A Dairy Hub (DH) is a network of small Village Milk Collection Centres serving small-holder farmers in 20-30 villages and a central Mother Plant to which all milk is transported and then further delivered to a processing factory. The Dairy Hub partnership will help 20,000 smallholder farmers increase their productivity and generate revenues from the sales of processed dairy products.

Smallholder milk production is said to be a hidden resource in Bangladesh, yet to be utilized in the growing market for milk and dairy products. Milk produced by smallholder farmers could potentially generate income, employment, improve nutrition and increase food security across the rural households. The introduction of dairy hubs has triggered tangible changes in terms of household income, accumulation of assets, increased involvement of women in decision making and access to market and increased mobility within the community or beyond. Through the project, two already existing dairy hubs will be optimised and three new hubs will be established. Each hub is expected to reach about 3,000 dairy farmers and bring about an increase of their income by at least 50% by increasing milk production. It will benefit about 20,000 farmers, many of them women.

With a vision to transform Bangladesh from a net milk importer to milk surplus country, PRAN, with the support from De Laval and Tetra Pak, introduced the dairy hub model where individual farmers directly sell to the nearby chilling centre of PRAN. In this model, PRAN defines a periphery of around 40 square kilometre (this area may vary according to milk supply capacity) and position the hub at the centre. In the said periphery, they work in different villages and establish around 20 milk collection centres with chilling facilities. Each milk collection centre is called a VMCC (Village Milk Collection Centre). Each centre generally handles 100-150 farmers (this number may also increase according to the supply capacity) and records their details as member farmers. The Dairy Hub has become one of the dominant economic activities in the rural areas where it operates. It generates consistent income, create investment and employment opportunities in the distant rural area which are otherwise dependant on traditional cultivation of land only.

PRAN leads the Dairy Hub operations, and was initially supported by a Tetra Pak-sponsored full-time dairy expert.

Tetra Pak, PRAN, UNIDO, the Department of Livestock Services in Indonesia and the Swedish International Development Cooperation Agency (Sida).