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Small-scale dairying in Bangladesh

(by Hafezur Rahman, Department of Parasitology, Bangladesh Agricultural University)

Slide 1

Md. Hafezur Rahman


Bangladesh with a population of 125 million is the most densely populated country in the world with over 880 people per square kilometer.

Per capita income, is US$ 430, nearly half of the population (47.0 percent) live in absolute poverty, consume less than 2,122 calories per day and 22.5 percent are hard-core poor.

Livestock contribute approximately 11 percent of the animal protein requirements of humans. It contributes 3.9 percent to national GDP and 27.0 percent to agricultural GDP and 7 percent to the export earnings.

Slide 2

It provides 16 percent to total employment in the economy; in the agriculture sector employment share of livestock is 39 percent (nearly 7 percent for poultry and 32 percent for other livestock).

For livestock production, family labour constitutes 78 percent and hired labour contributes only 22 percent indicating the predominantly subsistence nature of the sector.

Livestock also provide critical cash reserve and secured flow of cash for many marginal/landless farmer who either grow crops or sale labour for subsistence living.

Ruminant rearing is traditionally an important part of the integrated farming system in Bangladesh. The existing large ruminant population is estimated at 23.5 million, cattle, and 8.5 million buffaloes.

Slide 3

Cattle and buffaloes provide 90 percent of the traction power for tillage and rural transport, 10 percent of the fertilizer and 25 percent of fuel requirements. Holdings reporting bovines are 70.0 percent by small landholder farms, 26.0 percent by medium land holders and 3.8 percent by large land holders.

Most households rear cattle (3.75 on average) belonging to the traditional local breeds, and produce milk (1.69 litres/cow/day average). Milk production from such cows has traditionally been a by-product of using about 6.0 million cows used for traction.

During the last three decades, crossbred cows have found favour particularly in areas endowed with better resources and infrastructural facilities which now constitute about 15 percent of the population.

Slide 4


Milk is consumed by the household and by the calf, unless milk collection provides an opportunity for sale and regular income. Bangladesh produces about 1.62 million metric tons of liquid milk annually of which 90 percent is from cows and the balance comes from goat and buffalo.

Bangladesh is not self sufficient for milk and imports around 18,000 metric tons of milk powder annually equivalent to 0.16 million metric tons of milk or 8.5% of national production.

Over the 1985-95 periods cow milk had the slowest growth 2% only. Despite the growth there are substantial shortages of this product.

Slide 5

According to 1995-96 Household Expenditure Survey (HES) average per capita daily consumption of milk/milk products is 32.3 gm which is less than one-third of the minimum consumption requirements.

Consumption of milk/milk products increase largely took place in urban areas; the urban consumption of milk had increased by 81 percent compared to only 69 percent in rural areas.

In most parts of the country the surplus milk available after household consumption is only marginal.

Milk production and marketing is still very informal in Bangladesh. Milk which is largely produced in hamlets and hindermost parts of Bangladesh, makes its way to urban outlets where economically active population concentration is high and the consumers can pay a better price.

Slide 6

The price of fresh milk varies from place to place ranging from Tk.. 8.00 to Tk.. 28.00 per litre. More often than not, transportations over long land and river routes are time-consuming, and, milk having been highly perishable, cannot therefore reach many potential markets from far-flung milksheds.

Farmers depend on the traditional milk vendors or traders to sell the remaining milk available. As such producers receive around 50 to 60 percent of final consumer prices.

Farmers in many parts of the country, due to lack of assured market or an undependable traditional market for milk, would convert the surplus milk into indigenous milk products, such as "chana" or popularly known as sweet curd or casein, "mawa" or dried cream, sweetmeat, yogurt, sour curd (from skimmed milk), ghee, cream, cottage cheese etc.

Slide 7


1. Factors Promoting SSD

High population growth rates (1.8% annually) and breaking up of the traditional family structure into smaller units has changed the traditional subsistence farming system. A large section of smallholder farmers now has emerged in Bangladesh looking for opportunities to maximise their production from land-livestock-labour based production system and barter or monitise to meet their family needs.

