Optimisation of dairy farming in Peru on basis of local feed resources International prices for commodities – particularly grains like corn, wheat and soybeans – have surged during the last 5 to 6 years leading to severe pressure on the margins for poultry, pork or cattle farmers, for which feed is generally the main cost component. For dairy farmers in Peru the situation is aggravated by the fact that one company has a monopoly position by absorbing more than 80% of all produced milk in the country. Farmers have no room for negotiating the milk price.In the region of Ica, an opportunity is given by the fact that large amounts of organic matter are available, as residue from the extensive asparagus and artichoke production in the area. This green forage constitutes an excellent feed resource when converted into silage, that is far better digestible for cows.Neste Demeter B.V. (former Internationale Handelsmaatschappij "Demeter" B.V., Dutch trader in animal feed and supplements), Fundo Dona Pancha S.A.C. (Peruvian asparagus farm), Pancara S.A.C. (Peruvian dairy farm) and Four Oaks B.V. (Dutch farmer with long dairy experience), will set up a joint venture farm, with 350 Jersey cows, to exploit this opportunity.Substituting (part of) the high-grade corn-based feed mix by silaged asparagus foliage will obviously result in lower milk yields per cow, but partners expect that the reduction in overall cost will more than compensate for that, and increase the net margin per litre milk. The project will introduce tube silage technology to Peru, a fast, efficient and reliable way to preserve baled silage in an oxygen free environment that is ideal for maintaining feed quality. Traditionally, dairy farms in Peru have Holstein Frisian cows, which do not react quite well to the low concentrate feed. Therefore partners will introduce Jerseys that are better fit to use the forage silage. Finally, the farm will process the manure into compost and vermicast for asparagus farms of the local partner.Corporate Social Responsibility (CSR)CSR will be integrated in the joint venture's operations. Animal welfare is prioritised above yield maximisation by providing good and hygienic housing, healthcare and high-quality feeds which are low on concentrates. This leads to low incidence of illnesses and will extend the average cow life. The joint venture maximises the use of plant residues (for silage and compost making) and reduce use of imported substrates. Nutrients are recycled in compost and vermicast as input for local growers. Animal and environmental practices will be confirmed by GlobalGAP certification.Also, HRM policies will be implemented. The joint venture will pay its staff above average salaries and secondary benefits like free transport, free lunch, medical care and external professional courses. The joint venture will aim to maximise employment of women and will allow no child labour.Impact•	Employment and working conditionsThe joint venture plans to pay wages that are considerably above the average for the dairy sector in Peru, in order to attract high quality staff and minimise staff turnover.Workers will be contracted under the farm labour contract regulations as stipulated by the Peruvian Ministry of Labour. Signed contracts are deposited with the Ministry and all legal contributions (CTS, AFP, vacations, child support, EPS) are paid.Good and safe working conditions will be ensured mostly by using proper equipment and mechanising as much as possible for lifting of heavy loads and training of staff in safety aspects.Fringe benefits for personnel include free transport to and from work, free meal per shift, free access to the services of a medical doctor who will visit the farm twice weekly.The company will have a policy of promoting sport groups, mainly football and volleyball, that improves physical health and well-being of the personnel involved, apart from the camaraderie and strengthening of group ties among the staff.•	Innovation/Transfer of knowledgeThe core of the innovation is a new dairy cow diet (which is a substitution of high grade corn-based feed mixes with (tube) silage made of asparagus and artichoke residues, corn and supplements) in combination with the introduction of a new dairy cow (Jerseys instead of Frisian-Holsteins). This combination leads to more efficient milk production. Also, GlobalGAP is new in the diary sector of Peru and large-scale vermicast composting (conversion of compost into earthworm castings).•	Chain effectsThree outgrowers will be contracted for corn and one for artichoke. They will receive training, and land preparation and harvesting services of the joint venture. The local partner will provide asparagus foliage. Two external persons will be hired for transport of milk.Dairy companies are 75% short of milk supply for its cheese factory. The milk which will be provided by the project will be higher in casein content than regular milk due to which it is more appropriate for processing. This will also lead to more employment at the cheese factory.Furthermore, sourcing of milk will be nearer leading to less logistical costs.In the spin-off phase, the joint venture will sell Jersey diary heifers to other milk producers which subsequently will have higher yields than with their current cows.•	Impact on the sectorThe Animal Nutrition Department of the University Nacional Agraria La Molina will be involved for lab tests of animal feed ingredients and other comparative studies. The Universidad Católica de Santa Maria de Arequipa will be involved for in vivo digestibility tests of silages of varying compositions. AGELEP will be involved for dissemination of project results. NSF del Peru will be engaged for the audit on GlobalGAP diary certification (which is totally new for Peru).Through the Peruvian dairy producers association AGELEP, knowledge generated from the project will be shared in the sector (publications are mentioned in the project results). It is expected that dairy farmers will adopt at least some of the improved practices. Furthermore, it will be promoted that horticulture producers will transform residues as feed for cows. At the end of the PSI phase an open day is organised.•	EnvironmentBasic recycling of organic matter (ultimately requiring less grain production and saving water) and use of European animal welfare standards.•	Position of womenNeutral. Optimisation of dairy farming in Peru on basis of local feed resources by setting up a dairy farm with 350 Jersey cows, fed on a low concentrate feed of asparagus and artichoke foliage silage.