Towards self-sufficiency in milk

Increasing local production of milk has become important since milk prices increased several fold and created hardships to many people. The Marga Institute was the venue for a seminar last week on the dairy industry. This seminar was of national significance as the ideas brought out at this seminar require feeding into policy issues on dairy development. Further discussion of these ideas could provide the basis for a national dairy development policy. The point of departure at this conference was that increase in international prices for milk and milk products had at last removed a serious constraint and obstacle to dairy development. The higher prices for milk gave producers an incentive price that is bound to ensure a supply response.

A technical paper presented at this seminar noted that supply response for the price increase could be very significant. Already there is evidence of a quick supply response as there is a market for local milk at remunerative prices for producers. This has to be capitalized to make the country more self-sufficient in milk. However there are many constraints that have to be removed if this favourable environment of competitive prices could be capitalised to the full.

Many discussants at the seminar pointed out that while rise in prices provided the correct environment and incentives, the extent of response would depend on a number of factors that should be addressed to remove the constrains in inputs, finance and natural resources. It must be recognized that there are serious constraints to increase milk production. These include the fact the milk yield of local cattle is very low,only 1 to 1.5 litres. Importing high yielding cows is expensive, would take time and may be suitable to only some terrains in the country. There are constraints in grazing lands and even of water, as milk producers require many litres of water to produce a litre of milk. The country’s dairy development policy must take into consideration these constraints.

One of the most important suggestions made at this seminar was the capacity of increasing milk production with the existing herd of cattle with very simple and low cost methods of caring for existing village herds. It was pointed out that if the cattle were allowed to graze on a longer lead and were given more water several times a day, the yield of the low yielding cows could be increased. It was pointed out that improved herding and feeding practices could double their milk yields though even these would be considerably lower than those of good breeds of cattle. Since the local cattle herd is large in number, it is estimated that the small increase in their yields would increase total milk production in the country substantially. It was estimated that milk production in the country could be doubled in this way. There is every reason that the government should make this the immediate strategy for it is a least cost method of increasing milk production. What is essentially needed is an effective means of conveying these improved methods of caring for cows that would increase milk production.

There are only a few large companies in milk production. They too are important players and policies must be devised to encourage their expansion of milk production. This would include the provision of lands for grazing of cattle, assistance in the importation of high milk yielding strains of cattle, increasing the breeding of these cattle by such means as artificial insemination and having a systematic method of milk collection. Above all, the government must have a clear policy that helps the industry. These include clear policies on tariffs for the importation of milk powder in particular and the funding of research, provision of extension and veterinary services and improvement of rural infrastructure.

Over time the consumer preference has been for powdered milk. Sri Lanka is one of few countries where powdered milk is the main form of milk consumption. There are historic reasons, as well as reasons of convenience, associated with this preference. Consquently the increased milk production is expected to be processed into powder. The question was raised as to whether the huge cost involved in changing fresh milk into powder was justified and whether it would not be a better allocation of resources to spend the money on production of milk rather than in processing. This is an important issue for policy makers. The current preference for powdered milk could be changed to a preference for fresh milk by improved marketing of fresh milk and developing a taste and liking for it.

The discussion at this Marga seminar made it clear that the country’s milk production must be increased by a multi pronged strategy as milk production in the country is in several different modes of production. There are farm households that have a single cow or two as an ancillary occupation that provides not only milk but draught power and fertilizer. Then there are the herds of cattle in some parts of the country. It was pointed out that two of the setbacks to milk production in the past were the land reform of 1972 and 1974 that fragmented and reduced the size of medium sized estates particularly in the coconut triangle that led to dairy cattle herds being reduced. This implies that there should be new land policies that encourage dairy development. Estate areas have cattle as an important ancillary income generating opportunity. This is a potential prospect for dairy development. Buffaloes are an important source of milk and draught power.

The increase in high fat buffalo milk production is an approach that should be pursued in earnest. The production of milk by companies with high yielding cows is quite a different proposition and likely to be an important means of increasing milk production as well as production of milk products like cheese, yogurt and curd.

What is very clear is that sharp increases in price of imported milk have provided the backdrop on which a viable and sustainable milk industry could be developed. This requires essential infrastructure support and clear policies on dairy development. The government must provide an economic environment and infrastructure that is conducive for private sector investment. Research and extension services for dairy development must be strengthened. If these could be established, then the country’s milk production could be increased appreciably in the next five years. It is time for the country to develop a dairy development plan and pursue its implementation to achieve increased milk production in the country.