Competitive Dairy ValueChains in Southeast AsiaDairy Expert Roundtable MeetingDecember 8 & 9, 2010,Muak Lek, ThailandEdito...
The Centre for Development Innovation (CDI) works on processes of innovation and change in the areas of secure and healthy...
Competitive Dairy Value Chains in Southeast Asia – Part IIDairy Expert Roundtable Meeting, December 8 & 9, 2010, Muak Lek,...
Table of contentsPart II – PowerPoint presentationsGlobal trends and their implications for dairy development in South Eas...
Recent development of dairy industry in Indonesia   Adiarto, Universitas Gadjah Mada
12/22/2010Global Trends and their Implications for                    Content of the presentation Dairy Development South ...
12/22/2010Large scale dairy farm Malaysia                                  Milk collection from small scale producersSome ...
12/22/2010  Dairy trends – Policy related trends                   Dairy trends – Policy related trends   Less market prot...
12/22/2010                                                     Less market protection- Issues & options                   ...
12/22/2010Increase scale of production in Netherlands                            Dairy Trends- Market Year                ...
12/22/2010                                                               Food safety – Issues and options (2)             ...
Growth in global dairy                                                                                         production:...
Consumption constantlyBut wide range of growth rates . . .                                                                ...
Changing production and market                                                              How do small producers feature...
Year-to-year growth (%)                                                                                                   ...
China                                                                                                                    V...
FAO-CFC-APHCA partnership                                                                                 Elements of the ...
Current situation of dairy cattle farms in Indonesia                                                                     D...
Continue ….                                                         Expand the dairy farming to others island ofGovernment...
Dairy Board committee        The role of government in     developing the dairy value chain                           SINC...
Table 1.3 : Percentage of dairy cattle in different HF%                                                                   ...
THE ROLE OF THE   GOVERNMENT IN                                                 contentsDEVELOPING THE DAIRY              ...
2. Dairy Development Policies             1. OBJECTIVES                                                           1. Gover...
THE NUMBER OF DAIRY COWS 2001-2009                                                                                        ...
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Part ii pp_ts_competitive_dairy_value_chains

  1. 1. Competitive Dairy ValueChains in Southeast AsiaDairy Expert Roundtable MeetingDecember 8 & 9, 2010,Muak Lek, ThailandEditors:Linda HaartsenJan van der LeeBram WoutersPart II: PowerPoint Presentations
  2. 2. The Centre for Development Innovation (CDI) works on processes of innovation and change in the areas of secure and healthyfood, adaptive agriculture, sustainable markets and ecosystem governance. It is an interdisciplinary and internationally focusedunit of Wageningen University and Research Centre within the Social Sciences Group.Through facilitating innovation, brokering knowledge and supporting capacity development, our group of 60 staff help to linkWageningen UR’s expertise to the global challenges of sustainable and equitable development. CDI works to inspire new formsof learning and collaboration between citizens, governments, businesses, NGOs and the scientific community.More information: www.cdi.wur.nl Innovation & Change Ecosystem Governance Adaptive Agriculture Sustainable Markets Secure & Healthy FoodThe organization of the Dairy Expert Meeting was a joint effort. The following organizations worked together withWageningen UR to make the meeting a success:
