Milk in crisis: Regulators unaware that butter is made from milk!
Entrepreneurs and state agency officials involved in the dairy manufacturing industry in Sri Lanka gathered last week in Colombo to discuss ways of achieving self-sufficiency in milk in Sri Lanka – with some startling revelations.
It was held at the Ceylon Chamber of Commerce (CCC) auditorium and organised by the All Island Dairy Association under the theme “Challenges in meeting emerging trends in the dairy industry.”
During the presentations and discussions it was revealed that while the present government and successive governments have done a lot to uplift this industry, it was pointed out that the regulatory authorities have become a major stumbling block in the country becoming self-sufficient in milk.
Duvindra Corea, one of the participants, said: “Today, the producer of milk is getting only Rs. 6 and there are milk farmers leaving their trade as they do not get a fair return on their hard labour and investment. This is the reality.”
“So, where are the issues?” he lamented. “I think you seriously need to look into our regulations and the policy to face the realities. If you are really interested in taking the dairy industry forward. If we are futuristic these are fundamentals.”
He remarked as to why the industry cannot get the opportunity to look into all the matters like the nutrition content and other pertinent matters to be considered, rather than the government sitting on everything.
He said that all the dairy manufacturers have their own R&D units and they are equipped with the know-how of nutrition and other essentials.
He said that producers today are not really making money out of business. While regulation should be a give-and-take process, today it is a policy of only taking. The industry could together develop a product to the required standards but in this space the regulators are fixing prices and the government is controlling the price.
Another participant, Gerald Suvendra from Cargills said that as producers they face huge problems as at time of importing machinery these are put to different categories without putting them into one category of the dairy industry. The most ridiculous thing is that some authorities who decide on allowing these machines do not even know whether “butter is made out of milk or not” and the basic products involved with the dairy industry.
He said that recently he attended a meeting at the Treasury where the authorities were to decide on concessions to the dairy industry. To his amazement he said that some officials questioned about ice-cream machinery and they were saying that ice-cream machinery is not meant for the dairy industry.
He said that they cannot wait another three to four years for the officials to understand that butter and ice-cream machinery (so to say) belongs to dairy industry.
Asoka Bandara, Management Consultant, Maliban Milk Products (Pvt) Ltd, said that milk has been used in Sri Lanka more than 2000 years ago and even in 1931 this issue arose in the Senate and some in the ‘Progressive Camp in the Senate had indicated ‘No grass for cows – No milk for children’.
In the 1960s and 70s the country was self-sufficient in milk, he said. With the opening of the economy the industry has expanded and so has the consumption. According to Central Bank figures, he said milk production in Sri Lanka in 2010 was 196 million litres while this production doubled in 2017 to 376 million litres.
He said that the ultimate processor gets only Rs. 6 per litre and they need a reasonable return on their investment for a reasonable period and to sustain this industry the prices should be affordable to the consumer.
The cost of production should be reduced to a reasonable level to make a profit and to strike this balance all the stakeholders should join hands and discuss and agree; but the point in issue is that all the prices are fixed by the government.