Dairy industry seeks govt support to improve standards | Sunday Observer

Dairy industry seeks govt support to improve standards

Nishantha Jayasooriya
Nishantha Jayasooriya

The dairy industry is working towards a common goal of elevating industry standards and solicit stronger government support to push the dairy sector to reach self-sufficiency.

“We are seeking government support to promote the local dairy industry and have taken a collective effort to voice our concerns to make the industry a vibrant sector in the economy. We need a focused and strategised action plan to take the industry to the next level, President All Island Dairy Association, Nishantha Jayasooriya said.

The lack of a holistic national policy covering the entire industry value chain is a huge challenge for the sector to move forward.

As the regulator is fragmented in decision making, it has been difficult to reach consensus towards achieving fruitful results making the industry an economic driver in terms of generating employment and value creation, he said.

“Most of the dairy farmers are engaged in the industry as a secondary activity and not as a core business nor is it given focused attention. This has resulted in allocating less resources and effort to develop the industry as a prime economic activity. We also need to infuse new technology in going forward to increase the production...

...capacity and to upgrade the collection process with modern storing facilities to ensure quality and standard of the end product,” he said.

“A framework with an overall approach to uplift the industry status with a view to reach self-sufficiency in a specified timeline is necessary at present. For this the regulator should take the responsibility of drawing a strategic plan with the stakeholders in creating a level playing field to fuel the growth of the sector and harness the full potential to scale up the milk production. There need to be a collective effort to upscale the supply side through a push from the demand side. It is important to look in to the need for quality animal feed as it plays a key role in milk production,” he said.

The local dairy sector adds about 1.2% to GDP and has increased supply from 196mn litres in 2010 to 327mn litres in 2017, yet still meets only 40% of Sri Lanka’s growing demand, revealing a productivity and supply gap. In addition, 75% of milk comes from smallholder farmers who encounter challenges, leading to inconsistent quality standards in milk collected.

Imported milk powder prices are controlled despite a 15 per cent VAT being introduced in 2016 and the increase of other input costs; to ensure future sustainability of the industry, a price formula is recommended to replace price control.

As 75% of the milk comes from smallholder farmers, deriving the benefit from new technology has been a challenge. We see a lot of enthusiasm among farmers to increase local milk production as fresh milk is profitable for dairy farms. The industry has identified a gap in the quality of milk due to the lack of access to the right equipment, knowledge on proper dairy practices and proper chilling facilities to maintain a consistent quality standard. Because of this, much of the yield is rejected and wasted, Jayasooriya said. The local dairy sector has increased its supply from 196 million litres in 2010 to 327 million litres in 2017, yet still meets only 40% of Sri Lanka’s growing dairy consumption, revealing a clear gap in supply and demand.

“The dairy sector adds only about 1.2% to Sri Lanka’s GDP. This is because dairy farming is now commonly considered as a second income earner. We need to change our attitude towards dairy farmers; they are not only farmers, they are entrepreneurs and need proper guidance and support to meet quality and local demand,” he said.