Dairy farming: The toils and sweat of raising ‘living banks’

BY RICHARD CHIROMBO

Less than 15 people- apparently, unelected officials of the people- sat down in some tiny Blantyre board room a couple of months ago. Their duty: to decide, without public mandate, whatsoever, the future and income-destiny of 4, 000 Malawians who eke their living by feeding dairy animals so the animals may in turn churn out the ‘waters of cash’- milk- and contribute towards the growth of the country’s dairy industry.

Coffee and milk exchanged hands in that board room, rife with smiling faces and hand shakes. Then, the smiling faces came out, wearing the mask of sad news, to declare some irrevocable decision to 4000 people who feed the nation through that nutritious drink milk.

“From June 1, 2009, the buying price for raw milk from local farmers will change from K68 per litre to………..” there was some chuckling noise- apparently in anticipation of good news, by milk producer groups- including Shire Highlands Milk Producers Association of Malawi (Shimpa) and Malawi Milk Producers Association (MMPA) whose Chairperson and President, respectively, is Phillimon Kapinji.

Willard Aaron Khungwa, and Phillimon Madukani Phiri, Chairperson and Financial Manager for Bvumbwe Milk Bulking Group, respectively, would have jumped in a parachute of excitement over the, apparently, imminent ‘good’ news- like all other people at Chandamale Milk Bulking Group, also in Bvumbwe, Thyolo, and other parts of Malawi. Adjustments in buying prices, though very welcome, rarely come handy for milk producers.

“K50.” Silence.

It was a reduction and not adjustment as anticipated by milk producers, a decision that has shocked farmers.

That (silence), too, was the mood when milk producers met in Blantyre Friday, under the armpit of Shimpa, to discuss about the new development.

“It will affect dairy farmers. A lot goes into feeding the animals, milking, and medication that even the K68 per litre buying price for raw milk was hardly enough to meet the needs of the poor farmer,” said Kapinji a day later at his base in Thyolo (Bvumbwe).

He adds: “Otherwise, there is no future for dairy farming in Malawi .”

Kapinji said increased imports of milk products, especially from European countries, where dairy farmers have their running and production costs “massively” subsidized, were chocking local industry because such products often attracted cheap prices on the local market. This has meant increased production costs for local milk products’ processors and influenced their recent decision to reduce raw milk buying prices from farmers.

His statement sounds very much like what Dairiboard Managing Director, Theodora Nyamandi, said about production costs. She bemoaned the high production costs in the country saying they were impinging on local companies’ capacity. Last week she was reported to be outside the country to give a refreshed view.

Kapinji has his suggestions on reducing the impact of foreign milk products on local production: The current taxation regime for products from the Common Market for Eastern and Southern Africa region be increased from the current 10 per cent to 25 per cent; special permits should be required for foreign manufacturers to export their products to Malawi; a 10 per cent (foreign) quota be imposed on European products so that the remaining 90 per cent market share is restricted for domestic milk processors.

But, according to Malawi Economic Justice Network Executive Director, Andrew Kumbatira, that would be against international trade protocols that advocate for free and fair trade. To Consumers Association of Malawi Executive Director, John Kapito, it would be tantamount to gagging consumer choices.

When there are so many products to choose from, products’ prices tend to be cheap; when there are few options available, the consumer is pushed from left to right by powerful manufacturers, he says.

However, Kapinji banks on the Ministry of Industry and Trade. He urges the ministry to come to the rescue of local dairy farmers and the processing industry, which rests on continued milk supply from farmers.

He blames the reduction in raw milk buying prices (by processors) not on the processors; the system. He wants the once tight control measures to be back, replete with strategies and mechanisms that shelter the local dairy farmer from market shocks- a form of social security measure for their toil and sweat.

Processors of milk products- led by Suncrest Crimaries and Dairibord, among others- announced recently they would reduce buying prices for raw milk from K68 to K50 effective June 1. The processors say the influx of foreign milk products, both for fresh and powdered milk, had resulted into lack stocks of locally processed milk returning from the market.

This is said to have affected he performance of local industry players.