  3. 3. Competitive Dairy Value Chains in Southeast Asia – Part IIDairy Expert Roundtable Meeting, December 8 & 9, 2010, Muak Lek, ThailandEditors:Haartsen, L.Lee van der, J.Wouters, A.P.January 2011Centre for Development Innovation, Wageningen University & Research centreThe regional Dairy Expert Roundtable Meeting on “Competitive Dairy Value Chains in Southeast Asia”provided a forum for participants from six Southeast Asian countries to discuss how dairy value chains inthis region can become more competitive and sustainable. The demand for dairy products in thesecountries is increasing steadily. Countries rely more and more on imports. Inefficiencies in the chain, lowproductivity, quality issues, as well as institutional obstacles make locally produced dairy products lesscompetitive. International developments, national policies and experiences, lessons learned, andchallenges in the value chain were presented and discussed during the meeting. Many countries in theregion face similar challenges. Solutions depend much on the local context. Better exchange ofexperiences and knowledge among the Southeast Asian countries can contribute to more efficient localdairy value chains.This document, Part II, contains the PowerPoint presentations from the workshop and is an annex to themain report of the meeting. Projects BO-10-010-104, International Centre for Cattle Husbandry, and BO-10-010-117, ‘Sustainable dairy chains’ This research project has been carried out within the Policy Supporting Research for the Ministry of Economic affairs, Agriculture & Innovation, Theme: Chains of sustainable products, cluster: International Cooperation.PhotosSarawut Chantachitpreecha, Jan van der Lee, Bram Wouters, Linda HaartsenOrders+ 31 (0) 317 486800info.cdi@wur.nl
  4. 4. Table of contentsPart II – PowerPoint presentationsGlobal trends and their implications for dairy development in South East Asia Bram Wouters, Wageningen UR Livestock ResearchDairying in Asia: opportunities and challenges Vinod Ahuja, Livestock Policy Officer, FAOThe role of the Indonesian government in developing the dairy value chain Bess Tiesnamurti and Yeni Widiawati, Indonesia Centre for Animal Research and DevelopmentThe role of government in developing the dairy value chain in Thailand Sinchai Ruengpaibul, Department of Livestock DevelopmentThe role of government in developing the dairy value chain in Vietnam Do Kim Tuyen, Department of Livestock Production, MARDSetting the scene: Experiences & lessons learnt with improvement production, input supply and services Bram Wouters, Wageningen UR Livestock ResearchDairy farming in Vietnam Luu Van Tan, Dairy development program, FrieslandCampinaSmallholder Dairy Cattle Farming and Sustainable Livelihood in Southern Tagalog, Philippines Victoria O. Espaldon, University of the Philippines Los BañosSupply chain of fresh milk on dairy cooperatives in Indonesia Yusup Munawar, The Union of Indonesian Dairy CooperativesSetting the scene: Experiences & lessons learned on collection, processing and marketing Jan van der Lee, Wageningen URMilk quality control- the Malaysian government scheme Shariffah Noorhaimi, Division of Livestock CommodityOrganization of milk collection in Indonesia Idat G. Permana, Bogor Agricultural UniversityNiche marketing in the Philippines Danilo G. Fausto, Dairy Confederation of the Philippines; Talavera Dairy Cooperative, Inc.; DVF Dairy Farm, Inc.Value chain coordination for an efficient sector Bram Wouters, Wageningen UR Livestock ResearchForemost Thailand and Dairy Scene Ronayoot Chongcharoenrat, FrieslandCampinaA healthy start with better milk Marc Spackler, NutrifeedAsian dairy: Gain or Pain? Siebren van der Zwaag, The FriesianNutreco Ruminant Innovations and Concepts Lammert Veenhuizen, NutrecoLessons learned on sustainable smallholder development in Myanmar Khin Hlaing, Myanmar Dairy Association
  5. 5. Recent development of dairy industry in Indonesia Adiarto, Universitas Gadjah Mada
  6. 6. 12/22/2010Global Trends and their Implications for Content of the presentation Dairy Development South East Asia Introduction Competitive Dairy Value Chains in South East Asia Dairy Expert Round Table Meeting Muak Lek, Thailand, December 8 & 9, 2010 Some characteristics dairy production in SE Asia Mr. Bram Wouters World wide drivers and trends and their Wageningen UR Livestock Research implications for South East Asia Conclusions Content of the presentation General characteristics in SE Asia Introduction No long tradition in milk production and dairy consumption Some characteristics dairy production in SE Asia Milk mainly produced by small holders Industrialized milk processing based for a large part on import World wide drivers and trends and their implications for South East Asia Formal and informal marketing channels Level of market protection and support of government varies Conclusions Small scale dairy farm Indonesia Medium scale dairy farm in Thailand 1
