Dairy stock development and milk production with smallholders = De ontwikkeling van jongvee en melkproduktie met kleine boeren

R. de Jong

Research output: Thesisinternal PhD, WU


My work in technical development cooperation and missions in developing countries, touched often upon worldwide dairy development, and stimulated my interest in comparative analysis of technical and economic progress in the sector. This did not only deal with milk production, but increasingly in the course of time with the development of dairy stock as the basis for enhanced andlor expanded milk production. Dairy production, generally performed on more specialized farms in industrialized countries, is mainly taking place in small-scale mixed farming in most developing countries, apart from milk production in pastoral societies. This inspired me to look into details of the horizontal mix of agriculture, horticulture, trees and livestock species, including off-farm activities of the smallholder family. Coming from a dairy farm in a country where dairy farming developed in a reasonably stable policy environment that was focused on producer prices and investment incentives, 1 was also interested in the organization of the sector in other countries. To what extend was it supported by the triangular network of agricultural education, extension and research? How strong was the vertical column of input supplies, services, production, processing and marketing and was it handled by farmers' organizations themselves? Progress reporting in project work and the push to publish in the academic world brought me to write this thesis on development of dairy stock and milk production with smallholders with the following objectives:
1) to study technical, economic and organizational changes in dairy farming/development, i.e. has the production of milk per cow, ha and person increased and/or has the number of dairy cattle and farmers increased;
2) to consider the options for dairy development with smallholders aimed at more self reliance and less dependence on foreign aid; and
3) to examine whether smallholders can be motivated to rear their calves and heifers on their own farms to generate sufficient stock for replacement and supply to aspirant dairy farmers.

In Chapter 1 , global developments over 1980-1994 indicate that the world population increased at an annual rate of 1.7%, which is lower than the highest rate of 2.1 % recorded in 1965-1970. The number of people involved in agriculture still increased from 2.2 to 2.4 billion, although its proportion decreased from 49.4 to 43.4% of the world population. Land use increased annually with 0.13% in arable lands, 0.31 % in permanent pasture against a loss of 0.22% in forest/woodlands and 0.01 % for other land (towns, roads, barren lands). From 1980-1994 total food production increased with 30.3%, crop production with 29.6 and livestock production with 26.6%, compared to a population increase of 27%. Per capita, the availability of food increased with 0.31 % and of livestock products with 0.21 % per year. Surplus production of milk over effective demand characterizes the industrialized countries, while unsatisfied demand and limited foreign exchange is typical for developing countries.

Dairy development in the Netherlands from 1930-1993/4 showed that annual milk yields increased from 3,250 to 6,970 kg per cow and concentrate use from 400 to 2,200 kg per cow. Fertilizer application reached 315 kg N per ha in 1984, a year before the introduction of milk quota, and decreased to 280 kg per ha in 1993/4. Annual labour input per cow in dairy farming declined from 340 in 1940 to 40 hours in the 1990s. Average milk production per ha increased to 10,085 kg in 1984 and per farm to 266,500 kg in 1993/4, while the number of dairy farms decreased from 185,000 in 1960 to 40,500 in 1993/4. Economically, dairy farm results are negative as milk and stock incomes do not fully compensate total calculated costs of land rent, capital and farm family labour. Farmers remaining in the sector manage to survive through low expenses for family consumption, and the use of savings and depreciation to invest in their farms. Large variation exists in performance among regions, farming styles within a region, but even more as a result of differences in individual farm family conditions and management.

The contribution of the dairy sector in 1992 to the agricultural GNP in the Netherlands, Germany, France and Denmark was around 25%, compared to about 10% in New Zealand, Australia and the USA. Of these countries, the Netherlands, with the smallest farm size, has the highest milk yield per cow, per ha forage and per manday. New Zealand has the highest stocking rate of 2.3 cows per ha forage with the lowest feed and fixed costs (low costs of land, housing and forage management) and the lowest producer milk price. In the USA, dairy farming varies considerably per region, with family farms in the North Central and North East and large commercial farms in the West and South West. Large shifts occurred from dairy to beef production using young grass-fed dairy and beef animals for fattening in feedlots. Special milk prices for consumption milk are in use such as the Dutch winter milk price, the town milk price in Oceania, and the premium in the USA that increases with the distance from Wisconsin.

Dairy production in (sub)tropical areas showed a very wide variation in milk yields, from an off- take of a few hundred litres per cow per year in indigenous cattle herds up to 6-9,000 kg per cow on imported commercial dairy complexes in oil countries (Saudi Arabia, Libya). Technical and economic characteristics of dairy farming systems in developing countries, varying from extensive pasture grazing of local stock to zero grazing with grade cattle, were illustrated for South America, Kenya, Sri Lanka and Colombia in the early eighties. Milk production per cow (170-3,500 kg/year), per ha (200-11,000 kg) and per manday (2-132 kg) varied considerably as did gross margins in US$ per manday (0.35-66), per ha of forage (50-1200) and per US$ 1,000 investment (45-1,150).