Back ground of dairy industry in Malawi

The country’s economy depends on agriculture, in which 90 per cent of the population is said to be involved in agriculture at some stage, in some way. With an average land holding size of 1.5 ha. Agriculture experts have tended to put much emphasis on increased production per hector while policies on livestock are directed towards self-sufficiency in all livestock products, and the export of any surpluses that may arise.

The Malawi Growth and Development Strategy (MGDS; 2006-2011) goal on agriculture, for instance, is to increase the share of smallholder farmers from 23.6per cent to 34.9 per cent, as well as increasing the trade volumes for agricultural products.

According to Wilfred Lipita, Director for the Department of Animal Heath and Livestock Development in the Ministry of Agriculture and Food Security, this goal was being met. He said the country had witnessed an increased number of dairy farmers because it had revamped the once-down-and-out extension systems infrastructure.

The country, however, suffers from insufficiency in milk production, a development that has attracted target specific interventions from the Ministry of Agriculture, Ministry of Industry and Trade, and that of Economic Development.

Efforts aimed at developing the dairy industry in Malawi date back to as early as 1970 when Food and Agriculture Organisation (Fao), through the United Nations Development Programme (UNDP), initiated a programme that focused on improving productivity of dairy cows under smallholder farms. It focused on the use of agro-products as a concentrate source in a bid to provide fresh milk for the increasing population; reduce importation of milk by-products; and provide an alternative means of income for farmers hither to used to cultivating maize.

The majority of farms established then used liberal amounts of a mixture of maize bran, and dried leucaena leaves were being fed to cows, while the majority of farms used maize bran. All cows were confined to stalls as a means of conserving energy, for easy detection of heat and to avoid contact with local Malawi Zebu bulls, according to a report from the then Department of Animal Health and Industry of the Ministry of Agriculture.

The system of confining dairy animals to stalls continues to date as a means of preventing diseases and contact with the Malawi Zebu.

The Fao and UNDP dairy farming initiative saw 1200 farmers from Blantyre , Lilongwe and Mzuzu being given ½ Friesian crosses. Records were then kept from 1973 to 1984, and data sent to the International Livestock Centre for Africa (ILCA) which analyzed it to compare the important reproductive and productive traits; measured the influence of environment, including years and season; assessed the suitability of various crosses to the different agricultural areas in the country and; determined the trends in dairy production.

The development helped agricultural researchers in coming up with the right breeds and crosses for Malawi . It covered Blantyre South, Blantyre North, Chiradzulu, Thyolo North, Mulanje West and Zomba, and used ½ Friesian or ¾ Friesian breeds.

Agricultural area, breed group, year of calving and area by breed interaction had a significant effect on total lactation milk yield, with high total milk yields in Zomba and Thyolo North (where most of the farmers who make up Shimpa are located and continue to practice dairy farming). The Ministry of Agriculture report attributes this to the general availability of animal feed throughout the year and because most farmers were new to dairy farming and were prepared to accept new innovations from extension workers more readily than their counterparts who had long time experience with the Malawi Zebu.

“These people resisted the idea that crossbred cows should be managed differently. In addition, smallholder operations were first started in Thyolo North and farmers in that area had gained more experience in handling crossbred cows than farmers elsewhere,” reads the ‘Productivity of Dairy Cows under Smallholder Farms Using Agro-by-products as a Concentrate Source’ report in part.

It adds that common feeds included Urea, cottonseed cake, Molasses, Maize bran, Monocalcium phosphate, salt, maize, groundnuts cake, wheat middlings and Dicalcium minerals, products Kapinji said had become too expensive for the local farmer, now faced with reduced raw milk supply prices.

Ministry of Agriculture analyses current situation

The Ministry of Agriculture and Food Security says it has been trying hard to improve the dairy farming environment in the country, with much emphasis on increasing production and good management systems.

Wilfred Lipita, Director for the Department of Animal Health and Livestock Development- an arm of the ministry- said in an exclusive interview Friday dairy farming was growing at an average rate of 15 per cent since 2001, resulting into increased dairy animals and milk production per cow.

The country had 17, 000 dairy animals in 2001. Now the figure has gone up to 38, 000, and Lipita says the development comes in the wake of increased efforts towards revamping the industry and improved security that farmers no longer look behind their backs.