  7. 7. 12/22/2010Large scale dairy farm Malaysia Milk collection from small scale producersSome figures (IFCN, 2010) Milk prices in 2008 in US $ (source: IFCN) Milk Cons. Milk price Farmers Product. L per Farmers share of * 1000 t capita/year US $/ litre cons. priceThailand 830 20 0.47 44Indonesia 670 10 0.37 --Malaysia 60 34 0.58 30Vietnam 27 11 0.43 41Philippines 14 14 0.54 38 Content of the presentation World wide drivers for dairy development Introduction Increased demand for dairy products Population growth Income growth & urbanization changing food patterns and Some characteristics dairy production in SE Asia supermarkets National interests Food security World wide drivers & trends and their implications Import substitution or export (foreign exchange position) for South East Asia Diversification agriculture Rural development Food security and improved nutrition Conclusions Income generation & extra employment opportunities Regular income source for daily needs 2
  8. 8. 12/22/2010 Dairy trends – Policy related trends Dairy trends – Policy related trends Less market protection (WTO, FTA’s) >>more fluctuating world market prices: Less market protection (WTO, FTA’s) World market price 2009: 26 US$/ 100 kg April 2010: 43 US$/ 100 kg More emphasis on self-sufficiency in food More emphasis on self-sufficiency in food Emphasis on sustainability (climate change, energy) Emphasis on sustainability (climate change, energy) Less government support- privatization of services Less government support- privatization of servicesRate of self sufficiency in dairy products,2008 (IFCN) Dairy trends – Policy related trends Less market protection (WTO, FTA’s) More emphasis on self-sufficiency in food Emphasis on sustainability (climate change, energy) Less government support- privatization of services Sustainability of dairy value chains Dairy trends – Policy related trends People, Planet and Profit (3P): Less market protection (WTO, FTA’s) Social sustainability: People More emphasis on self-sufficiency in food Environmental (ecological)sustainability: Planet Emphasis on sustainability (climate change, energy) Economic sustainability: Profit Less government support- privatization of services 3
  9. 9. 12/22/2010 Less market protection- Issues & options Issue: Level of market protection decreases due to FTA’sWhat are the implications for South East Asia? Options: Create a more competitive local chain Lower cost price (feeding costs) Increasing scale of production (requires more land) Higher chain efficiency (transaction costs, quality) More value out of local milk: branding of “fresh” milkLess government - Issues & options Improving Sustainability- Issues and options Social issues:Issues: Inclusion of small holders into modern dairy chains Privatization of services Animal welfare: heat stress, housing Options Transition of government role from actor to Development of value chains, producers organisations facilitator, regulator and supervisor Improvement of farm management and farm designsOptions: Ecological issues: Capacity building private sector to take over Nutrient flows and recycling (waste management) Higher productivity and better use of resources (feed, soil) services Options: Define responsibilities and roles of government/ Improvement of farm management private sector Economic issues: competiveness/ profitability Development of government instruments to Options: facilitate Lower cost price and higher efficiency at farm level and in chainManure handling needs improvement Dairy Trends- Market Increase in scale of production and processing Value Chain Development More value out of milk, Vertical integration: from farm to supermarket Emphasis on food safety and standards 4
