THE DEVELOPMENT OF DAIRY FARMING IN THAILAND

by

S. Pichet

BACKGROUND

Although dairy farming in Thailand began around 80 years ago, the introduction of extensive dairy development took place in the early 1960s. It started with the establishment of the Thai Danish Farm and Training Centre (TDDF) at Muak Lek, as a joint venture between the Thai and Danish Governments. The approach was the clearing of land, purchase of cattle, construction of farm buildings, training of farmers, development of a dairy colony, provision of extension services and development of a small dairy plant, as well as a marketing system for pasteurized milk production. In 1971, the Thai Government took over responsibility and the project was organised under the management of the newly established government enterprise, under the name of “The Dairy Farming Promotion Organisation of Thailand (D.P.O.)”

The objectives of D.P.O. are to promote milk production, to process milk and to sell milk products. Several important activities have been employed by D.P.O. to promote dairy farming. These include offering crossbred heifers at cost price to newly established dairy farmers, training of people wanting to become dairy farmers, provision of extension services including artificial insemination, veterinary services, milk recording, farm management advice, a milk collection centre and the buying of milk at guaranteed prices.

Milk production in the Nong Pho area started almost at the same time as in Muak Lek, but in a different way. The farmers were already established there, with smaller pieces of land, but they were more progressive and had the assistance of the Department of Livestock Development (D.L.D.). Crossbreeding was successfully employed through the use of artificial insemination. In 1971, a cooperative dairy plant was built and the milk production, the organisation of milk processing and milk marketing have all been most impressive.

The Thai-German Dairy Training and Processing Plant in Chiang Mai was established in 1968 and operated as a joint venture until 1977, at which time it was taken over by the Department of Livestock Development (D.L.D.). Since 1979, D.P.O. has been responsible for the processing and marketing functions.

In 1982, D.P.O. started the dairy farming project in the South, which included construction of a dairy plant for UHT milk at Pranburi, Prachuab Kirikan. The purpose of the project was to reduce the area used for growing pineapples, because farmers were earning inadequate incomes due to over-supply of the product. In addition, waste from the pineapple canneries could be used as a cheap roughage for dairy cattle.

GOVERNMENT POLICIES FOR DAIRY FARMING

Current dairy policies approved by the Agricultural Policy and Planning Committee on 20th February, 1987 are as follows:

• to promote the expansion of raw milk production in order to reduce importation of dairy products,
• to increase the efficiency and quality of dairy farming, milk collection, milk processing and milk marketing,
• to strengthen dairy cooperatives as profit oriented organisations,
• to encourage the private sector to be involved in dairy development, and
• to organise an independent Milk Board with representation from all sectors of the dairy industry which would execute policy on an industry-wide basis.

The Government's plan for the development of dairying is aimed at a reduction of foreign exchange for the purchase of imported dairy products but also to provide the farmers with the opportunity to earn increased and more regular incomes and generate employment opportunities in farming, milk processing and manufacturing industries. The target is to produce 328,000 tons of raw milk by 1996, which can meet half the demand for dairy products. To achieve this, it will, for instance, be necessary to increase the number of dairy cows to 117,000, which will require a growth rate of 18% per annum (Table 1). The goal could be reached in two ways: by increasing the local supply of dairy cows through the insemination of local Brahman-cross cows and by purchasing from overseas.

THE GROWTH OF THE RAW MILK PRODUCTION FROM 1982 TO 1987

Over the past 25 years, the Government's support to dairy farming through D.P.O. and other key government departments has been successful. For instance, in the period from 1982 to 1987, the production of raw milk has increased annually by almost 24% to 79,000 tons by the end of the period. The number of dairy cattle has, over the same period, increased by approximately 20% annually to 75,500 head in 1987 (Table 2).

Ever since its establishment, the D.P.O. has, together with the Nonh Pho dairy cooperative, dominated the production and utilisation of raw milk. In 1985, D.P.O. had a share of 66% of the raw milk production, 66.8% of the dairy cattle population and 58.4% of the dairy farmers are suppliers.

Source: Office of Agricultural economics

Source : office of Agricultural Economics

DEMAND FOR RAW MILK PRODUCTION

The scope for development of the dairy industry is excellent, because the production of raw milk in 1989 is still only a fraction of the total demand. If all milk products consumed in 1986 had been made in Thailand, at least 500,000 tons of raw milk would have been required. The actual production of raw milk was 69,000 tons or 14 % of the demand.

The raw milk collected by D.P.O. and the cooperatives is processed into ready to drink (RTD) milk or sold in bulk to private dairy companies, and the latter also use the raw milk for RTD milk, which includes pasteurized milk, U.H.T. milk, canned sterilized milk, etc. In the first instance, the raw milk production could be used to meet the demand for RTD milk.

Table 3 shows how the position would be then: the production of raw milk in 1986 was 69,200 tons (14%) of the total demand, while RTD milk consumption was 81,600 tons or about 17% of the total demand. It is interesting to note, that the consumption of RTD milk went up to 126,300 tons in 1987. This increase is the result of the milk consumption promotion campaign supported by the Government and the private dairy companies.