In Chapter 2 characteristics of dairy production systems were differentiated in subsistence- commercial type of production, seasonality of production and non-productive periods (dry period, calf rearing and heifer raising), and related to the role of supply and demand locally and in the world market with the respective producer prices for milk and dairy stock. Milk production characteristics, i.e. age at first calving, lactation length and yield, and calving interval were reviewed for buffaloes and cattle in the tropics. Age at first calving is much higher than the 24-30 months of cattle in temperate areas, e.g. for milk buffaloes (38-47 months), nondescript buffaloes (up to 57 months), Indian dairy breeds (40-58 months), nondescript cattle (up to 54 months), crossbreeds (30-46 months) and exotic dairy cattle (27-36 months). Calving intervals, varying from 381-638 days are much longer than the recommended 365 days, in combination with the high age at first calving, limit the annual number of calves produced in, a herd. Calf mortalities in the tropics of 20-45% are much higher than the 7-16% found in temperate areas. Major causes are high disease incidences, low feeding levels and low prices of calves for meat or future stock. Competition with men in milk use like payment of stockmen in milk, family milk consumption in pastoral societies and milk sales for income may limit the use of milk during calf rearing. This, together with lack of supplementary feeding before and especially after weaning results in slow growth and makes calves more vulnerable to diseases. Low values for young stock are associated with low meat prices for cattle in Hindu and Buddhist society and low world market prices. The value of male animals for draught may provoke a more intense rearing and raising. Price controls of government to supply breeding stock cheaply may further result in little interest in raising of young stock.

In contrast, calves in the Netherlands have a ready market at remunerative prices, with males going for specialized white, pink and red meat production, and female calves being reared for replacement, export or meat production as well. Attention to calf rearing in research and extension, large scale introduction of more Holstein Friesian blood, more milk feeding to calves after introduction of the milk quota, stimulated improved calf rearing and heifer raising that resulted in high liveweights of 420-550 kg and early ages at first calving, and more milk. In the tropics, birthweights and growth rates of cattle are lower leading to liveweights at first calving of 200-300 kg in local breeds, 300-400 kg in crossbreeds and 350-450 kg of exotic breeds, especially at lower latitude and altitude.

Lifetime production of milk and calves is intensive but short in the Netherlands. Cows produce on average three lactations and are culled at about five years. In the tropics lifetime i's much longer, but total number of calves ranges between 3-5, with some up to 6-10 in village herds in India and Nepal, that hardly practice culling or slaughtering. With a requirement of about three calves to replace the dam by an in-calf heifer in the tropics, little scope exists for selection in the offspring, and genetic improvements have to come through selection in the male line.

After the successful introduction of exotic dairy cattle in the tropics in the early twentieth century by European settlers, army men and missionaries, many developing countries after independence in the 1940s to 1960s imported dairy cattle in attempts to satisfy quickly the increasing urban demand for milk. Severe intolerance to tropical heat and humidity and susceptibility to vector-borne diseases resulted in deaths, abortions and low production of milk and stock, especially at smallholder level. At (para)statal farms, introduction and comparison of exotic breeds under better feed and health management continued, and some countries changed to crossbreeding towards synthetic breeds with more or less fixed characteristics such as the Jamaica Hope, Siboney in Cuba, Chinese Black and White, Sunandini, Karan Swiss and Karan Fries in India, Friesian Sahiwal and Australian Milking Zebu in Australia.

A number of countries started large-scale, donor-supported AI schemes at farm level in the 1960s with successes in Kerala after long-term support by Swiss Technical Cooperation, and in Kenya with support from Sweden. In other countries, e.g. Ethiopia and Tanzania, crossbreeding was done in parastatal farms using exotic semen and bulls on ranch cattle (Boran, Small East African Zebu) to produce F1s for smallholders. Imports of dairy cattle continued in the Middle East/North Africa, utilizing oil money and private capital to achieve self-sufficiency in milk through investment in large dairy complexes, with imported housing facilities, machinery, feeds and even foreign management, except in Tunisia where local management was trained. Large numbers of exotic dairy cattle have been imported in Indonesia, mainly for smallholders supported by cheap long-term credit, but milk production is far below their genetic potential and internal generation of stock is very limited.

In Chapter 3, experiences from lending agencies and international organizations with dairy development as well as those presented at international workshops and seminars were reviewed, and also taking account of changing approaches to rural development. Main factors determining success or failure in livestock development identified by the banks, were adequacy of producer incentives and supporting services, appropriateness of technologies used and the planning and implementation capacity of responsible institutions. Failures were attributed to wrong economic policies, e.g. overvalued exchange rates favouring imported products and technology, price controls protecting the politically more active and clamorous consumers, and weak parastatal management of milk processing and marketing. Promising developments were noted in (peri)urban dairy farming in West and East Africa, in smallholder schemes with local sales of milk, and in Indian dairy projects that developed an effective multi-tier cooperative system with a broad range of services to millions of farmers and collecting, processing and marketing of millions of litres daily. Appropriate technologies emphasized matching breeds with climatic conditions and feed resources, manual operations to benefit from the use of cheap family/rural labour and commercial dairy production only, if price ratios of milk/concentrate exceed 1.5. institutional issues associated with successes included projects suggested by beneficiaries and motivated by their needs, and planned per commodity and area by the country itself prior to project assistance. Success in implementation required experienced staff motivated by institutionalized incentives, and farmers that were trained and organized by strong and motivated managers. Other essentials included adequate feed resources, effective animal health services and well-organized collection, processing and marketing facilities, absence of market distortion from imports, and opportune credit to facilitate remunerative production.

The Food and Agriculture Organization (FAO) shifted its focus from technical support in milk processing plants of urban milk conservation schemes (1950s and 1960s), to training programmes by regional dairy development training teams (RDDTT, supported by DANIDA from 1960-1990) and technical missions under the international scheme for coordination of dairy development (ISCDD, supported by FINNIDA from 1972-1990), that in most cases were followed up by WFP assistance. After a dairy expert conference in 1984, FAO opted for a modular approach in four regional model projects for integrated dairy development, supporting milk production, processing and marketing of milk at smallholder level, with satisfactory experiences sofar in Tanzania and Ecuador. FAO further supports introduction of molasses- urea-multinutrient blocks to improve local dairy feed supplies and village level processing of indigenous dairy products.

