Thriving Local Businesses Provide Jobs to Thousands in Afghanistan

DEHDADI DISTRICT, Balkh Province – The automated machine turns every few seconds and fills the empty cartons with yoghurt in equally proportioned short bursts. The cartons turn around and are machine labelled with the logo of the Balkh Dairy Union (BDU). Two young men, wearing uniforms of the factory, organize the labeled cartons in a package and cart them outside.

Every day, 5,000 liters of fresh milk come to BDU’s local pasteurization factory. The factory pasteurizes milk and produces yoghurt, cream, butter, buttermilk, and other dairy products, supplying markets in Mazar-e-Sharif city in Balkh Province. “Since we supply a whole range of pasteurized dairy products in Mazar-e-Sharif markets, we hope to compete with imported supplies and meet the needs of consumers,” says Qiyamuddin of the Livestock Development Union (BLDU), which BDU is a part of.

The dairy factory, located in in Dehdadi district, southwest of Mazar-e-Sharif city, was established through the joint efforts of the United States Agency for International Development (USAID), Food and Agriculture Organization (FAO), Ministry of Agriculture, Irrigation and Livestock (MAIL), and farmers of Balkh Province in June 2007.

In its early days, the factory operated on a very small scale and was able to pasteurize only 2,000 liters of fresh milk daily. Production levels increased to 4,000 liters per day in 2013. “Although our production had increased, we faced many challenges,” says Qiyamuddin. “Our packaging was not systematic, the workers were not trained enough, and we had not figured out a market for our products.” 

It was at this point that the Ministry of Commerce and Industries through the Afghanistan New Market Development Project (ANMDP) paved the way and provided marketing and sales support to the factory. ANMDP, launched in May 2011, is a cost-sharing program to support small and medium enterprises and business associations with access to business development services to enhance their productive capacity and encourage innovation through product and market diversification. It is supported by the International Development Association (IDA), the World Bank Group’s fund for the poorest countries.

“With support from ANMDP, we were able to expand our customer base,” says Habibullah, 58, a BLDU board member. With technical support from ANMDP, BDU addressed its packaging and labeling issues. The factory also improved its production capacity, increasing the production of pasteurized milk to 5,000 liters per day.

Employment Opportunities

The factory collects fresh milk from 15 Milk Collection Centers (MCCs) across Dehdadi and Nahri Shahi districts. The MCCs procure milk directly from dairy farmers, most of whom are women, and pay 20 afghanis (about $0.30) per liter. With ANMDP support, the collection of fresh milk has increased and created jobs for many more.  Today, the factory employs 45 people from the districts.

Farmer Mohammad, 46, from Dehdadi district, is one of many who have benefited from BDU’s growth. “My son was jobless two years ago, but now works with the cows I bought when the demand for fresh milk increased,” says the father of nine. “We sell an average of 40 liters of milk per day to MCC and earn 800 afghanis ($13).”  

ANMDP is being implemented in four major urban cities in Afghanistan—Kabul, Mazar-e-Sharif, Jalalabad and Herat. ANMDP started work in Mazar-e-Sharif in 2013 and by September 2016 it covered 145 organizations in several sectors, including manufacturing and health. ANMDP provides support to these organizations in areas such as technical training, marketing, sales support and hiring of experts. It also provides support to enterprises in the application process for ISO certification.

ANMDP activities have equipped many private small and medium companies in Balkh Province to grow their businesses. “As we evaluated the usefulness of ANMDP after implementation, all the companies under our coverage have seen 16 percent growth in their businesses,” says Sayed in Mazar-e-Sharif city. Not only has the project helped these companies expand their businesses, it has also equipped them to tap and meet demand from previously unexplored markets. The boost to businesses has strengthened the local economy and helped create jobs in northern Afghanistan.