Rapid urbanization (15% annually) and increased per capita income US$ 430 has also created domestic demand for high value food items creating market opportunity for indigenous production, particularly milk and milk products. Unfortunately, existing production and rural marketing systems can not respond readily to the rising demand.

Slide 8

Nevertheless, the low production potential of their dairy animals, lack of knowledge of advanced production technology, non-availability of adequate production inputs and services have added to the misery of small holder dairy farmers. The service sector, which is mostly managed and controlled by the government, is often inadequate and sometimes insensitive to farmer needs.

However, braving all such adversities small holder dairy farmers have taken a bold step towards creating their own infrastructure of marketing and production support services through dairy co-operatives. Nation-wide dairy cooperative network of small holding dairy farmers, has emerged as a major contributor to increased milk production in the country.

Slide 9

For small holder dairy farmers, owned and managed cooperative are providing an effective link with urban consumers. Rural institutions thus formed are supporting business transactions on behalf of individual farmers and provide a common forum for transaction of knowledge and information along with the services.

2. Genesis of SSD

Collective efforts to organize milk production and marketing in Bangladesh started first by the establishment of a dairy plant in 1946 at Sirajgonj with the objective of sending milk to Calcutta. After partition, this plant was purchased by a company known as Eastern Milk Products Ltd. (private).

Slide 10

In 1965 the first cooperative formed with government patronage was called Eastern Milk Producers Cooperative Union Ltd. (EMPCUL), which collected milk from some 100 cooperative societies and took over the Eastern Milk Producers Plant.

Another small cooperative dairy plant at Dhaka, ASTO Dairy, run by the National Cooperative Marketing society was taken over by EMPCUL in 1974 and was renamed Bangladesh Milk Producers Cooperative Union Ltd. (BMPCUL) commonly known as Milk Vita in 1977.

UNDP and FAO provided technical assistance in the 1970 and 1980's to strengthen capacity building and its sustainability through intensive technical support services.

Slide 11

This organization adopted the ANAND cooperative pattern of Gujerat, India to be managed by appointed professionals and independent top management by a Board elected by milk producers.

Milk Vita received positive supply response from farmers who began viewing milk production as a potential business. Because it ensured improving their animals through the use of A.I, of improving animal feeding through concentrate use and forage development and created marked outlets.

Milk Vita has expanded rapidly to 904 societies which included 66000 members in 24 districts and increased its production as to around 6.30 million litres in 2003 and has made a net profit (around Tk. 80.0 million US $1.3 million) in each of the last nine years. Average holding of cows is 3 per member (2-26) and average yield per cattle is 8 litres (5-25) a day.

Slide 12

It provides input services to its members from a Cattle Development Fund, resourced by way of a deduction in the milk price; services include animal health care, vaccinations, artificial insemination, fodder planting materials, allocation and arrangements of low lying grazing land (Bathan land), distribution of concentrate feeds and technical and organizational training for society members.

A similar operation started by BRAC under the name Aarong has also increased rapidly from 6.48 million litres in 1997-98 to 15 million litres in 2004. It has around 20000 contact rearers in 20 districts of the country. Average holding size is 2 cows per member and yield per cow is 4 litres/day.

Slide 13

Milk Collection and Marketing by SSD's

Milk is collected from centres located within approximately 100 sqkm area; farmers bring milk from their cows to Milk Collection Centres from where milk is routed to the cooling plants.

Centres receive milk from the farmers according to the minimum quality set by the dairy enterprises; the milk is tested initially, for the quality using the organoleptic test, and sensitivity test (acidity test/sour test).

Mode of transport from centres to dairy plants is mostly by rickshaw, van, boats and engine van (Howaigari). Collected milk is delivered to the dairy plants within 30 minutes to 60 minutes of collection.

Farmers are paid @ Tk. 13-Tk. 16 (US cents 21-26)/litre of milk on the basis of acceptable quality (sp gr. around 28).

Slide 14

It s observed that the fat percentage on the average is 3.5 percent in the morning and 4.5 percent in the evening. Major products are chilled milk which is sold in bulk for transportation to Dhaka for processing and marketing.