The World Food Programme supports, through monetization of dairy food aid, development of the dairy industry only as a viable economic activity. Fluid milk at lower prices can be brought within reach of a larger public by cross-subsidizing pasteurized milk from higher margins on other dairy products. The emphasis is on supporting smallholders to stimulate economic growth and reduce poverty in rural areas through labour-intensive milk production that contributes to income and employment generation. Dairy development through food aid, further requires an effective package of technical and management assistance, support in dairy policy analysis and support with foreign exchange from other sources, if local currencies are not convertible.

The international seminar in Anand, India (1989) noted in Asia promising increases in milk production through strengthening of producer cooperatives in India, Thailand and Indonesia, through high producer milk prices in Japan, Taiwan, South Korea, and on state and private farms in China. In Africa, large regional differences existed in availability of local milk and imports. Most organizations involved in dairy development were closely linked to the state, with low local milk intakes by the parastatal dairy industry in view of higher dealers' prices for rural milk. In South America, regional differences in milk availability were also striking, with promising dairy development approaches in rural cheese plants (Peru, Ecuador), dairy development modules of producers in Bolivia, and the model integrated dairy development project in Ecuador.

The dairy congress in Wageningen, the Netherlands (1991 ) illustrated the large variations in milk consumption due to different degrees of malabsorption of lactose and income levels with a typical threshold income of 500 US$ per capita before consumption of livestock products starts to increase rapidly. Also, the variation over time in protection rates in developed countries was given in relation to the milk producer price, as well as the trends in milk production increases in Western countries at 1-1.5% per year compared to 4% in developing countries.

The international workshop in Wageningen, the Netherlands (1992) for policy makers of livestock development involved in rural development, emphasized the multifunctional role of livestock and the needs for stimulating local production for food security, employment, income generation and equity. It was recommended to reverse the urban bias in adjusting price, trade, credit, land use and tenure policies to support the producer. Technically, development of the feed situation and feeding regimes for pastoral, mixed, intensive and ranching systems was the main prerequisite for improved local livestock production.

Dairy development in the Caribbean region, discussed in Jamaica (1992), focused on the high bill of imports for livestock products and feeds for livestock, which could be reversed by changing economic policies in favour of employment and income from local small-scale dairy farming, making use of local crop- byproducts and underutilised grazing resources.

The international seminar in Harare, Zimbabwe (1993) on dairy development policy and implementation and sharing of experiences between Africa and Asia, recommended the formulation of clear, long-term dairy development policies, minimizing direct government involvement, stimulating more technical cooperation among developing countries, and creating regional networks of relevant training institutions. It was concluded that technology development was required for fresh milk preservation, processing, cheaper packaging and marketing. Project implementation was recommended through a modular approach with emphasis on development of strong support services, bull-oriented breeding, and training aiming at improved productivity of smallholder dairying and intensified fodder and crop residue utilization. Linkages of rural producers with urban consumers should be developed with full participation of farmers organizations.

Over time, approaches to rural development shifted from increased agricultural production and area expansion, through large-scale farming operations to produce enough food locally and also for export, to more attention to food crops and small-scale farming with modern input technology (green revolution). Community development, to improve the wellbeing of rural people, supported local institutional development, and incorporated later more attention to power relations (land distribution) and socioeconomic inequalities in rural societies (poverty alleviation) in integrated rural development projects. Subsequently, also environmental aspects and the position of women were added to development projects that focused on specific areas (districts and watersheds). The area approach, embedded in local horizontal structures, often conflicts with dairy development programmes that are organized vertically by the Ministry of Agriculture.

Bank and donor financing for large dairy farm development has been reduced over time in view of low or negative farm profitability, when looking at comparative advantages with subsidized world market milk, and/or low price ratios for milklconcentrates resulting from government set producer milk prices and encouragement of feed export. Support of a dairy component within small-scale farming, based on family or low cost rural labour, use of improved local feed for feeding a crossbred cow and milk sales directly to the consumer appeared the best option to develop local milk production.

Experiences of Netherlands development cooperation in dairy development in Africa (Kenya, Tanzania) and Asia (Sri Lanka, India and Indonesia) were reviewed in Chapter 4 and those in South America in Chapters 5 and 6. Lessons derived from early experiences in support of livestock development were formulated by the Operation review unit in 1987, and used as a basis for formulation of new policy guidelines, published in 1992.

Neither the supply of Dutch cattle in the seventies nor support to large-scale dairy farming were successes. Matching exotic cattle to local feed and management environments, especially in hot and humid conditions appeared problematic. Mechanized large-scale dairy farming could not be maintained through lack of foreign exchange for spares and replacements. Attention to small-scale farming in the 1 970s and 1980s required pilot phases or projects to prove that improved feeding of local Friesian cattle (South America) and zero grazing of improved cows (Africa and Asia) was a feasible and profitable practice for small-scale farmers. Most programmes consisted of essential combinations of training, applied research, extension and veterinary services with access to cattle resources as a prerequisite for increasing the number of participating farmers and/or a processing component. Monitoring of technical and economic parameters was included in most projects after some time to streamline data collection, processing and progress reporting, and to focus the project on solutions for identified constraints.

