SAARC Dairy Outlook Compiled and Edited by Dr. Md. Nure Alam Siddiky Senior Program Officer SAARC Agriculture Centre SAARC Agriculture Centre i SAARC Dairy Outlook Contributors Dr. A. K. Srivastava Director and Vice Chancellor ICAR-National Dairy Research Institute (NDRI) Karnal-132 001 Haryana, India Dr. A. Kumaresan Senior Scientist (Animal Reproduction) Livestock Research Centre ICAR-National Dairy Research Institute (NDRI) Karnal-132 001 Haryana, India Dr. G. R. Patil Joint Director (Academics) ICAR-National Dairy Research Institute (NDRI) Karnal-132 001 Haryana, India Published in November 2015 ISBN: 978-984-33-9790-4 Published by SAARC Agriculture Centre (SAC) BARC Complex, Farmgate, Dhaka-1215, Bangladesh Phone: +880-2-58153152, Fax: +880-2-9124596 E-mail: [email protected], Web: www.saarcagri.org Cover Designed by Ms. Mafruha Begum, SPO (I&C) Price US$ 5.00 for SAARC countries US$ 8.00 for other countries Printed at Natundhara Printing Press 277/3 Elephant Road (Kataban Dhal), Dhaka Cell: 01711019691, 01911294855 Email: [email protected] ii Foreword The role of livestock in livelihood, nutritional and food security of millions of people living in SAARC countries has been well understood. Among livestock, dairy animal assumes much significance since dairying is acknowledged as the major instrument in bringing about socio-economic transformation of rural poor and sustainable rural development. Unlike crop which is seasonal, dairying provides a stable, year-round income, which is an important economic incentive for the smallholder farmers. Dairying directly enhance the household income by providing high value output from low value input besides acting as wealth for future investment. It also offers a buffer income to the family during crop-vulnerable calamities. Till date, smallholder dairying is the backbone of dairying and contributes to more than 70 percent of the total milk produced in the region. However, in the recent past, several countries witnessed increase in income levels of the population, especially of large middle class that led to a spurt in demand of quality milk and milk products in the region. It is evident that without much transformation in the existing milk production system, we may not be able to meet the demand for milk and milk products in future. To meet the projected demand of milk and milk products, the region has to equip itself to witness the transformation in dairy sector from subsistence oriented to commercial/semi-commercial oriented activity. Such transformations, although not universal, are already taking place in few SAARC member countries. While promoting the commercialization of dairying in SAARC member countries, we have to exercise some mechanisms to protect the interests of smallholders since dairying is a part of livelihood for these poor people. Any mechanism which ignores livelihood issues would be inequitable and therefore may not find acceptance in the poorer regions of the world. Thus, by facilitating the large scale commercial dairying only, it may not be possible to obtain inclusive growth; however boosting the smallholder dairying as a whole and commercial dairying at identified areas would keep dairying as an instrument of inclusive economic development. Milk processing in the region is still in primitive stage. The total share of the organized sector, cooperatives, government as well as the private sector is very less leaving a lion’s share of the total milk production in the hands of the unorganized sector. The untapped potential of the dairy sector in SAARC member countries is immense and opportunity to set up new ventures for value addition is great. In order to meet the growing domestic as well as export demand, the dairy iii sector must increase its competitiveness in the global market place, by bringing about a qualitative transformation in the unorganized sector, which incidentally meets the entire demand for traditional dairy products, to ensure consumer safety. There is a need to upgrade the dairy value chain to eliminate inefficiencies and lower production and processing costs, while simultaneously increasing milk quality so as to meet domestic and international standards. The dairy industry must bridge the significant quality gaps that exist, meet higher quality standards and seize market opportunities, while defending its domestic market from high- quality imports. Therefore, major transformations in dairy sector are anticipated to impart greater competitiveness and opportunities for value addition. In this document “SAARC Dairy Outlook” we sincerely made an attempt to compile the data related to dairying in different countries of SAARC region and situation analyses of input and delivery system for identifying the points of interventions to