Building a financially strong and stable dairy cooperative in Kuningan region Dairy cooperative KPSP Saluyu Kuningan was established in 2006 as a result of bankruptcy of large dairy cooperative, called Dairy Sri, in Kuningan region. The cooperative split up in three smaller groups of which two cooperatives and one farmer group. The competition is fierce. Milk collection centers are lined up all three next to each other. Farmers also use this to try to get the “best” deal. Competition is mainly about the milkprice, relation with the vet/paramedics and loan facility. 

The cooperative produces good quality milk due to e.g. the good infrastructure with cooled milk collection centers. Payment system is transparent with clear overviews produced on a monthly basis during payment. Also each cooperative member receives financial overview of the cooperative before the GAM. 

Challenges of the cooperative are on the strategy to be followed. Aim is to build a strong financial stable cooperation which operates cost efficient. As the current infrastructure with cooling tanks requires larger volume to make it more cost efficient. The experts suggest to follow a feed strategy next to focus on quality. For farmers it is difficult to obtain roughage. Also the quality of concentrate could be improved, though will make it more expensive as good ingredients are expensive. But better concentrate will result in higher milk production, which will result in higher turnover for farmers and makes it more attractive to invest in cows, as well it could attract other farmers to become a member. 
As both board and staff haven’t received any training, except for some government trainings, financial knowledge could be further improved. As on the financial side, the board is operating on an executive level, the role of the supervisors is very important. Guidance in the role as supervising is recommended, but carrying out an independent financial audit will also support them.

During the assessment the board, supervisory board and management seem very open in providing the information. It was clear that they would like to move forward and wanted to make a success of the cooperative. Although most of them are linked to the previous/former cooperative, they seemed to have learned from this and do whatever they can to make the cooperative transparent. 
One of the criteria from Agriterra for support is that the cooperative should have minimal 1,000 farmers. Although this is not the case for Saluyu, it was decided beforehand that this criteria in this case should not be taken into account, in view of the relation with Friesian Flag. Based on the findings, Agriterra has presented an overview of the activities to be carried out coming year. Some of the activities were selected by the cooperative. For the rest of the year 2015, Agriterra will support KSPS Saluyu with: 
•	Audit financial year 2014
•	Financial management training: to update knowledge about financial management
•	Training in task and responsibilities of (supervisory) board
•	Advice on procedures saving & loan activities
•	Support in development of improved feed (preliminary, depends whether project of Netherlands Embassy will support Saluyu directly). 
•	Developing strategic plan
Training of trainers for paramedics and vets (capabilities to  communicate information and train farmers

1) Increase production to 10,000 liters of milk per day
2) Attract more members
3) Strategic plan in place