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A look at the dairy dilemma

Wednesday, October 10, 2007

Many things have been said over the past 10 years about the potential of the dairy industry to make a greater impact on our economy.

This is true when we compare our annual total consumption against what we are producing from our own herds. It is open argument whether we are even yielding 10 per cent of our own fresh milk needs.

Strength and opportunity

The thrust of this opinion is to inform ourselves that the current strength and opportunities in the industry far outweigh the weakness and threats.

In the area serviced by the Waidalice Chilling Centre, about 40 small dairy farms are scattered in the districts of Verata, Sawakasa and Wainibuka.

They all have an assured market in the Rewa Co-operative Dairy Ltd.

There are daily pick-up services provided by the company and food advances, technical advice and artificial insemination are provided if required.

Rewa Dairy keeps all the production statistics and its management has pledged to help if help is asked.

The farmers formed the co-op to increase their opportunities for investment as well as attract financial assistance to expand and lift production.

New funds will catalyse further utility of land resources while resolving electric power and water supply constraints.

Acting together as a body can remove the shock of disrupting operations through the expiry of land terms. There is also far greater scope of improving the income level, up-skilling, training and sharing facilities and expertise while increasing stock and production.

Weakness and threat

Farmers recognise that their milk yield is low.

There is inadequate fencing, serious weed control and some drainage problems, all leading to low stock rates.

Lack of hygienic water supply and electricity cannot be taken lightly.

There are some obvious threats such as low milk prices in the future or loss of the present market in the current deregulation climate.

Loss of daily milk pick-up runs, presently provided free, will lead to production levels falling.

There is increasing loss of land-leasing rights and the occasional loss of the dairy license.

In the sanitation area, the lack of overnight chilling facilities and a disturbing, unhealthy dairy environment can hold back the hardest working dairy farmer.

Inadequate water supply and unmanageable weed control are dominant nightmares in a stockman's life.

Facts and figures

Only 12 farmers in the entire dairy area were surveyed to throw light on the activities of the small dairy farms that rely on the services discussed above.

The reality on the ground is often ignored in large development plans which prefer to base plans on assumptions and do not listen to the farmer who knows what his development priorities are.

Here are the survey details:

Land, The total area covered by the 12 farms is 666 hectares. The average farm size is 55.5ha. The smallest is 30ha and the largest is 80ha.

Cows, The number of cows milked by the 12 farmers total 200. The average number per farm is 17 cows. The smallest has only two cows while the largest has 38.

Milk sales, The 12 farms sell 1244 liters each day. The average milk sold by each farm is 104 liters. The smallest producer sells 35 liters and the largest 300 liters.

Income, At 44 cents a liter, the 12 farms fetch over $500 a day and the variation in income from farm to farm is significant.

The survey also allows the co-op to calculate what each cow got for the farmers every day.

Financial assistance

Improving the 12 dairy farms surveyed would require an injection of funds to treble the herd from 200 to 600 and improve stocking rates from four to one hectare per cow.

The limiting factors are inter-related but the main concern is the low production per unit of pasture area caused by weeds, wet fields and bad sub-divisional fencing.

Forests need to be developed, water supply and electricity provided plus improvements to roads to make the work more pleasant.

These improvements can lift milk output to 1000 liters a day per farm and this can push the daily income to $500 per farm.

The ultimate goal is to enhance our national fresh milk self sufficiency and reduce loss of foreign exchange through milk powder importations.

Some figures suggest that such imports amount to about $300,000 every quarter.

Revolving funds

A similar amount of money, if used as an annual revolving fund by Rewa Dairy to assist small operators in Tailevu, can do a lot for small farmers where the greatest potential for increasing the national milk output exists.

Most big dairy farms have reached their maximum output so the small farms have the greatest potential.

National outlook

Strategic planning is vital and must be done if we really need to achieve a significant increase.

We have done enough talking and now must get down to doing some real work backed by proper funding.

First, we need to look at where land is available.

The table below shows where we should look:

The Northern, Central and Western division provinces can easily provide 100,000 hectares for dairying and this can be done without going into steep terrain or interfering with land which is already used profitably for other enterprises.

35 million liters

Another 100,000 hectares of properly developed dairy farms, on the basis of the survey findings, can bring Fiji another 35 million liters of fresh milk a year, giving farmers $17.5million a year at present prices.

Joint venture

Joint ventures with landowners is the only sustainable way of developing our dairy industry. A lot of groundwork is required but if we act now the result can be seen in 30 months' time. And we do not worry about expiry leases.

The author is the founding chairman of the board of the Waidalice Chilling Centre and Milk Producers Investment Co-op Limited in Tailevu.

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