“Currently, the average milk yield per cow each day is 8 litres. This means we are now producing over 34, 000 metric tonnes of milk annually. If you multiply the 34, 000 times 1, 000, you will discover that Malawi is producing millions of litres of milk each year.

“Government has put in place facilities, strategies and the necessary infrastructure to develop the industry: We now have Livestock Multiplication Centres, which are producing dairy crosses for sale to farmers that, in 2008, we managed to produce 150 dairy cows which have already been sold to farmers owing to the huge demand for dairy cattle; we have put in place measures aimed at improving the number of breeds produced every year to 500; and are providing extension services to dairy farmers to increase production and improve on their animal husbandry practices,” said Lipita.

He added: “You may wish to remember that the Animal Multiplication Centres nearly collapsed some years ago. We have revamped them and are now working. We are also working on the low milk consumption problem; we think it emanates from poor husbandry practices, resulting into inadequate production. Let our farmers realize that there is money in dairy farming because dairy animals are ‘moving banks’; they are ATMs (Auto teller Machines) one merely needs to feed and take good care of.”

Lipita said milk products also had the “healing power” to change the social-economic and nutritious status of Malawians, saying that was the reason government initiated the Dairy Development Project. This is a self-funded (Malawi Government) initiative aimed at improving fortunes in the dairy sector.

During the 2007/08 fiscal year, government provided K120 million for implementation of the project, a working figure that increased to K150 million during implementation of the 2008/09 national budget. Lipita said the ministry also expected K150 million in this year’s to 2010 budget. The budget is yet to be passed, as the country’s new fiscal year takes effect from July1.

He said they expected to increase efforts towards encouraging good housing, feeding mechanisms, disease control and pasture production among the country’s 4000 dairy farmers. Lipita advised farmers against dipping their dairy flock in any other tank, as that would compromise milk quality.

He said farmers should only dip dairy animals in special tanks, as dipping at any other place would increase the chances of milk contamination. Normally, he said, animals are not supposed to be milked for one to two days once dipped in undesignated dips to reduce the hazardous risk of poisoning consumers.

Asked to comment on the issue of pricing, Lipita said pricing remained a contentious issue, one that could be tackled by increasing production because farmers would not feel the hard pinch of low buying prices if they produced more. They would still live above the poverty line, he maintained.

“The issue of marketing is a complicated one. I understand that milk processors, who were buying raw milk at around K68, now want to reduce the buying price. There is need to come up with an amicable system where the needs of the consumer, processor and producer have to be reconciled. There are many people, already, who don’t drink milk; so, if we increase final product prices, it may affect the consumer, If we increase the (raw milk) buying price, the processor will push over that cost to the consumer as they would still want to get something out of the business that, in the end, this remains a complicated issue,” said Lipita.

He said, meanwhile, dairy farmers needed to increase production to curtail some of the effects because that would translate into negligible implications on their living standards.

“In fact, they will move out of poverty because, if one sells eight litres a day, that would be K400 and well above the poverty line. Let’s work together to bring a solution to this, that is to say farmers, consumers and processors,” he added.

Producers speak out: Bvumbwe Milk Bulking Group

Bvumbwe Milk Bulking Group (BMBG) is a grouping of dairy farmers formed in 1973, a living effort of the Fao/UNDP initiative of long. It has, in the words of the group’s Finance Manager, Phillimon Madukani Phiri, a group of farmers who depend entirely on milk.

There are 575 members for the group, with 350 of them supplying milk on daily basis.

“Milk is the life of many people here. Any problems in prices and wastage of raw milk affect them greatly, to the extent that some of them fail to pay school fees for their dependants,” says Madukani Phiri.

Yet, this group- of small, rural farmers who can hardly afford the demands of life without milk- has lost K1.3 million from May 15 to May29.

“Our buyer (one of the big milk processing companies in the country; name withheld) reduced the amount of milk we supply to them, saying we were supplying too much milk. Yet this is the same country where they say milk consumption and production is low: where is the logic? Our storage facilities (two) keep 3.200 litres of raw milk daily, ready to supply to our buyer,’ he said.