The Pasto project, Colombia included in its second phase (1978-1984) horizontal integration of dairy cattle with crops, horticulture, trees and other livestock species (Chapter 5). The large variety in smallholder resources of land, labour, crops and livestock species required a variety of technological packages with adoptions rates, depending much on family conditions and price developments. Cash crops with low labour inputs were easily taken over by large farms which blocked the market for smallholders. Labour and/or management intensive cash crops as stem onion, garlic and fruits were more appropriate for smallholders. Guinea pigs, kept by women, require a fairly constant management of feeds and feeding that was difficult to realize with labour in large farms, and proved an attractive income earner through a high price per kg, compared to other small stock species (pigs, poultry, rabbits). Supervised credit with the farm as collateral was only taken up to the extent that it could be repaid from guaranteed yields and prices in the poorest season or, in the case of dairy, from young stock sales from calves born to borrowed and existing cows. Improved grassland was established in a two-year rotation with potatoes to benefit from cross-fertilization of P on potatoes and N on grass, similar to potato/onion rotations in combination with lucerne in Peru.

Vertical integration of milk production, processing and marketing, reviewed in Chapter 6 refers to support to the cooperative dairy industry in Nariño, Colombia and the prospects of vertical integration in the model integrated dairy development project in Cañar, Ecuador. Major constraints at macro-level were imports of cheap (dumped) milk powder by the government or its agent and government influence on milk prices, and at micro-level poor liquidity, weak management and organization of starting groups/cooperatives. Grass-based milk production is very seasonal and requires processing of the surplus into products with an extended-shelf-life such as milk powder that can be used to balance shortages in the lean season and/or into products with added value, such as cheese for the more affluent sector in society. Poorly timed imports of milk powder may induce "milk holidays" (no intake of milk), and controlled flat-level producer milk prices don't stimulate milk production in the lean season. Small farmers with surplus milk for sale without having their own organized collection/cooling centres are easily manipulated by the milk collector whose interest it is to serve its customers, either the consumer or the receiving milk industry at low prices with enough margins for himself. Even if donor support for collection/cooling and/or processing equipment is provided, it takes time and a lot of technical/organizational support to attract suitable management, develop appropriate processing technology and market strategies, and especially to organize operating funds, install milk quality and quantity rules to arrive at a successful group effort. The step-by-step approach, committing both the group and the donor/banks into small expansions of the COOPROLACTEOS project, proved worthwhile, and resulted slowly in a full-fledged, strong dairy farmers cooperative, that set the milk price in the area, based on profitable, high quality, hygienic cheese production.

A similar step-by-step philosophy is applied in the model integrated dairy development project in Cañar, Ecuador through rural milk collection/cooling centres/cheese plants provided in trust to individual communities that still need to grow from experience gained into a larger organization to negotiate or acquire through processing and marketing a more remunerative producer milk price.

In smallholder dairy development projects, improved cows were generally in short supply (except in South America). Introduction of improvements in dairy farming would generally start off with better-off people that could afford the risk of investment in improved cattle, housing and feed. To encourage also poorer farmers, favourable financial schemes were used. A low-interest project revolving fund, followed by special smallholder credit (for farmers with < 10 ha and>70% of income from farming) was applied in Colombia. In Ecuador, farmers are encouraged to establish improved pasture through a cash crop sharing arrangement with the project. The grant scheme in Kenya subsidized investments in zero grazing dependant on farm income, milk price and once or twice milk collection. An interest-free single cattle loan assisted poor settlers on abandoned, marginal tea land to start crop-livestock farming. Heifer-in-trust schemes applied by Heifer Project International (HPI) in various countries to improve the lives of poor people, are applied by dairy development projects in Tanzania to encourage poor rural families and women to start zero grazing. Improved feed production and feeding management for smallholder dairying focused on Napier grass (Kenya), Guatemala grass (Kagera, Tanga), Guinea grass, Gliricidia and rice straw (Sri Lanka), followed by inclusions of legumes, fodder trees and treatment of roughages. Exchange visits among projects in different geographical regions, often disliked by donors but highly appreciated by professionals, resulted in cultivation of a wider range of forages to produce a more complete roughage diet over the year.

In Chapter 7 the performance over 1985-1992 of integrated crop-livestock systems on small demonstration-curn-training farms at the Mid Country Livestock Development Centre (MLDC) in Sri Lanka was analyzed. Poor abandoned, barren land was used to rebuild the "Kandyan forest garden system" on 0.2, 0.4 and 0.8 ha, typical sizes of holdings of Mid Country smallholders. Crops were widely spaced to allow intercropping with grass and were surrounded with live fences for fodder production to accommodate 1, 2 and 3 cow-units aiming at milk income, manure for biogas and slurry for soil fertility. Each unit was operated by a selected MLDC employee and his family using his salary to operate the unit. He was entitled to the farm income after deductions for land rent, capital and marketing costs. Design and supervision was the responsibility of MLDC staff as well as monitoring of all technical and economic data for all crops (vegetables, bananas, pepper, coffee, coconut and fruit trees) and livestock (local dairy cows, goats, commercial layers and broilers). Dairying and goats proved attractive cash earners with a high labour productivity, while manure for biogas to replace domestic fuel and slurry to improve soil fertility were important benefits, however with a high capital requirement. Commercial poultry did not improve farm income overall, due to fluctuating prices over the years. Within crops the yields and financial contribution of vegetables and bananas declined, particularly after 4 years, which stressed the need for rotation including pasture plots or to step up compost making from grass refusals and crop wastes for incorporation in the crop areas. Crop production per m' was highest in the 0.2 ha unit with the highest concentration of livestock units per ha. Comparing actual performance with the predicted one in the feasibility study showed that, especially actual labour days were higher and return to capital lower than estimated and even below prevailing interest rates. A more gradual investment in smallholder farms in phases of annual cash crops, medium-term crops, long-term tree crops and livestock seemed more appropriate and is also more in line with the smallholder's way of farm improvement by taking small steps and avoiding high risks.

