Local milk industry: A revolution in white

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The country's milk production has increased at least threefold over the past nine years, now meeting two-thirds of the total demand. 

Currently, the total demand for milk is 152.02 lakh tons annually, according to the Department of Livestock Services (DLS).

Spread of information technology, employment generating scope for young people and expatriates' investment are said to have propelled the skyrocketing growth in the sector. 

In 2009-10 fiscal, the annual milk production was only 23.70 lakh tons, which jumped to 99.23 lakh tons in last fiscal (FY2018-19), registering a 319% rise, say DLS data. 

In the intervening years, the average year-on-year growth was 17.9%, with the highest 46.53% in 2012-13 and the lowest 1.27% in 2017-18 fiscal. In FY 20178-19, it was 5.55%.

Last year, the country produced 99.23 lakh ton, which was 65.27% of the total demand. 

“Though it is late, the dairy sector has finally witnessed a revolutionary rise in the last couple of years,” says Shah Emran, general secretary of Bangladesh Dairy Farmers’ Association (BDFA).

He believes that development of information technology, engaging young people and expatriates’ investment have driven the growth of the sector.

However, average availability per head is only 165.07ml in a day, as per the DLS data, which should be at least 250 ml daily.

“Milk production has increased rapidly in the last few years, but we need further expansion,” DLS Director Mahbubur Rahman states.

Rahman informs that the government has recently launched a project named ‘Livestock and Dairy Development Project’ for boosting the sector.

Data from the leading organization of dairy farmers, BDFA, say that now there are 1,200,000 dairy farms in the country and 9,400,000 people are directly or indirectly involved in the industry.

The estimated investment in the local dairy sector now is around Tk90,000 crore, according to BDFA.

Shah Emran says the sector needs more investment, especially in powdered milk making infrastructure, for uplifting the dairy industry. 

“We have a good number of processors, who only pasteurize milk but there is a lack of powder-making companies,” he mentions.

A powder making plant may cost Tk700-800crore, he says, adding that majority of the milk powder brands available in the markets are imported.   

The BFDA urges government and private sector to invest here as there is a huge demand for milk-powder. 

Market share

Currently, around 10% of the total milk production goes to brands like Milk Vita, Pran, Aarong and Farm Fresh, says DLS Director Mahbubur Rahman, adding that owning companies of the brands produce pasteurized milk and dairy products.

The dairy farmers have to sell the rest 90% in local market immediately, which is why they do not get fair price, Rahman points out.

He says that the raw milk goes bad within a very short time. “We need more processing and powder making infrastructure,” he demands.

Currently, 14 companies, registered under Bangladesh Standards and Testing Institution (BSTI), produce and supply pasteurized, milk and dairy products to markets. 

They are Aftab Milk and Milk Producer Ltd (Aftab Milk), Akij Food and Beverage Ltd (Farm Fresh Milk), American Dairy Limited (MOO), Bangladesh Milk Producers’ Cooperative Limited (Milk Vita), Baro Awlia Dairy Milk and Foods Ltd (Dairy Fresh), BRAC Dairy and Food Project (Aarong Dairy), Danish Dairy Farm Ltd (Ayran) Ichhamoti Dairy and Food Products (PURA), Igloo Dairy Limited (Igloo), Pran Dairy Ltd (Pran Milk), Uttar Bango Dairy (Ultra), Purbo Bangla Dairy Food Industries (Arwa), and Tania Dairy and Food Products (Safe).

During recent visits to the different capital markets, Milk Vita, Aarong and Pran were found dominating the pasteurized milk market with 80% share, leaving the rest 20% to other companies.

Besides, nine companies including New Zeeland Dairy (Diploma), Arla Food (Dano), Meghna Group (Fresh), Nestle Bangladesh (Nido), Partex Group (Danish), Abul Khair Group (Marks), Pran Dairy, Brac Dairy (Aarong) and Milk Vita are supplying milk powder to the markets.

Of the local brands, only Milk Vita and Aarong have their own plants for producing milk powder, while other brands do only packaging with imported bulk milk powder.

Dano, Nido and Marks were found dominating the milk powder market. 

Prices

Farmers locally sell raw milk at varying prices based on the areas they are in. In Dhaka and nearby areas, price of one liter of milk is about Tk70-80. 

In village and rural area the prices may vary between Tk40 and Tk70. 

After processing, most of the companies sell a liter of pasteurized milk at TK60-70 and UHT (ultra-heat-treatment) milk at 95-100 per liter.

Besides, dairy products including ghee, butter, ice-cream, cream, rasmalai are sold at various prices up to Tk1,000.

Milk powder price varies depending on different brands. Average price of a kg of milk powder is Tk550 to Tk570. 

Farmers struggle

Despite such achievements, dairy farmers are struggling as they are not getting fair price of milk. 

“We have to sell our milk at low price in most places. Sometime, we cannot even realize our production costs,” says BFDA General Secretary Emran.

Mentioning this, he claims that availability of low-priced imported milk powder in market is the main reason behind their woes.

Besides, lack of sufficient milk-processing infrastructure in the country is another reason, he mentions, saying that the processing companies are buying only 7% of the total production.

“As a result, a substantial amount of produced milk goes to the waste every day as they cannot sell such a huge amount of unprocessed milk,” he says.

In need of government support

“For development of the dairy sector, we need a broad planning and its immediate implementation by the government,” demands BFDA General Secretary Emran.

In this connection, the government should discuss with dairy farmers, traders, collectors, processors, government bodies and NGOs concerned, he suggests. 

The government must set milk price, especially for the processor companies like Milk Vita, Aarong and Farm Fresh etc, he states. 

Besides, milk processing and powder-producing capacity of Milk Vita should be increased to a great extent, the farmer’s leader says, adding that the government should set up milk processing plants in every division and collection points in every upzila.   

In addition, Emran urges private sector people to come forward to invest in milk powder and dairy products producing business. 

For local industry welfare, he thinks the government should control milk powder imports by increasing customs duty to 50% from the existing 10%.

Dairy farmers also demand for cutting unit price of electricity they use in farm, ensuring adequate veterinary doctors, leasing abandoned field to the farmers for producing grass, giving subsidy in agro-feed, taking effective marketing policy and ensuring easy-term loan for farming.

Recently launched government project

The government has taken "Livestock and Dairy Development Project". 

The Tk4,280crore project was launched early this year and is expected to achieve its goal by 2023. The World Bank is providing 85% of the total cost.

Mentioning this as the highest-ever investment in a single agriculture sector project, Deputy Project Director Mohammad Shakif-Ul-Azam hopes the project will bring revolutionary change in the sector.

"Under the project, farmers will be brought under small associations at every upzila, where there will be a hub for collecting and processing milk for a temporary time," he says. 

From the small hub, the processed milk will go to large plants owned by government and private companies.

With the planning the projects aims to ensure fair price for the farmers and turn them into entrepreneurs.
Source: https://www.dhakatribune.com

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