May19, 2009 came as any other day. The two cooling facilities (sorry; one- Madukani Phiri claims the other one got damaged after one of Electricity Supply Corporation of Malawi’s (Escom) power black outs. K200, 000 is needed to get it repaired by the poor farmers as Escom has refused to shoulder the blame) were filled to the brim when, from nowhere, the processor came and said he would take only 2200 litres.

“1, 000 litres of milk went bad that day. Sadly, the trend has continued to date (May29, day of the interview at Bvumbwe. This means we have lost a whooping K1.3 million, small as we are and made up of farmers who entirely depend on milk for a living,” said Madukani Phiri, visibly a perturbed man.

He was a bit confused because, to shape up to the new development of a quota, he has to decide as to whose milk should be sold (as part of the 2200 litres the processor says will be buying, leaving 1, 000 litres for the flies) and whose (milk) should not.

“That is difficult. This is a group, and groups don’t work like that. We are losing a lot of milk and dairy farmers are complaining because that is money to them, It is school fees and fertilizer. To see their efforts wasted like that could have dire consequences for the dairy industry and, the time these processors would wish us to improve production, the industry will have been destroyed. How do we tell farmers we will only use milk from 150 of you and not all of you?”

Coming at a time processors and policymakers were saying milk production and consumption remained low per capita, the development is a jig saw puzzle to many farmers in Bvumbwe. You can see milk flowing, around the Police roadblock, as women resort to selling raw milk at K250 per 5 litre bottle.

Madukani Phiri challenges everybody that farmers in Bvumbwe have the capacity to deliver on any demand for milk, disputing sentiments milk production was low. He said milk production was now so overwhelming that processors had introduced quotas on milk producers, a development blamed on imported, cheap milk products.

That Friday afternoon, May29, a group of people were seen flocking to Bvumbwe Milk Bulking Group. During the day, there were not many customers who flocked to the group’s sales’ office to buy own-processed milk- why now?

“They know that some of the milk has gone bad and can not be sold to processors, and want to lay their hands on it for home consumption.”

As it turned out, some brought tins, others 5 litre bottles. Only that the watchman also said he wanted alittle bit, so he warned people against taking from his basin.

That is a sad end that has become part of the story since May19, as 1000 litres of milk produced by largely-impoverished farmers goes bad daily, and others see lack in that misfortune. A new breed of milk drinkers has been created at Bvumbwe!

“We really need help; the introduction of quotas by milk processors will affect many people and affect dairy farming,” says Madukani Phiri, now in the milk cooling room where one equipment no longer works, pointing at the five melting ice blocks. They have taken the task of electricity.

Quotas threaten milk production

The Malawi Milk Producers Association (MMPA) has bemoaned the introduction of quotas by milk processors, saying the new trend would stifle growth in the industry.

Phillimon Kapinji, MMPA President, said in an exclusive interview the development went against well-researched findings that have revealed glaring disparities in milk production and consumption in the country.

Kapinji said the development would affect the 4000 farmers who earn their living through milk production.

“There is no basis for that, really. When have we started producing so much milk as to introduce quotas? Bulking groups have been heavily affected by this,” said Kapinji.

He said there was need for government’s intervention, adding MMPA had already started negotiations with the Ministry of Industry and Trade and that of Agriculture.

“Much as we understand that local suppliers are being outdone by cheap milk imports from the European Union and other Common Market for Eastern and Southern Africa countries, introducing quotas will only disenfranchise and kill the industry,” he said.

He urged government to introduce mechanisms aimed at controlling the “overwhelming influx” of powdered milk imports, and make sure the percentage of imports made up for only 10 per cent of local market share so that the remaining 90 per cent (market share) is reserved for local milk producers and processors,” said Kapinji.

Kapinji, however, contradicted with Ministry of Agriculture and Food Security statistics over the number of dairy farmers in Malawi . He said his organisation had 6, 000 registered farmers- a development he said signified growth of the industry.

He said dairy farmers stood a better chance of resolving their problems and challenges if they formed associations related to their cause. He said working in groups had so many benefits, including bulk buying of animal feed, supply bonuses and continued flow of income as other members came to the rescue of each other in times of financial inadequacy.

History of dairy farmers groups

The establishment of milk bulking groups came after the early efforts to develop dairy farming in Malawi , carried out in the early 1970s.