  10. 10. 12/22/2010Increase scale of production in Netherlands Dairy Trends- Market Year Netherlands Netherlands 1970 2007 Increase in scale of production and processing Farms with dairy cows 116,000 21,000 Total number of cows 1,900,000 1,400,000 Value Chain Development More value out of milk, Number of cows per farm 16 65 Vertical integration: from farm to supermarket Area of grassland + forage crops per farm 13 39 Emphasis on food safety and standards (Hectares) Value chain development – Issues and options (1) Value chain development means: Issues: Taking the market and/or development of the Distribution of added value in the chain market as starting point Lack of coordination, cooperation in the chain Cooperation and coordination among actors in Low efficiency-reduction of transaction costs the chain to increase added value and quality Input and service provision to farmers Taking sustainability as a condition for Options development Improve the organisational level of actors Adopting an integral approach when developing Develop better linkages among actors in the the chain chain Taking as starting point the development stage at Improvement of milk collection systems local level Dairy Trends- Market Total Chain Quality Management and Chain approach Consumer Increase in scale of production and processing Suppliers Authorities Value Chain Development More value out of milk, Retail Farmers Vertical integration: from farm to supermarket Emphasis on food safety and consumer Collection Dairy Distribution industry 5
  11. 11. 12/22/2010 Food safety – Issues and options (2) Issues: Improvement of raw milk quality and quality control at different stages in the chain Control of quality of raw Options: milk and dairy products Quality based payment systems Improvement of farm management and advise/services to farmers Self regulation of quality control with supervision of governmentContent of the presentation Which approach to take for development? Lessons learnt from other countries/ experiences Introduction indicate: Some characteristics dairy production in SE Asia Dairy development needs an integrated approach For example: a value chain approach World wide drivers and trends and their implications for South East Asia Possible options for development should take into account the local context Conclusions Stepwise development is more sustainableConclusion Dairy development with a value chain perspective opens Thank you for your attention opportunities to address issues in an integrated way Development of a value chain approach will lead to more cooperation, quality improvement and added value A value chain approach could lead to better inclusion of small holders in modern chains Dairy production in SE Asia will have a future BUT requires more competitive and sustainable milk production and a good enabling environment 6
  12. 12. Growth in global dairy production: Dairying in Asia: 400 1995 2007Opportunities, challenges and some lessons 350 Million tonnes 300 250 200 150 Vinod Ahuja 100 50 Livestock Policy Officer Food and Agriculture Organization of the UN 0 Regional Office for Asia and the Pacific Developed Countries Developing Bangkok Countries Consolidating its global With Asia leading the way position in milk production 800 200 Asia R of thew est orld 700 1995 600 150 2007 500 M tonnes 400 illion 36% 100 300 200 50 100 0 0 1995 2000 2005 2009 Asia LAC SSA MENA 20% Within Asia Main contributors . . .300 300 SouthA sia E A ast sia %250 250 26 SouthE Aast sia Central Asia India Pakistan China Others200 W esternA sia 200 21% 16%150 150 14%100 100 37 63% % 50 66% 50 44% 46% 0 0 1995 2000 2005 2009 1981 1991 2001 2009
  13. 13. Consumption constantlyBut wide range of growth rates . . . outpacing production Sri Lanka Mongolia 25 Nepal Asian dairy imports 20 Million tonnes Indonesia Pakistan India 15 Thailand 10PhilippinesBangladesh 5 China Vietnam 0 0 2 4 6 8 10 12 14 16 1990 1995 2000 2005 2007 CAGR (percent, 2001-09)Yet tremendous room for What about productivity?consumption growth Milk productivity across major regions 250 of the world 200 10000 Million tonnes Asia 9000 Africa 150 8000 Europe North America 100 7000 Oceania World g n a er K /a im l/y a 6000 50 5000 0 4000 3000 gl am lia h K a B iet ar C d ki d on n ya na La al N a ai a nk es n Pa pe di M sta Th re S ep V m go 2000 la M hi an N In o ad o n el 1000 ri ev D 0 1961 1971 1981 1991 2001 2007Wide variation across countries Huge opportunities for Productivity gains 3000 Thailand Quality gains 2500 Substituting imports 2000 Spreading risks, improving competitiveness g/anim ear Vietnam Protecting environment through al/y 1500 Pakistan mixed/integrated farming Nutrition, income, jobs . . . K 1000 India China 500 Sri Lanka 0 Bangladesh 1961 1971 1981 1991 2001 2009