In Chapter 8 the financial, technical and economic performance of dairy farming introduced on abandoned, marginal tea lands was analyzed on the basis of a survey in 1993 of 76 settler farms (and 19 neighbouring control farms), that received an interest-free single cattle loan between 1984 and 1990, to stimulate crop-livestock farming for gainful self employment. Project loan repayments, recoverable from 36 fixed monthly deductions of the milk pay cheque were satisfactory, but with on average 2.95 lactations per project animal, balance payment had also to come from milk of the offspring or from off-farm income. Dairy cattle were still present on 93% of the project farms with 77% selling milk. Average home consumption was 0.6 l/d for a family of 5.32 persons. Milk production proved attractive for farm gross margins of both project (66%) and control (81 %) farmers and contributed significantly to family gross margins by 32 and 46%, respectively. Land improvement by livestock was mentioned as a benefit by 64% of the farmers. Crops contributed mainly to subsistence and only marginally to income (vegetables and perennials). In addition, farmers still depended on off-farm income and government food support to meet their family needs.

In Chapter 9, performance and progress of dairy stock development in Sri Lanka was analyzed in both the (para)statal and the smallholder sector. Multiplication of breeding stock (pure and crossbreeds) on (para)statal farms amounted to 10% female stock per cow in cattle and 8.5 % in buffaloes (1981 - 1993) as breeding issues to others. In comparison, heifer breeding units in the Kagera and Tanga regions of Tanzania produced on average between 200-250 in-calf F 1 heifers from on average 2,000 breeding cows. The output of 10-12.5% F1 animals per cow in Tanzania, however, could only be maintained with additional purchases of about 100 Boran heifers (5% of breeding cows) per year to maintain the original Boran cow herd.

Calf salvaging operations at two parastatal farms to rear otherwise neglected smallholder calves proved difficult in acquiring large numbers of good quality, transferring them successfully from suckling to artificial rearing and raising them properly on low feed inputs. The output averaged 100 and 131 in calf- heifers per year (1980-1988). In contrast, the MIDCOMUL scheme created an additional stock of 164 milk producing animals per 390 cows on smallholder farms over a period of 33.9 months. On an annual basis this meant 15 % per cow, which was much higher than breeding issues from parastatal farms of Sri Lanka and cross-breeding ranches of Tanzania.

Seven calf rearing schemes at smallholder level in Sri Lanka were studied that applied incentives in the form of (i) a calf health care package (CHCS), (ii) price support in contract heifer breeding and raising for sale to others (CHBRS), (iii) 50% subsidy on calf feeds supplied at the farm (Kerala), (iv) material for calf housing, deworming and minerals (PPRG), (v) gifts after winning in calf competitions of Dairy Producers Associations, and (vi) bonus payments upon chest girth targets met up to 10 months (Matale) or (vii) until calving (MIDCOMUL). Calf mortalities were low between 2-8%, improved growth rates around 300 g/d were achieved as well as low ages at first calving around 30 months compared to 36-48 months in other smallholder and parastatal farms. Most control calves had in fact disappeared from the farms and could not be traced any more in the area by the age of 6 months. Not all project farmers were successful in good calf rearing. Large differences in growth rate were found in the field between the worst 25% (growth rates below 200 g/d) and the best 25% (300 g/d and above) performers. Growth rates were considerably lower in the second year without sufficient incentives such as only health kits in the CHCS and none in the Matale scheme. Schemes should therefore cover the whole rearing period up to calving to obtain well-grown heifers that calve at an early age.

In the MIDCOMUL bonus until calving scheme, 164 first calvers with complete records on quarterly chest girth measurements, age at first calving, breed type (Friesian, Ayrshire or small crossbreed with Jersey/Australian Milking Zebu), farm location (estate-Tamil managed or village-Singhalese managed) and calf rearing history (months of one teat suckling, months of suckling before and after milking, concentrates fed at one year and at two years old) could be compared with their dams in chest girth, peak milk yield and peak concentrate level during a farm visit. First calvers, inspected at the average age of 33.9 months, had reached already 95.5% of the dam's chest girth (well above the standard of 87% in the Netherlands), 75.4% of the dam's best peak milk yield (close to the standard 79%) at 94.1 % of the dam's peak concentrate level.

Step-wise regression showed that a lower than average age at first calving of 29.1 months was statistically significantly associated with a longer than average period of one teat suckling (2.45 months) and total suckling period (4.86 months). In 39 non-project first calvers, the age at first calving of 35.5 months was also statistically significantly lower at a higher than average period of one teat suckling (2.35 months) and higher at a more than average number of livestock units kept (2.89 TLU).

Similarly, average chest girth of young project cows (153.5 cm, i.e. about 286 kg) at inspection after calving (at the average age of 33.9 months) was positively associated with a more than average chest girth of the dam (160.7 cm), concentrate level fed at 1 year of age (0.67 kg/d) and peak milk yield of the young cow (7.72 kg/d), and negatively with more than the average number of dry months on the farm (4.12 months) and the concentrate level fed at two years of age (1.18 kg/d). The chest girth of non-project young cows was only positively associated with a higher than average peak milk yield of the young cow.