The market share of these, and other smaller processors, have increasingly emerged in the last ten years, over 80 percent of the milk are sold in the Dhaka market where Milk Vita has 62.16% contribution and Aarong has 21.48% contribution.

4. The Community Livestock and Dairy Development Project (CLDDP)

Using many of the lessons learned from the earlier FAO/UNDP Milk Vita project, UNDP funded project CLDDP to be implemented by Grameen Motsho and Pashusampad Foundation (GMPF) with technical assistance from FAO which started in late-1999.

Slide 15

The project aimed at reduction of the incidence of poverty, enhancement of development opportunities for women, sustainable increase in family income and improving the household food security and nutrition in the project area basically a fishermen community which developed around 2800 ponds leased in by Grameen Motsho and Pashu Sampad Foundation from Government of Bangladesh in 1994.

The Grameen bank defined functionally landless people as poor people with access to half an acre of land or less, or assets up to the value of one acre of land at local prices. Highlights from the baseline survey of the socioeconomic condition of the primary project beneficiaries (the VGM's) included;

Slide 16

  • Average land holding per household is 0.81 acres, equivalent to 0.16 acres per person;

  • 19% of households have no land at all;

  • daily gross household income is Taka 64, equivalent to Taka 12.8 (22US cents) per person;

  • 79% of VGMs have no regular employment;

  • 58% reported not having sufficient food;

  • Fish or milk are consumed on average 8 days in a month;

  • Average household savings are Taka 211 (US$ 3.70)

  • Less than 10% have livestock, excluding poultry.

Slide 17

The CLDDP focussed on integrating livestock-dairy-poultry development within fisheries and targeted 5850 beneficiaries to be covered within the project period from mid 2000 to the end of 2005; about 40.0 percent (2340) would be females, destitute or widowed women.

The project identified 9 packages for VGM's to practice at their choice, which consists of improved varity milk cows/pregnant heifers, fattening cattle, goats, pigs, fowls, duck, crops (fodder) and bio-digester. Milk cows/pregnant heifers constituted 65.0 percent (5189) of the total packages distributed to the Village Group Members (VGM's) e.g. beneficiaries out of 7901 packages.

Slide 18

A present livestock services to VGMs is delivered through the inherited fisheries network of fish-farm management system which consists of farms, units, centres and village group supported through Community Livestock Centres (CLC), Community Dairy Enterprises (CDE) and Community Feed Mills (CFM).

CDE's and CFM's are managed as partnership enterprises between GMPF and the VGM's and the profits earned by the enterprises are shared on a 70 for VGM's and 30 for GMPF basis.

Farms are headed by a Farm Manager and identified as Joysagar Farm (JF), Dinajpur Farm (DF), and Jamuna Borrowpit Farm (JBF), operate through a network of 22 Farm Units, each headed by a Unit Manager (UMs) and supported by Credit Field Assistant (CFAs), 277 Centres and 1170 Village Groups located within 17 upazilas under 9 north western districts of Bangladesh.

Slide 19

The GMPF village groups and centres provide credit and support services to enable the village group members (VGMs) mostly landless ones to diversity and increase their income from livestock production.

As major outputs of CLDDP are establishment of 9 (nine) milk processing and marketing enterprises known as Community Dairy Enterprises (CDE's) to ensure fair stable price to VGM's and also 3 (three) Community Feed Mills (CFM's) to produce balanced concentrate feeds to be sold to beneficiaries at cost price. Nine Community Livestock Centres (CLC) created under the project have ensured intensive health services to the livestock owned by the VGM's and non-VGM's in the project areas.

Slide 20

Each CLC headed by a CLO and supported by 2-3 Livestock Field Assistants (LFAs)/Veterinary Compounder (VC) are responsible for performing all livestock disease protection and production improvement activities.

The existing Unit Office headed by Unit Managers supported by 3-5 CFAs are responsible for VGM group organizations, training's of VGMs, credit operation and livestock extension activities in addition to their fisheries activities.

Farm Managers are responsible for overall management of all livestock activities including the livestock enterprises in addition to their fisheries enterprises.