  14. 14. Changing production and market How do small producers feature inlandscape various countries? Continuing strong positive outlook for global dairy industry India: 70 million households have dairy cattle, 52 million but increased volatility in international prices linked to smallholders (13 million to coops). Rapidly declining common resource base and growing feed China: 2 million dairy farms in 2005 with farms < 20 cows costs accounting for 65% of milk production. Increasing environmental concerns and enforcement Philippines: 13,000 families engaged in smallholder dairy with employment of 17,000. Increased consumer demand for food safety, convenience, quality Pakistan: 55 million smallholders Growing intensity and pressure to intensify and scale up Mongolia: 2 million farmers in 2006 (80% hold dairy cattle). livestock systems for higher outputs per unit of land/ Sri Lanka: 70% of 3.5 million smallholder own dairy cows. water/labour Bangladesh: 80 million households are smallholder dairy Despite rapid growth and scaling up smallholder continue to farmers. produce over 90 percent of local milk marketed in Asia Smallholder dairy critical to rural sectors Lessons learned case studies and regional strategy and investment plan forWhere do we go from here? smallholder dairy development in AsiaWhat are some of the models? BangladeshPhilippines: Dairy Development Zones (targeted development based on priority indicators). 6Pakistan: Haleeb case (private sector linkages to smallholder holders) 5 Year-to-year growth (%)India: Anand model linked to Operation Flood activities. 4Thailand/Bangladesh: strong role of cooperatives (supported by development interventions) 3Sri Lanka: an example of very limited support for dairy until recently 2China: Inner Mongolia/Heilongjiang-examples of third part milk collection stations; dairy barns, private sector investment linkages to smallholders. 1Vietnam: strong dairy development through government support (down to local levels) supported by privatization of markets 0 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08Mongolia: total cow to consumer approach; strong socio-cultural aspects, each link in dairy chain has to be sustainable and profitable; generic branding/marketing
  15. 15. Year-to-year growth (%) Year-to-year growth (%) Year-to-year growth (%) India 0 1 2 3 4 5 6 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Mongolia 00-01 Sri Lanka00-01 00-01 01-0201-02 01-02 02-0302-03 02-03 03-0403-04 03-04 04-0504-05 04-05 05-0605-06 05-06 06-0706-07 06-07 07-0807-08 07-08 Year-to-year growth (%) Year-to-year growth (%) Year-to-year growth (%) 0 1 2 3 4 5 6 -6 -4 -2 0 2 4 6 8 10 12 14 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 Pakistan Thailand00-01 00-01 00-01 Philippines01-02 01-02 01-0202-03 02-03 02-03 commercial dairy farms03-04 03-04 03-04 2001: Launch of dairy zone model 1995-2000: Experimentation with large 1995: Creation of national dairy authority04-05 04-05 04-0505-06 05-06 05-0606-07 06-07 06-0707-08 07-08 07-08
  16. 16. China Vietnam 25 30 25 20 ) ) Year-to-year growth (% Year-to-year growth (% 20 15 15 10 10 5 5 0 0 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 Some lessons from FAO studies It is important to carefully target smallholder dairy development interventions (Philippines). Same is true of pro-poor, social programmes need to be carefully targeted and are usually only sustainable if linked to remunerative markets (Bangladesh) Governments have to careful about interventions in the sector, including pricing policies (Pakistan) and dairy cow loan schemes (Bangladesh, Vietnam, Mongolia) In some cases, Governments need to be concerned about monopoly power of processors (floor pricing for milk might work in this situation) (China) What are some general lessons? Government investment in large operations usually does not work (Philippines) School milk programmes, when implemented with a focus on smallholders, can support dairy development (as well as generating long term demand for dairy products) (Thailand, Philippines)Some lessons from FAO studies Key strategic pillars Industry institutions and smallholder groups (associations, cooperative etc) can have a pivotal role in supporting dairy development (India, Philippines, Thailand) Creative and carefully thought out linkages with private sector (which Human resources includes technical assistance, financial support) can allow smallholder to and knowledge move up into a different marketing chain (Philippines, Pakistan) Productivity and management competitiveness Smallholders need an accessible and affordable complete package of support services (animal health, breeding, extension, finance, etc) to produce milk competitively (Bangladesh, India, Mongolia). Milk quality and attractive product branding/presentation are pre- Market linkages requisites for persuading modern urban consumers to switch from imports to milk produced by local smallholders (China, India, Mongolia, Philippines) Low tariff regimes facilitating importation of cheap dairy products have hampered development of local dairy industry Enabling environment
