Milk imports cost US $ 400m annually:

Demand for fresh milk up 16%, supply shrinks

The annual demand for fresh milk in the country has increased by 16 percent while the supply is growing at a snails pace resulting in more imports of milk powder at a staggering cost each year, statistics reveal.

Sri Lanka’s annual milk requirement is around 750 million tonnes while local production is around 300 million tonnes. Sri Lanka spends around US$ 400 million a year on imports of milk products a year.

Dairy industry experts said Sri Lanka should boost its current milk production which meets around 40 percent of the country’s requirements with more hybrid cows, adequate access to food, water and sheds to prevent heat stress that would increase the yield.

A local cow would yield around five to eight litres of milk a day whereas in New Zealand a cow produces around 25 litres a day.

Experts at a recent media briefing organised by Fonterra Brands Sri Lanka to outline its plans for the year, said the cooperative system with sustainable dairy farming has helped New Zealand to build a vibrant dairy industry.

Managing Director, Fonterra Brands Sri Lanka, Leon Clement said the company collected 30,000 litres of milk in 2015, a 50 percent increase compared to the previous year. Currently around 7,000 farmers across the country supply milk to Fonterra which hopes to add around 1,000 farmers each year to its network each year.

Fonterra Brands Sri Lanka launched construction work on its first demonstration and training farm in Pannala as part of the company’s long-term investment in the growth of the local dairy industry.

The dairy co-operative, which has been operating in Sri Lanka for over 38 years, has invested over Rs. 380 million in local dairy development over the past two years and is committed to working with partners to increase milk collection, improve milk quality and lift farmer incomes.

Managing Director, Fonterra Brands Sri Lanka, Leon Clement said, “We are already seeing positive change in the Sri Lanka dairy industry with the government making a meaningful difference through imported cow genetics and working with farmers.

“We believe we can help accelerate this change through consistent investment in training and infrastructure to improve farming practices and animal health,” said Clement.

The demonstration and training farm will be built at a cost of Rs. 117 million. Fonterra Brands Sri Lanka will continue to scale up its investment in the country’s dairy industry, and next year will increase its current network of Supplier Relationship Officers (SROs), who are dedicated to training and educating farmers on best practices. It will also build five new milk chilling centres. “These efforts will result in the opportunity for an additional 2,000 Sri Lankan dairy farmers to supply Fonterra, helping to grow the incomes of farmers across the country. “We also hope to build an additional three demonstration and training farms by next year, however, to do this we will need to find the right partners and available land,” said Clement.

The Pannala demonstration and training farm will be operational by the end of next month and will employ administrative managers, animal care specialists and farm hands. Each year the farm will train around 2,000 farmers, with 180 days dedicated to training.

Completely funded and operated by Fonterra, the farm will share the dairy co-operative’s world-class dairy farming knowledge through farmer visits, field days, short course training and apprenticeship programs.

Fonterra’s co-farm program is made up of a number of key areas of focus including fodder, advanced animal nutrition, animal welfare, milk quality management and farm business management. “Fonterra has over 100 years of dairy farming experience and our co-operative structure is built on innovation, an attitude of working together, and a willingness to try new things. “This has allowed New Zealand farmers to create practices and processes that work in New Zealand’s environment and climate. This is what we are looking to bring to Sri Lanka, working with partners and farming families to find the best farming system that complements the country.

“Ultimately, through training and education we believe we can support local farmers to produce more and higher quality milk which will create a more sustainable and economically viable local dairy industry,” said Clement. The farm will include a milk shed, training centre, milk chilling facilities and fodder cultivation area.

Fonterra Brands Sri Lanka is also committed to supporting its local dairy communities. Since launching its Grassroots Fund in 2014, the dairy co-operative has contributed Rs. 15 million towards 16 projects in five dairy communities. Working with partners such as Sarvodaya Shramadana Movement and the Kansarmenn Foundation, the Grassroots Fund has supported water, sanitation and other infrastructure projects.