Micro credit grant (MCG) is operated by Individual Farm Management for purchase of packages, through centres. Farm management also operates LDF, through centres.

Slide 21

To support livestock services delivery LDF is generated by collecting 2.5 percent of the head value of the procured packages, 25.0 percent of the loan interest paid by VGMs, Tk. 0.3 per litre of milk sold by VGMs, Tk. 5.0 per fortnight deposited by VGMs, bank interest and other deposits.

Around 12970 VGMs (some on several occasions) and 452 services provides have been exposed to skill enhancement and knowledge updating training courses.

Due to above activities VGMs have increased awareness and improved skill in healthcare management of livestock, better feeding, hygienic milking practices.

Their capabilities as regards decision making, problem identification, finding solution and timely seeking support services has also increased.

Slide 22

Demand and practice for fodder production and increased feeding of concentrate has also gained momentum.

About 50.5 percent of the milch cows are always in milk production indicating reasonable turn out and per head per day milk production is around 5 litres.

Most of the milk collected by VGMs are delivered to the CDE's collected through around 30 milk collection centres. Milk is sold in full cream condition either in sachets or in bulk and a small quantity is marketed as flavored milk. Against production cost of Tk. 10/litre VGMs receive Tk. 15/litre from the CDE's.

Slide 23

Since commissioning of CDE's and CFM's in late 2001, these enterprises have made net profits of Tk. 0.6 million (US$ 10000) and Tk. 1.7 million (US$ 28000) respectively till June 2004.

Around 50.0 percent of the VGMs are cultivating improved variety fodder in fallow or leased in lands with an average of 2 decimal per VGM. VGM's consider improved variety fodder cultivation as more remunerative than producing paddy.

Due to adoption of hygienic health care management practices supported by strong veterinary services, mortality of cattle is within acceptable limits. Adult mortality is 4.9 percent and calf mortality is 7.0 percent only. A.I. index by using frozen semen is around 60.0 percent.

Slide 24

Most VGM's retain the calves either bought with the milk cows or born out of the procured pregnant heifers. However around 20.0 percent of the calves mostly male calves within 1 years of age were sold out for emergency cash. Males calves are fattened till 24-months of age to fetch around Tk. 20000/head. Females calve are added to the herd.

About 35.0 percent of the VGMs who received milk cows/pregnant heifers within the initial phase (2000-2001) now posses a herd of 3-4 improved variety cattle. These groups have also diverted on an average Tk. 50000/(US$ 833) for building fixed assets or investing in business.

Except 10.0 percent defaulters (loan recovery rate is 90.0 percent) Monthly income has considerably improved from the average US$ 20 (mostly from fish production) to the average US$ 38.4.

Slide 25

This has consequently improved their feed intake family nutrition and health and are capable of subscribing to the education of their children.

Implementation of CLDDP and introduction of CDE and CFM has engendered enthusiasm among poor farmers to rear improved variety cattle and created opportunities for self employment and to enhance their income.

Till June 2004, 5189 VGM's have participated in CLDDP activities out of the targeted 5850 (89%), of which 1980 (38%) are women. Nevertheless, these women including female members of other VGM's are performing most of the cattle rearing activities such as.

Slide 26

Micro-credit, improved variety cattle package, supported by skill development training's, strong veterinary coverage's and market outlet through the establishment of the CDE and CFM has succeeded in increased entrolment of VGMs till June 2004.

This practice of rearing improved variety cattle has not interfered with farmers existing integrated farming systems, rather had synergistic action on livestock (cattle), fish and crop production.

The CDE has relieved the farmers from the risk of low and fluctuating price of milk.

CLDDP has also helped establishment of 231 bio-digesters which provided healthy cooking about 6-hours a day using two-burner cookers. And at the same time helped VGMs to earn some money through delivery of slurry to the fishponds consequently increasing fish yields.

Slide 27

Empowerment of centres is in transitory phase and around 100 being empowered on decision making of which 25 are women constituted centres. Cleaning the cattle shed, feeding, watering, hygienic milking etc in addition to routine family activities are performed by women. However, the male members are participating by collecting feeds and delivering milk to milk collection centres.