  17. 17. FAO-CFC-APHCA partnership Elements of the CFC proposal Project National • Country coverage implementation Govern- ments • Thailand, Myanmar and Bangladesh support and leadership Dairy Asia Network • Three components • Milk Production Enhancement • Milk Marketing Enhancement Milk FAO APHCA producers • Capacity Building and Information Dissemination TCP on • Duration: 4 years School CFC Project milk fundingElements of the FAO proposal on Elements of the APHCA proposal onschool milk Asia Dairy Network • Country coverage • Country coverage • Thailand, Myanmar and Bangladesh • All APHCA countries • The components • The components • Review of school milk programmes • Creation of an information and knowledge network • Design and/or strengthen school milk programmes with a targeting of • Creation of a demand driven dairying group with a membership base schools in more rural areas organizations, that included dairy firms, dairy institutions, producer organizations, school • Assess alternative and innovate funding options for financing school dairy research organizations, and other concerned regional and milk programs international partners opportunities • Link the development of these local programmes with opportunities for smallholder dairy participation • Duration: 4 years • Support the development of SMEs for manufacturing and packaging value- range of semi value-added dairy products • Duration: 2 yearsThank you
  18. 18. Current situation of dairy cattle farms in Indonesia Dairy cattle population increased by 33.79 % during the last 5 years and milk production increased by 7.7 % per year (total population of 450.000 heads). However, national milk production (4 million tonnes) Bess Tiesnamurti and Yeni Widiawati only provide approximately 30 % of total national milk demand (1,2 million tonnes) and about 70 % of the Dairy Expert Roundtable Meeting, Muak Lek, 8-9 December 2010 demand still imported (mostly from Australia and New Zealand) Indonesia Centre for Animal Research and Development, Agency for Agriculture and Development 87 % of dairy farm is smallholder farmers and 13 % is Ministry of Agriculture middle to industrial farms. Continue ….Low productivity of dairy cattle is mostly due totraditional management applied in small holderfarmers (feed availability, management at early age,mastitis sub clinical, barn hygiene and sanitation)Dairy cattle farms mostly (98.7 %) located in Java islandand 1.3 % in other island of Indonesia (North Sumatera,Bengkulu, Jambi, Lampung, Riau, West Kalimantan,Sulawesi, Bali).Milk Processing Industry (IPS) is a single market formilk produced by the farmers. Almost 80 % of nationalmilk produce is purchased by IPS. And only 20 %directly sale to the consumer, Thus the price of milk isdepend solely on the IPS as a single buyer. Continue…..Many dairy technologies on management offeeding, reproduction as well as milk processing 1. Coordination with GKSI (Indonesian Milkprocedures are available by research institutes and Cooperation Organization) and department ofuniversities. education to create milk market directly to the studentsHowever the rate of technology adoption by smallholder farmer are still very low. 2. Through P2HP (Directorate General of Agriculture Processing) built facilities for milk processing inMany local feed sources potentially for dairy cattle many milk collecting unit closed to the farmers.are still exported 3. Training and education for farmers on dairy farming management, milk processing and market.
