June 26, 2012

 

Thailand's dairy farmers urge government for competitive industry measures

 

 

In anticipation of the Asean Economic Community (AE) formation in 2015, Thai dairy producers are urging the government to take measures to make their industry more competitive, the Bangkok Post reports.

 

Vorathep Rangchaikul, the managing director of Dairy Plus Co, a UHT milk production subsidiary of the Dutch Mill Group, said the government should issue a national policy to solve the imbalance of raw milk supply and demand, inconsistent raw milk quality and high production cost for dairy farmers.

 

Dutch Mill joined seven public and private organisations at the Milk Forum to discuss the industry's future.

 

"The government should support farmers by educating them about the farm environment and hygiene as well as suitable food to produce happy cows," said Vorathep.

 

He said enhancing cow health will lead to a sustainable supply of high-quality raw milk. The yield of raw milk per cow per day will rise to as high as 15 kilogrammes, on a par with global standards.

 

In Thailand, cows typically produce only 10 kilogrammes per day on average, making costs of the dairy industry very high compared with other countries. Apart from raw milk yield, the government should strictly control microorganism contamination in raw milk.

 

The level of microorganism contamination in raw milk in Thailand is 500,000 colonies per cubic centimetre, compared with 300,000 in New Zealand and 100,000 in the EU and the US.

 

Visit Limprana, chairman of the Federation of Thai Industries' food processing group, told the forum the AEC and free trade agreements with other countries, especially China, will cause some threats to the local dairy industry. An influx of high-quality, cheaper milk from countries such as Vietnam and China into Thailand can be expected.

 

"Without awareness and immediate improvement, the Thai dairy industry will be at peril and some farms may go out of business," he said.

 

Even though Thailand can produce up to one million tonnes of raw milk annually, the milk per capita consumption here is only 13 litres per year compared with 60 litres in Asean. The cost of raw milk is about THB18 (US$0.57) per kilogramme, resulting in high dairy product prices and limiting consumption.

 

The THB40-billion (US$1.3 billion) Thai dairy industry excludes the School Milk project. Of the total, about THB12 billion (US$377 million) goes to the UHT milk segment, THB8 billion (US$251 million) for cultured yoghurt, THB7 billion (US$220 million) for drinking yoghurt and THB6 billion (US$189 million) for pasteurised milk.

 

UHT milk is slated to grow by 6% this year, pasteurised milk 8% and drinking yoghurt 23%, but cultured yoghurt will be flat.