boosting dairy production and processing. In gist, this document narrates the facts about the current dairying in the SAARC member countries and envisages the priorities to make the dairying sustainable and more productive with the aim to cater the inclusive development of dairying in the region. It is hoped that this document will provide a wealth of information to the researchers, planners, entrepreneurs and other stakeholders for upliftment of dairy industry in SAARC member countries. I like to convey my sincere appreciation to Dr. M. Mujaffar Hossain, Professor, Bangladesh Agricultural University for editing the final version. Dr. S. M. Bokhtiar Director SAARC Agriculture Centre iv Contents Chapter Topic Page No. Chapter 1 : Importance of livestock in SAARC member countries 1 Chapter 2 : Dairy animal population in SAARC member countries 8 Chapter 3 : Dairy animal breeds 23 Chapter 4 : Dairy animal production systems 32 Chapter 5 : Milk production in SAARC member countries 44 Chapter 6 : Situation analysis of inputs for dairying 58 Chapter 7 : Milk collection and marketing channels 67 Chapter 8 : Strengths, weaknesses, opportunities and threats (SWOT) 90 for dairy development in SAARC member countries Chapter 9 : Subsistence to commercial dairying: Key considerations 93 Chapter 10 : Strategies for boosting dairy production 102 Chapter 11 : Quality control in the traditional and commercial dairy 111 sectors Chapter 12 : Diversification of dairy products by traditional and novel 114 technologies Chapter 13 : Role of private sector and its collaboration with public 138 sector Chapter 14 : Dairy development in SAARC member countries: The 142 way forward References 151 Sources of data 159 v List of Figures Figure 1: Dynamics of dairy animal population in the world 12 Figure 2: Contribution of SAARC member countries to total dairy animal 13 population in the world Figure 3: Distribution of individual dairy animal populations in 14 different SAARC member countries Figure 4: Dynamics of dairy animal population in Afghanistan 15 Figure 5: Dynamics of dairy animal population in Bangladesh 16 Figure 6: Dynamics of dairy animal population in Bhutan 17 Figure 7: Dynamics of dairy animal population in India 18 Figure 8: Dynamics of dairy animal population in Nepal 19 Figure 9: Dynamics of dairy animal population in Pakistan 20 Figure 10: Dynamics of dairy animal population in Sri Lanka 21 Figure 11: World milk production in million tons 46 Figure 12: Top 10 milk producing countries in the world 46 Figure 13: Average individual animal milk production (kg/year) 47 in different countries Figure 14: Contribution of different SAARC member countries to 47 total milk production in the region in 2012 (FAO) Figure 15: Contribution of different animals to total milk produced in the region 48 Figure 16: Trend in total milk production in SAARC member countries 48 Figure 17: Trend in milk production in individual SAARC member countries 49 Figure 18: Contributions of different animals to the total milk production 52 in individual SAARCC member countries Figure 19: Individual animal milk productivity in SAARC member countries 53 Figure 20: Trends of individual animal’s milk productivity in 57 SAARC member countries Figure 21: Product-wise consumption pattern 71 Figure 22: Supply chain of Indian dairy industry 75 Figure 23: Milk marketing channel in Nepal 84 Figure 24: Milk marketing chain in Pakistan 86 Figure 25: Supply chain for milk in Sri Lanka 89 vi Figure 26: Buy-back model for effective use of male germplasm 104 Figure 27: The potential thrust areas in the Indian dairy industry for 140 the PPP to intervene List of Tables Table 1: Annual growth rate of dairy animal population in SAARC 22 member countries Table 2: List of cattle/ types breeds as per SAARC Agriculture Centre study 23 and FAO in different SAARC member countries Table 3: List of buffalo breeds as per FAO in different SAARC member countries 28 Table 4: Yield gap analysis for milk production in cows (2011) 55 Table 5: Yield gap analysis for milk production in buffaloes (2011) 56 Table 6: Gross chemical composition of cow and buffalo milk 130 Table 7: Physical properties of buffalo and cow milk 132 vii Chapter 1 IMPORTANCE OF LIVESTOCK IN SAARC COUNTRIES The livestock sector is one of the fastest growing segments of the agricultural economy, particularly in the developing world. Livestock are central to the livelihood and nutritional security of the poor community. The contribution of livestock to livelihoods of millions of people in SAARC member countries are well beyond the production for household consumption or for market. Besides their monitory benefit and providing a steady stream of food and revenues for households. Livestock provide employment to the family,