  19. 19. Continue …. Expand the dairy farming to others island ofGovernment should issue regulation to limit Indonesia, the nature of Sumatera, Kalimantan andexport quota for local feed sources Sulawesi are very potential for this.Government should issue a regulation to supportthe using of Forestry land by farmers for feeds There are two proposed scenarios in expanding ofsupply dairy farming to other island :than Java :Government should issue regulation to create a. selecting an area then built the dairy farmingalternative market for milk, one example of market industries. Local government has important roletarget is students started from preliminary school in this scenario.to high school, or to offices and universities.Dairy rearing management program to increase thenumber of cows Continue …b. Local government has to provide some training and education regarding management of dairy farming Dairy cattle in Indonesia still has potential to be to local people. Some successful farmers in Java must developed, particularly in other island of Indonesia (Sumatera, kalimantan, and sulawesi) be transferred to other island to assist the development of the dairy farming in selected Support of National and local governments are provinces required in expanding the dairy cattle industry in the other islandsc. Government had to transfer some dairy cows to Sumatera island to support development of dairy Some important regulations must be issued by industry Central Government to protect the exodus of local feed sources
  20. 20. Dairy Board committee The role of government in developing the dairy value chain SINCHAI RUENGPAIBUL Dairy Extension Expert Department of Livestock Development THAILANDDec 2010 DLD 1 2 Dec 2010 DLD Process of Raw Milk Quality Control by Department of Livestock Development 2010 Main Focus Dairy Board GAP (DLD) GMP (DLD) GMP (FDA) Dairy Farm Milk Collection Milk Processing Center Plant - Dairy Farmers ปกติ - Cooperative 98 40C - UHT Plant 16 19,404 - Dairy Cows - Private 65 - Pasteurized Plant 533,552 68 - Milking Cows 230,676 - milk prod. 2,560 Milk Grading Ton/d ABCD Price adjustment to milk quality Penalty - School milk 1,211 ( Raw milk price 17.00 baht/kg - Adding water 20 times Ton/d at - Finding Antibiotic 60 times factory gate ) -Bacteria Penalty - SCC Lab : Freezing point > -0.520 0C - Fat : White blood cells > 500,000 - Protein cell / cc. : Bacteria >500,000 - Total Solid col / cc. : TS < 12 % Regional Livestock OfficeDec 2010 DLD 3 Dec 2010 DLD 4 Table 1.1: Dairy cattle population from Table 1.2 : The distribution of dairy farms and dairy 2008 - 2009 cattle in different regions (2009) % No. of % No. of dairy Year No. of dairy cattle (heads) Region farms cattle Calves Heifers Cows Total Central 68.62 68.80 North 2008 122,274 94,422 273,059 489,755 Eastern 20.87 20.93 2009 115,113 99,833 278,605 493,551 Northern 9.51 9.56 Southern 1.00 0.71 Total 100 100Dec 2010 DLD 5 Dec 2010 DLD 6
  21. 21. Table 1.3 : Percentage of dairy cattle in different HF% Table 1.4 : Total milk production from per year and per day from 2007 - 2009 Friesian (HF) % Dairy population (%) 62.5 % HF 4.7 75 % HF 26.7 Year Milk Production Milk Production 87.5 % HF 46.2 per year (Tons) per day (Tons) 93.75 % HF 20.2 100 % HF 1.0 2007 750,778 2,056.92 Other breeds 1.2 2008 775,866 2,125.66 Total 100.0 2009 889,043 2,435.73Dec 2010 DLD 7 Dec 2010 DLD 8 Imported milk products 2008 Milk market value in Thailand 2008 ( 602.2 mil.USD ) Milk market value 850 mil. USD UHT (333.3 mil.USD) Pasturize (116.7 mil.USD) Culture Yogurt (266.7 mil.USD) Soft Yogurt (83.3 mil.USD) Drinking Yogurt (50.0 mil.USD) 6% 10% 39% 31% 14%Dec 2010 DLD 9 Dec 2010 DLD 10 Export milk products 2008 (182 mil.USD) Export milk products by country Thank you Malaysia Singapore Cambodia Indonesia Laos Other 19% 27% 17% 10% 12% 15%Dec 2010 DLD Dec 2010 DLD 11 12
  22. 22. THE ROLE OF THE GOVERNMENT IN contentsDEVELOPING THE DAIRY I. IntroductionVALUE CHAIN IN VIETNAM II. The role of the government in the development of the dairy value Dr. Do Kim Tuyen chain Department of Livestock Production - MARD -THAILAND- DEC. 2010 III. Conclusion BECAUSE I. INTRODUCTION Vietnam had a big change in agricultural development; from a food deficit nation to an agricultural export country.Why, in 2001, the Vietnamese Government Nevertheless, every year Vietnam imported abouttook up Decision number 167/2001/QD- 90% of powder milk and dairy products for localTTg on “The Policies and Measures for consumption.Dairy Production Development Program of Total value of imported dairy products was 2.5Vietnam from 2001 to 2010 ” million USD in 1990, increasing to 50 million USD in 2000. Importing dairy products means that Vietnam imported agricultural labor, meanwhile Vietnamese farmers were looking for ways to improve their economic situation. BECAUSE II. The role of government forDevelopment of dairy farming was the development of dairy value chaininstrument of the Vietnamese Government for (Theo Q§ 167/2001/Q§-TTg) Q§ 167/2001/Q§changing the economic structure in agricultureand rural development, and increase theincome and living standard for farmers. In 2001, Government of Vietnam issued the Decision No. 167/2001/QD-TTgTo meet the high demand of milk and dairy dated 26/10/2001 on “The policies andproducts for local consumption, and, step bystep, reduce the import of dairy products. measures for dairy production development program of Vietnam from 2001 to 2010 ” 1
