers.

One thing Land O’Lakes does well as a company, and as the second-biggest cooperative in the U.S., is to work with livestock and dairy farmers. Those are fantastic crops in Asia and Africa that can provide a constant source of income and nutrition through the year – milk is both a consumed crop and a cash crop. When you set up a milk collection center and a chilling center, you add value at the local level. Land O’Lakes views development work as setting the table for serving its own consumers better. We have many global customers in these regions, and we can be a strategic supplier.

– Maria Caluag

Sources: Devex, Impact,Land O’Lakes, Inc.
Photo: The Economist

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