August 5, 2016


A new day for Philippine dairy





The new Philippine agriculture secretary, Manny Piñol, hasn't even warmed his seat and he already thinks of doing something drastic about the pathetic state of the country's dairy industry.


The secretary took office only in July as part of the new administration under populist President Rodrigo Duterte. And he laments that despite the millions of dollars in US aid, local dairy production continues to contribute less than 1% of the annual national requirement of about 2 million tonnes.


Saying government crooks and goat merchants had been pocketing a big chunk of this US aid, he has ordered an inventory of goats brought into the country as part of that US programme.


Under the programme, the Philippines got millions of US dollars to buy US goats to beef up the country's local dairy breeds. However, instead of buying pedigreed goats, which could have improved the genetics of local goats, they brought in old goats discarded by American dairy farmers, Piñol claims.


The secretary promises to run after these crooks and the goat merchants they had been dealing with. A goat farmer himself, Piñol knows whereof he speaks.  "Their problem is that I am a goat raiser and I know what a good dairy goat is. In fact, I could identify the breed of a dairy goat by just looking at its features. Not only that, I know most of the outstanding dairy goat breeders in the US and I know that many of the goats brought to the country did not come from them or are discards from small dairy farms," he says.


The goat merchants, he adds, have been doing this for many years now and have been raking in money to the disadvantage of both the US taxpayers who are spending for the programme and the Filipino farmers who are supposed to benefit from it."


According to the Philippine Statistics Authority, the country has more than 41,700 dairy animals, with dairy goats accounting for 4.75%, as of last year. Cows dominate the dairy population at 53.85% followed by dairy carabaos (water buffaloes) at 41.40%.


Milk production is around 20 million litres a year, with about 64% of it constituting cow's milk. Buffalo milk comes in second at 35%, with goat milk a poor third at less than 2%.


New Zealand biggest supplier


The Philippines imports most of its dairy requirements from New Zealand, which supplies 30% of the requirement. The US and Australia are also major sources, supplying 24% and 7%, respectively.


The country is the fourth-largest market for US dairy products. In 2015, imports of US dairy products reached US$422 million.


Of course, running after crooked merchants isn't going to make any visible change in the local dairy landscape.  What the industry urgently needs, according to National Dairy Authority (NDA) officials, is more investments, especially in the production segment in the industry's value chain.


Increased production would consequently spur growth in the processing and marketing segments of the chain, NDA officials say.


To increase production, more breeding dairy animals have to be imported to improve local stock. More multiplier farms should also be established to increase the breeding stock.


The local dairy industry produces fresh milk, flavoured milk, native cheese, processed cheese, candies, ice cream and yogurt.


But can the Philippines have its own flourishing dairy industry? The common perception is that it can't for various reasons. A dairy animal scientist, however, disputes this, saying he, in fact, believes the country is perfect for a dairy farm.


"We always have rainfall, so we can grow grass anywhere for pasture throughout the year," he says, adding that the Philippines could one day have the best dairy in Asia.


First of its kind farm


Neil Molina, who holds a master's degree in animal science from Australia and was a dairy technical specialist in Oman for 15 years, says that aside from an auspicious climate, two other things make it an ideal dairy farm location—numerous vacant areas and its many dairy technical experts.


Together with the National Dairy Authority (NDA), Molina has put up a dairy breeder farm in Calauan, Laguna. About 50 animals are already in the farm and 50 more will be put in by NDA. NDA is also extending technical assistance to the breeder farm. The first of its kind in the Philippines, the farm will become the source of future calves for dairying.


"If we have the base stock, in two to three years' time, we can be sufficient. We don't need to import the animals," Molina says.


The breeder farms hopes to keep the cost of pregnant heifers down. While pregnant heifers are sold in the market at PHP90,000 (US$1,900) each, the farm can supply it to farmers at only P50,000 (about US$1,060).


While both government and the private sector are doing all they can to give the Philippine dairy sector the shot in the arm that it deserves, the New Zealand government also tries to pitch in. It recently gave the Philippines hundreds of milking cows for distribution to dairy farmers all over the country.


"For many years, the Philippines has been a huge market for New Zealand's dairy products, but then we realized that there is great interest in developing the Philippine dairy sector and we'd like to play our part in it," says New Zealand ambassador to the Philippines David Strachan.


"Dairy production is quite a sophisticated industry and it's an industry where New Zealand is probably a world leader, and we are happy to share our expertise and technology with the Philippines," he says.


The ambassador believes that the new government under President Duterte, who has promised to invest a lot in agriculture, will usher in a new era for the Philippines' fledgling dairy industry.

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