Step-wise regression of average peak milk yield (7.72 kg/d) of young project cows showed statistically significantly associations, positively with the dam's peak milk yield, concentrate level fed at the young cow's milk peak and age at first calving, and negatively with concentrate level fed at the dam's milk peak.

The importance of these incentives is that (i) enough milk during the rearing period in smallholder farms contributes to reducing the age at first calving, (ii) supplementary feeding up to one year of age, especially to correct for dry months and high stocking rates stimulates chest girth development, that subsequently allows for higher peak milk yields and possibly higher first lactation milk yields. Differences among breed types in age at first calving of project animals were very small and much smaller than in control animals that showed the expected pattern of lowest ages at first calving for Friesians, followed by Ayrshire and Jersey/AMZ, and lower ages in estates with Tamil managed cattle than in villages with Singhalese managed cattle. Chest girth measurements and peak milk yields did show superiority for breed and location that were statistically significant associated with the dam's girth size and peak milk level of the dam. The average ratio of produced milklconcentrates fed at peak level was 3.46 with little or no differences among breed types and locations.

Comparison of the various calf rearing schemes further brought to light that schemes operating from the veterinary ranges/units such as CHCS, CHBRS and Kerala registered about 300-600 calves per year in various regions in Sri Lanka, while the MIDCOMUL scheme could register 1,850 calves in 6 months time in its associated dairy producers' associations (DPA) in the Mid Country. Awareness through mobile MLDC training offered at milk collection points, inclusion of both calves from A] and natural service, and establishment of calf rearing committees in the participating DPAs encouraged a high farmer's participation.

The MIDCOMUL target growth scheme also proved that many farmers in measuring their own calves along a growth chart, with quarterly checks of the Union's field officers and a bonus upon targets reached, were quite keen to raise their own young stock on their own farms. Many indicated during the field inspection that they adjusted their management by allocating more milk or supplement to the calf to reach the target. Even heifers that had not qualified for all bonus payments, were still kept or had been sold when pregnant.

Measurements of calves from project young cows showed average growth rates of 245 g/d up to 4.5 months old in 184 female calves and 228 g/d up to 4.7 months old in 121 male calves. This was lower than under the bonus system with an average growth of 334 g/d up to . 3 months and 320 g/d from birth up to 19 months of age, suggesting positive impact of the
incentives under the MIDCOMUL target growth scheme.

The average daily peak milk yield in the first lactation of 7.7 kg for 164 MIDCOMUL scheme young cows was also higher than the 6.4 kg of 66 young cows (mainly Friesian and Ayrshire crossbreeds) from salvaging farms, and the 6.2 kg of 9 young cows (Jersey/AMZ crossbreeds) in the Matale target growth scheme.

In terms of costs, the incentives under the calf rearing schemes amounted to US$ 100 per sold contract heifer, US$ 100 per reported calving in the MIDCOMUL scheme and US$ 170 per participating A] heifer calf up to calving in the Kerala scheme. These incentives compared favourably with the required subsidy of US$ 140-280 per breeding issue from 33 (para)statal farms and US$ 100-150 from two salvaging (para)statal farms, and more so if compared to imported Friesians from Australia at US$ 2,000 each. Compared to on-farm schemes (MIDCOMUL, KERALA), other breeding stock is usually sold when 3 months pregnant requiring another 6 months upkeep (costing about US$ 20 per month in parastatals in 1993).

Other forms of generation of dairy stock were analyzed in the Kagera Livestock Development Programme, Tanzania. After correction for annual inputs of pregnant crossbred heifers from Kikurula heifer breeding unit, the growing productive dairy population (cows and mated heifers) of smallholders showed an internal generation of 17 heifers per year or 1 . 14% of 6 total average stock from 1983-1989 when heifer prices were kept low up to 90 heifers per year (1.71 %) in 1989-1995 when commercial heifer prices prevailed and incentives to deliver surplus breeding stock to the project were introduced.

In Chapter 10 dairy development achievements in selected countries and projects supported by the Dutch, WFP, the Swiss and FAO/UNDP/private sector were reviewed.

From 1980-1993 milk yields per cow increased and dairy cattle numbers and farms decreased in Europe and North America. In Africa, local milk availability per capita declined with the exception of Kenya and Tunisia, where it increased through increased dairy cattle numbers and milk yields, respectively. In Asia, local milk availability increased in many countries through imports of cattle (Thailand, Indonesia, South Korea, Saudi Arabia), higher numbers of local dairy cattle (Pakistan, China) and/or improved yields (Israel, South Korea, Indonesia, India). In Latin America, milk per capita increased through higher yields (Argentina, Ecuador, Costa Rica), dairy cattle numbers (Colombia, Bolivia, Guyana) or both (Chili, Uruguay, Brazil) with lower local milk availability per capita in major milk importing countries (Mexico, Cuba, Nicaragua, Peru and the Dominican Republic).