In most families, income from sale of milk is handled by the women, who in consultation with the husbands decides about use of the money. By this process women have established their role in the family about decision making. Some motivated and enlightened women have also succeeded in establishing their leadership role in the locality.

Slide 28

Convinced by the success of CLDDP's improved variety milch cow with calf and pregnant heifer models project formulation mission of Asian Development Bank (ADB) has strongly recommended the above mentioned models for implementation through the Second Participatory Livestock Development Project (PLDP-II) between 2004-2009. The project is set to be implemented in 157 upazilas were 66000 thousand poor farmers of which about 50.0 percent are expected to adopt the above mentioned models.

ADB has also recommended the above models for implementation in its Community Livestock Development Project set to be implemented in Nepal during 2004-2009.

A group of mid level livestock Officers (20) from Royal Nepal Livestock services have already visited CLDDP in June-July 2003 to acquire knowledge on CLDDP activities.

Slide 29

Success of CLDDP has also encouraged DLS/GOB in Bangladesh to extend cross-bred milch cow rearing among rural poor in 371 upazilas under its "Poverty Alleviation Project".

FAO, R Bangladesh has also proposed a project titled "Community Livestock and Dairy Development for Human Security in Chittagong Hill Tracts" to be funded by Japanese Trust Fund for Human Security. The project has strongly recommended replication of CLDDP model specially the ones concerned with Small Scale Dairying.

Slide 30


  • Small scale dairying through co-operatives have ensured fair price to the produced milk.

  • Strengthened the bargaining power of the farmers.

  • Co-operatives have been fairy successful in providing the needed services to village level institutions and farmers.

  • Enhanced skill of a large number of villagers to a high degree of competence for increased productivity from their cows.

  • Enhanced access to micro-credit, ownership to enterprises, for poor landless people including women.

  • Leadership talents have emerged and self-confidence has grown.

  • Improved intake, family nutrition and overall livelihood ad reduced poverty.

  • Empowered women to meet collectively and explicitly make their decisions.

Slide 31


  • Small scale dairying should be encouraged in Bangladesh to reduce poverty, enhance self employment and for family food security.

  • It should be institutionalized through cooperatives or farmers groups/centres and supported by micro-credit, skill development training, strong veterinary coverage and enterprise development for milk marketing.

  • Government should remove subsidy on imported powdered milk and waive off import tax on feed items, medicines/vaccines and equipment's for milk chilling and processing equipment's.

  • CLDDP which has successfully integrated livestock-fish-crop and improved livelihood of poor people including destitute and widowed should be replicated in other parts of Bangladesh and also in other least developed countries.

Slide 32


Draaijer, J. 2002. Milk Producers Groups. Resource Book. FAO, Rome, Italy.

Kurwijila, L.R. Dugdill, B.T. and Bennett, A. 2002. Village Milk System Resource Book, Report-I Sub-programme 213 A 3. Sokoine University of Agricultural, Tanzania, FAO, Rome, Italy.

MOFL, GoB. 2001. Bangladesh Economic Review. Economic Advisers Wing, Finance Division, Ministry of Finance, Dhaka, Bangladesh.

PPSU-MOFL, 2004. Summary of the Livestock Sector Review and Future Development. Policy Planning and Support Unit, Ministry of Fisheries and Livestock, Government of the Peoples Republic of Bangladesh.

Slide 33

PRO-DOC. CLDDP. 1999. Community Livestock and Dairy Development Project BGD/98/009. GMF/UNDP/FAO.

Rahman, M.H. 2003. Village Milk System Resources Book, Field Assessment. Bangladesh FAO.

Rahman, M.H. 2004. End of Assignment Report. Community Livestock and Dairy Development Project. GMPF/UNDP/FAO-BGD/98/009 Bangladesh.

Siddique, L.R. 2003. Livestock Sector Review and Future Development. PPSU-MOFL Dhaka, Bangladesh.

Saleque, M.A. 2004. Personal Communication, Coordinator (Livestock), BRAC. Dhaka.

Barik, M.A. 2004. Personal Communication. Deputy Managing Director, Milk Vita, Dhaka.

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