The dairy sector in Bangladesh is very important for poverty reduction, food & nutrition improvement and women’s empowerment (Shahabuddin et al., 2011). It creates sources of income for farmers, especially unemployed youth and women. The share of livestock in agricultural GDP is about 13.46 per cent and it has created 20 per cent employment. The rapid population growth, urbanisation, economic growth and the associated increase in demand for animal products have presented golden opportunities for expansion of the livestock industry in our country.
According to Bangladesh Dairy farmers Association (BDFA, 2019), there are about 1,200,000 dairy farms in the country and 9,400,000 people are directly or indirectly involved in the dairy industry. Currently the estimated investment in the local dairy sector is around Tk90,000 crore. The demand for milk and milk products is increasing because of the rapid increase in population, higher income and growing nutrition awareness. The country's milk production has increased at least five-fold over the past 20 years. Although the production has increased but still there is a gap between the demand and supply (Table-1). According to DLS (2020), Bangladesh produced 10.68 million tons of milk in 2019/2020 which is now meeting two-thirds of the total demand. The availability of milk has increased significantly from 37.5 ml in 2001/02 to 175.6 ml per person per day against the requirement of 250 ml.Table-1: Demand and Production
Source: DLS, 2020
2. Key challenges of dairy development:
There are multiple factors which are related to sustainable dairy development in this country. The key challenges are:
a) Lower milk production efficiency of local breed: There are about 24.4 million cattle in our country and most of them (60-65 per cent) are local breeds. The yield of local cattle is only about 1-2 litre milk per day 200-250 litres per year, however, the production of cross breed varies, and it is about 7-8 litre per day (1500 – 1800 litre per year). In New Zealand, the number of dairy cattle is lower than in Bangladesh (about 4.94 million) but it produces about 21.2 billion litres of milk and it is the 8th largest milk producing country.b) Low coverage of Artificial Insemination services: It is estimated that the current coverage under artificial insemination (AI) is about 65-70 per cent in our country and the major players are government, Milk Vita and 5 private sectors (BRAC, ACI, ADL, Lal Teer, Ejab).
c) High cost of feeds and shortage of fodder: Three categories of cattle feeding systems are practiced, grazing mode to a semi- or complete intensive mode depending on the size of the herd. About 600,000 MT of industrial processed cattle feed is produced by the 25 feed mills in our county and these are mainly used by the medium and large-scale farmers in our country. However, the price of concentrate feed is comparatively high compared to development countries. Farmers who grow fodder all year long generally can have six crop cycles, with an annual production of 2000-2300kg per acre. The trend of fodder production is expected to expand but compared to rice and maize, fodder production is less profitable in some areas.
d) Lack of improved feeding practices: While many farmers in the primary milk production zones know the best methods of feeding – using concentrates, enriched straw and green roughage, however, many farmers still do not use good practices.
e) Infertility and calf mortality: Due to lack of proper feeding and management, the problem of fertility has been increasing especially in improved breeding. According to Parvez et al., (2020), the calf mortality rate is high in our country (12.28 per cent), which is very alarming in the growth of dairy industry
f) Unsecured market for selling of milk and price fluctuation: Over 90 per cent milk is sold through traditional channels and only 7 per cent milk is purchased by fifteen major companies who produce packaged milk and other dairy products in Bangladesh using modern, industrial manufacturing. Large commercial dairy farms collect about 653,000-litre milk per day from producers. Actually, most of the producers are selling their milk in traditional channels and the price widely varies from 30 to 70 BDT per litre, due to many factors. In remote areas, the price may fall to 30 to 35 BDT per litre due to limited market access (Dairy and beef value chain in Bangladesh, 2019).
g) Lower price of imported powder milk: Since there is a gap between demand and production (table 1), thus many imported milk powder entered the domestic market to fill this gap. The price of imported powder milk is sometimes cheaper than local ones which affect the dairy development in our country. Powder milk imports have grown at a faster rate than local fresh milk production, over the same period. In 2018, the estimated imported powder milk was about 140,000 MT, which is about 11 per cent of that year’s production of fresh milk.
h) Mismatch between growth in milk production and market demand: The industrial dairy sector grew at a 3 per cent compound annual growth rate (CAGR) compared to increased market growth of 5-7 per cent.
i) Impact of seasonality on products and markets: The seasonality of milk production also impacts end-markets and the types of products which are available. The highest milk production observed in the winter months from November -December to April-May, with medium production in the hot summer months from May-June to July-August, and lowest production during the monsoon in August-September.
j) Cattle diseases affect production: Due to lack of preventive measures and capacity in identifying diseases, dairy farmers suffer great loss in production. According to the Ministry of Fisheries and Livestock, annual loss due to only FMD has been estimated at BDT 1000 crore (US$ 125 million) (Guidelines on Animal Vaccines.