Smallholder dairy development projects in Kenya, Tanzania, SriLanka, Indonesia, Colombia and Ecuador recorded improved milk yields over time, a high percentage of cows in milk, reduced adult mortality and especially calf mortalities. Calving intervals were long in all projects, pointing to problems in early lactation nutrition and consequently delays in ovarian activity. Poor heat detection, difficulty in timely arrangements for mating and little follow up in the form of pregnancy tests, as well as farmers' fear for reduced milk yields after breeding all contributed to long intervals. Farm cash income or gross margins varied considerably among countries and farming systems with a contribution from dairying ranging from 29-94%. Major factors that influenced the share of dairying were profitability of crops (higher close to the urban market), producer milk prices (higher in local sales than at collection centres in Kenya, higher in urban than in distant rural areas in Kagera and Tanga regions in Tanzania), and the importance of off-farm income (higher through migration in Ecuador) and farm size (higher in larger units, e.g. demonstration farms in Sri Lanka, and ecological zones in Ecuador). Real dairy income improved in Kenya (1983-1987) through regular and effective milk price reviews, decreased in Kagera, Tanzania (1992-1994) because costs of inputs increased faster than returns from milk, and deteriorated in Sri Lanka (1983-1990) where milk prices lagged behind cost increases and inflation.

World Food Programme supported dairy development projects, formulated generally as a follow-up of missions under the International Scheme for Coordination in Dairy Development, in some countries (Bolivia, India, Tanzania) required more time to be implemented than originally envisaged. In others with high priority and large, additional funding of national governments (Cuba, China), the targets of development were met. Periodic applications of the FAO formula, i.e. price setting of the donated milk products to avoid competition with locally produced milk, were delayed in most countries, to facilitate the financing capacity of the dairy plant and/or to delay the politically sensitive adjustment of consumer prices.

Stimulating dairy development in rural areas has basically two options: either along lines of Operation Flood, i.e. an extended network of collection, cooling centres and feeder-balancer dairies to supply the urban milk plants oriented to the majority of milk consumers and purchasing power. Or, very locally, through-small-scale milk processing into marketable products with longer shelf lives and higher margins that allow long distance transport and distribution to more prospective buyers. Swiss technical cooperation supported a number of rural cheese production projects that provided a remunerative outlet for rural milk. The Netherlands has supported cheese making in parastatal farms (Tanzania and Sri Lanka) and at cooperative level (Colombia) to produce a value-added product or to extend the shelf life of surplus milk. FAO, through its regional training programmes has trained large numbers of technicians, but the biggest challenge remains in organization of quality control of raw milk and cheap packaging and marketing of processed milk.

Organization of inputs, services, training and extension, aimed at small-scale dairy farmers is generally costly in terms of salaries and transport. Moreover, it requires personnel with sufficient knowledge and experience in the complex sector of the dairy industry. Transfer of these inputs and services to the producers on a cost recovery basis has been initiated in various dairy development projects. Most successful attempts were observed in the area of inputs by producer cooperatives (COOPROLACTEOS in Nariño, Colombia and FEDEGARE in the Dominican Republic, the Federation, Union and Village Dairy Cooperatives in India, Dairy Cooperatives in Indonesia and Sri Lanka and a number of producer associations in the Tanga and Kagera regions in Tanzania). Most of the technical services are still being financed by the Government, although larger cooperatives increasingly recruit technicians for AI, first aid and sometimes veterinarians and agronomists in addition to administrative and commercial staff. Smaller ones still require technical, economic and organizational support to benefit from economies of scale.

Under the structural adjustment programmes, most governments are forced to integrate crops and livestock in training and extension into general agriculture to attend to the mixed farming community. Attention to dairy matters is increasingly transferred from local teams towards sector specialists at district and regional level, and calls for more field training of general extensionists to attend to dairy matters in rural areas.

In Chapter 11, global developments in population and agriculture are discussed with special attention to worldwide developments in milk production, processing, trade and food aid, and nutritional and gender aspects of dairy development. Further, technical, economic and organizational matters in dairy development are linked with effective government and donor support in price policies, subsidies and other incentives for producers, poverty alleviation programmes and possibilities for dairy stock development by smallholders.

World production of milk, amounting to 364 million tons in 1962, increased to 463 in 1980 (at 1.5% per year) and to 526 in 1993 (at 1.3% per year). Imports of milk products by developing countries increased from 3.5 million tons of milk equivalents in 1962 to 17 million in 1992.

The share of Africa, Asia, Central America and South America with 59% of the world land area, increased from 1980 to 1993 in world population (from 77 to 80%), cattle numbers (from 66.5 to 71.7%), dairy cow numbers (from 50 to 59%), and in total milk from cows, buffaloes, sheep and goats (from 26 to 35.5%).

Annual milk production increased from 1980 to 1993 through more animals and higher yields in buffaloes (1.53 and 2.65%), followed by sheep and goats (0.74 and 0.89%) and dairy cows (0.45 and 0.25%). Regionally, Asia showed the highest annual increase in production of milk from cows (4.62%), buffaloes (4.30%) and sheep and goats (2.92%), followed for cow milk by South America (2.88%), Oceania (2.07%), Africa (2,02%), and North America (1.29%), and reductions in milk production in the former USSR (0.35%), Central America (0.35%) and Europe (0.71 W. Local milk availability per capita increased in Asia from 27 to 37 kg, in South America from 101 to 112 kg, but decreased from 34 to 28 kg in Africa and from 90 to 63 kg in Central America.

Chronic undernutrition in 93 developing countries decreased from 941 million in 1970 (36% of the population) via 843 million in 1980 (26%) to 781 million (20%) in 1989 and is projected to decrease to 637 million in 2010 (11 W. Insights in human nutrition changed from emphasis on the "protein gap" to "energy density" in feeding vulnerable groups, i.e. children, pregnant and nursing mothers, sick and elderly people. Food aid and also dairy aid was provided in the 1950s and 1960s from surplus to deficit countries by the USA (under Public Law PL480) and the World Food Programme to reduce hunger in the world, but quantities were reduced sharply in the late 1980s in view of reduced surpluses through the introduction of milk quota, and the negative effects of food aid on local production.