  23. 23. 2. Dairy Development Policies 1. OBJECTIVES 1. Government encouraging all organizations, a. General Objective individuals of Vietnamese and foreignDevelopment of dairy production to: companies to invest in dairy farming and- meet the local demand of milk consumption; dairy breeding, to meet the local demand for dairy development and dairy consumption- reduce, step by step, the import of milk and dairy products;- create new jobs; 2. Provincial authorities have a land use planning for dairy farm construction,- increase the income for farmers and improve the upgrading of local cattle breed, dairy cross living standard in rural areas breeding, production of grasses and milk collection points. …General Dairy Development Policies … Milk Collection Policies3. Priority for dairy farming; from the small scalefarms to the medium and big farms. 1. Dairy processing construction and planning must be based on:4. The state dairy companies and the othercompanies have the responsibility for dairy technical Dairy development and milk production regionservices, breeding, technical equipments supply, Convenience to dairy farmer for fresh milk deliveryveterinary services, milk collection and dairy Signing the milk collection and delivery contract withprocessing. dairy farmers. 2. Ministry of Industry and Commercial has an annual5. Establish the dairy cooperatives, to support dairy plan of dairy products utilization, for balancing thefarmers in milk production, collection, and fresh milk local milk production and the import of dairy productspricing; and establish the dairy association for dairy in order to support local dairy development.farmers and dairy processors. … Credit and Loan policies ...Credit and Loan policies Support loans with a low interest rate, forThe investment credit: including a central purchasing dairy cows, to farmers whose got thebudget and local budgets for: bank contracted in the first three years of the dairyImproving the local yellow cattle breed, by development program.crossing with Zebu bulls Support free vaccinations for epidemic diseases inSupplying semen, liquid nitrogen, and AI kits for dairy cattle.free, as part of the dairy cow cross-breedingprogram Loan for the construction of a milk collectingSubsidizing the new born male dairy calves (10 system and dairy processing plan, according to theUSD for each calf) during the first three years of support development fund policy by governmentthe dairy development project Minute No. 43/1999/N§-CP. 2
  24. 24. THE NUMBER OF DAIRY COWS 2001-2009 2001- 3. THE MAIN ACHIEVEMENT SN0 YEAR Dairy cow (1000 h) Increase Rate (%) 1 2001 41,241 17,89 The number of dairy cows and the 2 2002 55,848 35,43 milk production has increased fast 3 2003 79,225 41,84 during the last 10 years 4 2004 95,794 20,92 5 2005 104,120 8,70 6 2006 113,215 8,73 7 2007 98,659 -12,86 8 2008 107,983 9,45 9 2009 115,518 6,98 TOTAL COW & MILK PRODUCTION 2001-2009 2001- III. ConclusionSN.0 Milk YEA Dairy cow Increase Rate Increase Rate 1. The dairy production development program (1000 R (1000 ) (%) (%) of the Vietnamese Government, from 2001- tons) 1 2001 41,241 17,89 64,703 25,73 2010, has been a success and it meets the 2 2002 55,848 35,43 78,453 21,25 local demand of dairy products. 3 2003 79,225 41,84 126,697 61,49 4 2004 95,794 20,92 151,314 19,43 2. All provinces are encouraged to establish 5 2005 104,120 8,70 197,679 30,65 their own dairy development program, create 6 2006 113,215 8,73 215,953 9,24 jobs, and increase the income and improve the 7 2007 98,659 -12,86 234,438 8,56 living standard of dairy farmers in the country. 8 2008 107,983 9,45 262,160 11,82 9 2009 114,461 6,00 278,190 6,11 …CONCLUSION 3. Dairy production policies had an important role in changing the economic structure in Agriculture and Rural development. 4. The national target of 150,000 dairy cows and 330,000 tons of fresh milk production for 2010 is achieved. 5. We need the international cooperation and support to reach the targets of the dairy development plan of Vietnam in 2020 (470,000 dairy cows and 1 million tons of milk) 3

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