Retrieved from: https://dgda.gov.bd/images/Draft_Animal_Vaccine_Guidelines.pdf
k) Effect of Covid-19: The recent Covid-19 pandemic situation has created an undesirable impact and uncertainty in the dairy sector at the beginning of the outbreak. It has seriously affected the entire value chain resulting in huge loss in this sector. Therefore, the farmers, private sectors, service providers, government and other stakeholders are adopting appropriate coping mechanisms to overcome the situation in terms of supply of inputs and sale of final products.
3. Key considerations for sustainable dairy development:
With the current deficit of about 5.0 million metric tons and additional requirement of 6.0 million tons in 2030, Bangladesh needs to produce 11.0 million metric tons of milk. Therefore, there is a requirement to produce more milk through increased milk production per animal within the next 10 years.
a) Breed development: It is important to increase the number of cross breeds to increase production of milk in our country. As only about 35-40 per cent of the cattle in our country are crossbreed, a high potential exists for milk production to continue increasing until the national demand for milk is satisfied (DLS, 2020). It focuses on increasing productivity per cow but not the number of cows.
b) Increase the coverage under artificial insemination (AI): The current coverage under artificial insemination (AI) is about 65-70 per cent in our country. With a significant penetration of AI services, the percentage of crossbreed animals needs to be increased to improve the production reaching nearly 90 per cent within the next five years. AI has achieved great success in our country. The demand for fertile embryo is expected to be increased within next 3- 5 year
c) Prevention and control of diseases: Some major diseases such as FMD, Mastitis, Lumpy Skin Disease, etc. must be controlled to keep the expected production. Treatment for FMD and Lumpy Skin Disease are available in our country and should be accessible to farmers. The government and private sectors should create awareness among the farmers through awareness campaigns to encourage them for vaccination along with other good management practices.
d) Increase technical knowhow and provide extension services: The government and private sector should work together and provide training, technical services to improve farmer’s knowledge and skill.
e) Access to finance: According to the Bangladesh Bank BDT 30.57 billion was disbursed to livestock sub-sector in 2018. Apart from bank loans, MFIs, cooperative funds and private financing are the most common choices for value chain actors, particularly for small-scale producers. This process should continue.
f) Formation of producer cooperatives: Farmers group or cooperative should be formed by the government, private sector and NGOs. Farmers generally have limited bargaining power, so that if they form a group, they can bargain the price which is set by the buyers.
g) Enabling environment: Policies, Regulations and Laws: The national livestock policy (NLDP) encouraged the participation of the private sector in livestock development, while shifting the role of the public sector to a facilitator and enabler. Government approved about USD 93 million (Over 700 crore) to support 620,000 small and medium poultry, dairy and other livestock farmers. This will help small and medium dairy farmers to sustain in Covid-19 situation. Government should continue to provide incentive, minimising VAT, AT, AIT from inputs and outputs of dairy production.
h) Impose reasonable tariff/tax on imported powder milk to protect dairy farmers: It would be a safeguard for dairy farmers. However, the farmers have to increase production efficiency to reduce costs of milk production to sustain in this competitive market.
i) Improve feeding practices: The farmers who do not use improved feeding practices for their cross breed cow must be encouraged to use best methods of feeding – using concentrates, enriched straw and green roughage.
j) Food safety and quality production: It is always one of the core criteria when consumers purchase certain products. During production, processing, and storage, products are subjected to contamination by pathogenic bacteria and producers should consider these points.
k) Improve cattle health: While in some area’s farmers vaccinate their cattle for the primary diseases and use deworming tablets, but in other areas they do not give priority to this issue which needs to be further focused.
l) Animal Health Laboratories: DLS has set up an Animal Health Central Disease Investigation Lab with nine field investigation labs as well as 63 District Veterinary Hospitals equipped with mini-laboratories. The farmers must be encouraged to use these laboratory facilities whenever they face any problems. (http://www.fao.org/docs/eims/upload/299827/an356e00.pdf 43 Guideline on Animal Vaccine (2018).
m) Create a network of stakeholders: For sustainable dairy development, a strong network for sustainable dairy development should be created in our country with all stakeholders - Government, NGOs, policy maker, processors, traders, farmers, etc.
The Bangladesh government has a strong focus on the development of the dairy sector to achieve self-sufficiency by increasing milk production with acceptable quality. It focuses on increasing productivity per cow but not the number of cows.
The government needs authentic information and cooperation from all stakeholders. They should have specific roles for each agency to contribute to the dairy sector development at different levels.
The farmers have a responsibility to increase efficiency, reduce costs of milk production and take the necessary steps to avoid adulteration of milk.
The processors must play a role in not only collecting the milk but also paying a fair price.
Finally, the end user, the consumer satisfaction about the quality of milk is vital.
The academician and researchers should also develop strategies and guide the government and private sectors to take the necessary steps for sustainable dairy development in this country.
The writer is Chief Technical Advisor, ACI Animal Health