Kapinji, who is Chairperson for the Shire Highlands Milk Producers Association (Shimpa) and President for the Malawi Milk Producers Association, said bulking groups arose when the number of farmers started to increase, and the need for a more common, authoritative voice emerged.

“These groups have since grown tremendously. There are several advantages: people work together; have a steady market as processors also want to be assured of continued supply and opt for groups other than individuals; they receive volume bonus, when they keep steady milk supply; and buy animal feed at wholesale prices, and reduce the costs incurred in rearing animals,” said Kapinji.

He said solving problems, such as the recent introduction of quotas, was also easy when farmers used one voice to air out their concerns.

Other groups include Dwale, Chandamale, Thunga, and Bvucco Community Based Organisation for Dairy Goats in Thyolo and Kalikwe Milk Buking Group in Dedza. Bvumbwe groups have benefited from the Agricultural Research and Development Programme’s initiative- the Dairy Entrepreneurship Project (Kukweza bizinezi yamkaka) meant to improve prospects in the sector. The One Village One Product initiative also works with people in groups, dairy farmers being some of the beneficiaries in Thyolo.

Through the Bvumbwe Milk Processing Unit, farmers have learnt improved farming practices that could as well compliment Ministry of Agriculture and Food Security’s projections to improve daily milk production per cow by double in five years’ time.

Bvumbwe Milk Bulking Group is the biggest in Malawi , with 575 members.

“That is why we are currently discussing with the Ministry of Industry and Trade, as well as that of Agriculture on various issues pertaining to the industry and how we can help improve things,” he said.

That was the reason, he added, Shimpa had many members. The association has 23 bulking groups in Blantyre , Thyolo, Mulanje, Chiradzulu, Zomba and Neno, while MMPA has members in all milk producing districts of the country.

We want better conditions, farmers say

Bvumbwe farmers have asked for improved conditions in the dairy industry, saying they were getting almost nothing out of their sweat and were leaving on the fringe of life’s basics.

Rhoda Solomon, 56, a dairy farmer with two cows, said she had a dream during her tender years: she wanted be able to take care of her children, meet her daily needs without too much dependency on her husband and to lead a comfortable life.

She thought dairy farming would be the route towards her destiny-dreams.

“I have managed to achieve some of these but am still struggling to break through the hard barrier to comfortable life. There is money in dairy business but things are not going on well, especially on prices,” said Solomon, as she joined other women farmers gathered at Bvumbwe football ground in preparation for World Milk Day on June1.

She wanted milk processors to increase buying prices for raw milk; a wish likely to end in disappointment as processors have reduced buying prices effective June1.

Only one of her three cows is being milked at the moment, giving her 10 litres of milk every day. That was K680 Kwacha daily before the price reductions-she will now make do with K500. This is against the K7, 200 she uses to buy the four 50KG maize husks bags she uses per month, among other inputs.

“We need improvements in prices so that we may be able meet other daily needs. Money from milk is not meant to be channeled into milk production only,” said the woman farmer from Tayale Village in the area of Traditional Authority Bvumbwe in Thyolo.

Her sentiments were echoed by John Damiano, 55, from Gunde Village , T/A Bvumbwe, Thyolo and Jason Binali, 54, from the same village. The fathers of 10 and 3 children, respectively, said they spend more on production inputs that what they got in return did not meet their daily requirements.

The two have two and seven dairy cows respectively, which they said made the “burden” of animal feed cumbersome.

“I need three bags of maize bran every month at K1800, 3 bags for Cowpeas husks at K1, 800 and medication costs. I can’t meet all these requirements with the money I get; the processors would have increased the price to K70 or K80,” said Damiano, surprised at the news they would, in fact, reduce the buying prices.

On the other hand. Binali said he only engaged in dairy farming to meet his dairy needs, but could not invest in anything because the proceeds he got from rearing milk yielding animals were not sufficient to meet other needs.

“In fact I have always wanted to channel some of the proceeds I make from dairy farming towards other equally-befitting ventures like opening up a grocery. I can’t, unless the processors increase the prices for buying from us. They make more money than us, the real farmers,” said Binali.