CONSTRAINTS ON RAW MILK PRODUCTION

One constraint on the raw milk production is the high costs of some inputs required in the production, in particular concentrate feed. The percentage contribution to the total variable costs in the period January - June 1986 were: concentrates 60%, roughage 16%, disease 2%, labour 15% and others 7% (Source: office of Agricultural Economics).

Another constraint is shortage of dairy cattle: the growth in the number of local crossbreds is insufficient and imported cattle are rather expensive. The price (CIF) of imported New Zealand crossbred heifers (5–7 months pregnant), in 1987 and 1988, was 860 and 910 US dollars respectively. Early in 1989, the cost climbed further to 960 US dollars.

Ways to increase the productivity and reduce costs of production would be to:

• improve feeding management. This would involve more use of improved grass/legume pastures, which could result in a reduction of the need for concentrates, as well as reduce the level of nitrogen fertiliser use. Furthermore, the pasture conservation could be improved and the use of by-products from crop production and/or agro-industries could be increased.

• improve management of the animals to improve the conception rate and reduce health problems, in particular mastitis.

• improve farm advisory services. The farm advisers should be familiar with progress in research and technology and should advise the farmers on the application of new techniques.

• improved breeding programmes. For instance, a national progeny test scheme for locally selected bulls should be developed and thereby reduce the need for expensive overseas semen. Implementation of better breeding programmes would also result in higher milk yields.

• improve systems for handling excess stock (bull calves, excess female calves and cull cows). Bull calves could be raised for dairy beef production.

COSTS OF RAW MILK PRODUCTION

Much greater emphasis must be placed on developing the required knowledge and skills to introduce and manage high quality improved pastures successfully. Farmers should understand and appreciate that there is a great deal of basic scientific evidence from many overseas countries showing that animal performance, and especially milk production, is much more dependent on the quantity and quality of feed eaten rather than on the genetic make-up of the animal. It is only when the level of feeding is high, in both quantity and quality, that the value and importance of good breeding generally becomes apparent. In other words, while dairy farmers should certainly give some attention to their breeding programme and the selection of semen, much more attention should be given to developing and improving their feed quantity and quality, particularly of their pastures which are the cheapest and most common source of feed for dairy cows in Thailand.

This view is supported by data obtained from a recent experiment at D.P.O. (Muak Lek). The cows involved were all 62.5 to 75% Holstein-Friesian or Red Dane crossbreeds in their lst, 2nd or 3rd lactation and fed different levels of concentrate according to milk production, ranging from improved pasture only (no concentrate) to ad libitum concentrate feeding, with 10 cows on eachlevel of feeding. Detailed measurements of milk production, milk fat, animal health and pasture utilisation were made during both early and late lactation. Prior to the experiment a total of 50 cows were balanced across the five treatments, in order to ensure that there was no bias in production which might unfairly favour one treatment over another.

In this example, three comparisons were made: of cows fed improved pasture only ; of cows fed 1 kg of concentrate to 3 kg of milk (3:1) plus improved pasture; and of cows fed ad lib. concentrate plus improved pasture. It is assumed that the cows ate approximately 4 kg DM per 100 kg body weight daily, which meant that the average 350 kg liveweight cows each ate approximately 14 kg of pasture DM on the pasture only treatment, approximately 10–11 kg of pasture DM plus 3–4 kg of concentrate in the 3:1 treatment and approximately 13–15 kg of concentrate plus negligible pasture in the ad lib. concentrate treatment.

These data plus the more obvious economic parameters are presented in Table 4. It is clear that dairy farmers can achieve a highly economic return from cows fed pasture only, provided that the pasture is properly managed, leafy and hence of high quality. A production of 2,400 kg of milk can be obtained from just “average” cows and up to 3,150 kg from “good” cows, yielding an estimated “profit” of 14,400 Baht and 20,420 Baht respectively per lactation. When a relatively small input of concentrate was also fed along with improved pasture, milk production was increased and more importantly, profitability was also increased. When cows were fed to appetite on meal concentrate of 15.5% crude protein and an estimated TDN of 70%, milk production was further increased but profitability was decreased. Obviously with the present price of meal concentrate farmers will achieve greater profit by relying on improved pasture as their main source of feed for dairy cows plus a small input (3:1) of concentrate, rather than striving for higher milk production from only concentrate but at higher cost.

CONCLUSIONS

The efforts of the Government in the development of dairy farming in Thailand have been successful. There has been a satisfactory increase in milk production and in the number of dairy cattle and dairy farmers, so that today Thai farmers produce 15% of the raw milk needs for all milk products. By 1996, they could be producing 50%. Such a rapid growth requires great investments in facilities for the farmers. For instance, it will be necessary to import dairy cattle to get enough animals and to get the right stock. Furthermore, training of farmers and good extension services are important factors, especially in making dairy farming into a good business. Serious efforts must be made to reduce the costs of milk production and, as concentrates are expensive, it would pay to look for better utilisation of pastures and fodder crops.