Gender issues appeared in development policy, and were increasingly incorporated in dairy development projects. Consultancy missions were often followed by training to sensitize project staff towards attendance for the whole farm family. Incorporation of more female staff to improve access of women to training, extension and opportunities in dairy farming was stimulated, but in practice it was difficult to recruit and maintain qualified female personnel to work in rural areas. Local mobile training with well-timed programmes of short training sessions would encourage attendance by women.

In developing countries, demand for milk is still increasing through urbanization and rising urban incomes, together with more propaganda for milk and a large variety of milk products.

Detailed analysis of development of milk production and dairy stock was complicated by paucity of baseline data in projects, because it requires time to get smallholder's confidence to provide the correct information on land use (several plots and utilization patterns), livestock (various species and sharing arrangements), labour (many activities) and income (many sources). Record keeping requires introduction and intensive follow-up, timely calculation of parameters and informative feedback to make it a useful management tool for smallholders and extensionists. Milk production fluctuates in the course of the year and among years and production of dairy stock is a long-term affair. Technical and economic monitoring is therefore very labour-intensive, while counterpart personnel for this work is often lacking at field level. On the other hand, if extensionists would be more keen on data collection and analysis, their services could be more focused on problem-solving during farm visits. Chest girth measurements by farmers and extensionists and putting these on growth cards would reveal young stock performance at a glance, while it is very difficult to judge it through daily looks or condition scores. Similarly, such measurements applied to cows, would reveal the weight and condition losses in cows after calving, that if timely corrected, could shorten the calving intervals at smallholder farms.

Variations in milk yield were not only attributable to differences among breeds, individual cows and/or lactation number, but were strongly related with concentrate supply, while a cooler climate associated with differences in latitude and altitude, facilitated the expression of high milk yield potential, when cows were-well-fed and managed. The large variation in milk production per ha could not only be explained by differences in climate and pasture type, but were also related to fertilization levels, stocking rates, number of followers kept, and especially supplementary feeding in the form of off-farm feed, both in the form of concentrates, and also in small farms the amount of off-farm roughage collected. Milk production per manday is low on smallholder farms, because of lack of mechanization and relatively high labour inputs in tethering, herding small numbers andlor (off-farm) feed and water collection. Improvements may be possible through introduction of more productive varieties and intensive grassland management, but little recent, quantitative information was available on labour-savings. High requirements in investment and labour in dairy farming and the low financial returns limited the number of dairy cows per farm, and favoured smallholders with sufficient family labour that were able to arrange for simple buildings and a few dairy cattle. Large differences in producer milk prices exist that are more based on the supporting economic environment than on technical possibilities of climate, soils, plants, animals and farmers. Comparative advantages of production of milk and dairy stock are therefore more manmade and depend more on societal desires and financial sacrifices it is prepared to avail for either supporting the working producer or the enjoying consumer. A cashflow from city-have's to the rural have-nots is essential to reduce the population outflow from the rural areas to the city or even abroad. The discussion on subsidies or other incentives is complex, because many economists believe that liberalizing the agricultural world market would put order in demand and supply at the correct price, while farmers and technicians feel, that a more stable, thus regulated economic environment, that allows viable producers margins between revenues and costs, and that directs target-oriented development through production incentives is more attractive for food security, employment, income and wellbeing of both consumers and producers.

I hope that the importance of a long-term remunerative producer price for milk and dairy stock has sufficiently been illustrated in this thesis on development of milk and dairy stock with smallholders.

Long-term efforts in dairy development in developing countries has increased the numbers of dairy cattle and dairy farmers. Also milk yields could be increased, where conducive government policies were directed to producers and their organizations, with opportune credit for dairy stock and farm development, training, extension and veterinary services. Long-term donor support stimulated technology generation and implementation such as the zero-grazing package, foragecrop rotations and small-scale milk processing, and strengthened producers' organizations. In most projects, further strengthening of farmers' organizations is still needed to arrive at more sustainable dairy development with small producers.

Crossbreeding with exotic sires and using the maternal characteristics of heat and disease resistance proved a better road to raise dairy cattle numbers. The organization of AI at field level was critical in supply of semen and liquid nitrogen and timing of service (many indigenous cows show only heat during the night and should be bred the same day. AI schemes have been successful where enough recipient cows of farmers participated and a higher genetic potential could be realized, e.g. in large-scale farms (South America), state farms (India, China, Cuba), parastatal farms (Kenya, Tanzania, Zambia, Zimbabwe). In smallholder areas in Kenya support of Swedish aid was initially quite successful with volkswagen routes but later the almost free service was little sustainable. In South America, Dutch aided AI in PROMEGA, Arequipa and in the Pasto project, Colombia found that participation of smallholders was to low to justify the costs of insemination routes by motor bikes. Als done by the Veterinary ranges reached only those close the vet's office. Doorstep AI in five states in India by BAIF and in Kerala with support of Swiss Technical Cooperation, was much more successful, but here dairy animals are more confined in villages and more accessible than where farmers have to walk a long distance to bring their animals to a road stall for service.

Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Zwart, D., Promotor, External person
  • van Keulen, H., Promotor
Award date6 Sept 1996
Place of PublicationWageningen
Print ISBNs9789054855682
Publication statusPublished - 1996


  • dairy cattle
  • dairy farming
  • calves
  • small farms
  • development projects
  • planning
  • lifetime performance


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