Enunciados de Autonomía y Proyecto Educativo Institucional (P.E.I)

At present, there are almost 13,000 dairy farmers in Thailand. The average yield of raw milk per cow is low due to lack of new and improved technology, low feed availability, and the small, uneconomic size of most farm operations. The average dairy yield per cow is only about 5-7 kilograms. Table 2.4 and Figure 2.3 illustrate the population of dairy cows and production of fresh milk in Thailand during 1080-2000. During 1982-2000, the number of dairy cows has increased significantly from 30,046 heads in 1982 to 352,010 heads in 2000 (see Table 2.4 and Figure 2.3). Fresh milk production also expanded from 27,028 tonnes to 494,692 tonnes over the same period. However, during 1994-1997 the growth of dairy cow numbers and milk production was slow, compared to the period 1998-2000 in which the rise was rapid. The slow growth during 1994-1997 has been attributed to limited land, insufficient labour and low capital investment in the dairy sector.

Table 2.4: Population of Dairy Cows and Production of Fresh Milk in Thailand (1980- 2000)

Year Dairy Cow (Head) Fresh Milk (tonnes)

1980 na 17,506 1981 na 21,311 1982 30,046 27,028 1983 37,819 36,029 1984 47,454 46,197 1985 53,343 57,895 1986 65,427 69,175 1987 77,676 89,912 1988 86,905 99,450 1989 96,646 118,945 1990 101,286 155,574 1991 105,766 193,895 1992 106,014 227,784 1993 126,262 293,255 1994 144,299 326,381 1995 159,098 350,196 1996 160,000 375,302 1997 171,526 385,477 1998 323,254 437,116 1999 339,265 464,514 2000 352,010 494,692

na: not available.

Source: Centre of Agricultural Statistics, Agricultural Statistics of Thailand (1984-2000), The Office of Agricultural Economics.

Figure 2.3: Population of Dairy Cows and Production of Fresh Milk in Thailand (1980- 2000) 0 100000 200000 300000 400000 500000 600000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 year

Dairy Cow (head) Fresh Milk (tonnes)

Source: Centre of Agricultural Statistics, Agricultural Statistics of Thailand (1984-2000), The Office of Agricultural Economics.

The problems of the dairy industry in Thailand include low productivity and high production costs. The national average of milk yield per cow per day has been 10-12 liters for many years which reflect no improvement although many farms have better quality cows producing 10-25 liters per day. In the past decade, Thailand imported 40,000 crossbred heifers from Australia and New Zealand, due to an insufficient number of high quality dairy cattle in Thailand. DLD has lunched he dairy-herd improvement (DHI) program and attempted to develop Thai fresh milk to increase supply on the domestic market.

The production of pasteurized and UHT milk in 1993 was about 580,000 tonnes. This included about 30,000 tonnes of capacity for the production of sterilized milk and approximately 100, 000 tonnes capacity for the production of frozen yoghurt and drinking yoghurt for domestic consumption. The capacity of pasteurized milk is greater than UHT, while the actual consumption and production of UHT milk are significantly greater than pasteurized milk.

During 1984-2000, raw milk production increased from 46, 000 tonnes to 785,880 tonnes. In 1996, the production of dairy products started well at about 1,000 tonnes per day or around 387,600 tonnes annually. However, this was still only 60 per cent of demand of RTD milk in the Thai market. In 2000, the demand of raw milk for RTD milk production reached 1, 213, 433 tonnes, while the supply of raw milk is in low capacity on just 785,880 tonnes, as shown in Table 2.5.

Table 2.5: Raw Milk Production and RTD Milk Production (1984-2000)

(Tonnes)

Year Raw Milk

Production RTD Production 1984 46,000 62,400 1985 54,600 66,000 1986 69,200 81,600 1987 89,713 126,300 1988 106,709 na 1989 122,500 na 1990 155,600 na 1991 193,900 na 1992 227,800 na 1993 293,300 na 1994 326,400 na 1995 350,200 na 1996 387,600 710,818 1997 429,120 829,111 1998 563,400 961,829 1999* 669,960 1,108,887 2000* 785,880 1,213,423

na: not available. *Estimated by Suwannabol. Source: Suwanabol (1998).

Figure 2.4: Raw Milk Production and RTD Milk Production (1984-2000) 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998₁₉99*₂₀00* year tonnes

Raw Milk Production RTD Production

Source: Suwanabol (1998).

To support the domestic dairy industry further, the Thai Government set up the Dairy Production Policies Committee in 1988. There are many representatives consisting of the public sector, farmers, processors, importers who are involved in production, collection, processing, marketing and imports of dairy products. Their objectives are to provide government agencies with the vision, policy framework, production targets, and plan and the development of dairy products.

During 1994-1996, the strategies of the DPO have also incorporated special aims for dairy production, such as the following:

• To advocate as well as improve domestic dairy production aimed at self- sufficiency within the domestic dairy market;

• To increase farmers’ income from the sale of fresh milk in order to upgrade their quality of life;

• To improve the nutrition of the population by producing quality products, sell dairy products at reasonable prices, and promote the domestic consumption focused on all the dairy products;

• To support the research and development of dairy cattle breeding and feeding in order to increase milk yield per cow and minimise fresh milk production cost; and

• To improve the efficiency of the operations to achieve the viability and to maintain the price stability of domestic fresh milk.

The Thai government’s dairy production policies have aimed at self-sufficiency of domestic fresh milk production and the reduction of milk imports. The commercial dairy farming promotion areas have also been planned, and dairy farmers were required to register with collecting centres so as to facilitate the aspects of quality control and services. It specifies that promotion areas have to be located within a radius of 200 km from the collecting centre, which is responsible for collecting fresh milk from farmers in 50 km around the centre (The Office of Agricultural Economics, 1988a).

The policies enlist further objectives as follows:

• To improve production of raw milk encouraging cooperative system and private business to adopt good management;

• To improve structure of milk cattle farms to meet the standard system in 2001;

• To carefully consider on import non-dairy milk in order not to affect the domestic farmers known as “environmentally friendly”; and

• To regard milk product as the “green products”.

Manufacturers or producers have to hold the responsibility for any destroyed packages, to encourage the research and development on raw milk processing or other value added products, to assign Food and Drugs Administration to cooperate with the Department of Livestock Development (DLD), to monitor the quality of milk product, and to establish a central organization that manages legal claims against any manufacturer or producer whose product is unqualified. (The BOI, 2003a).

The Co-operatives Promotion Department (CPD) is committed to stimulation of the growth of registered dairy co-operative members and to provide staff to advise the operation of co-operatives to assist dairy production, feeding, artificial insemination, vaccinations and decease control, milk collection and transport, and processing. Farmers who register with the co-operatives would receive free artificial insemination and vaccinations for the cows from DLD, and if any veterinary treatment is required, farmers will only pay for the prescriptions. These services will support adequate training and supervision to the members.

The marketing policy to support domestic milk production has been prepared to assist the dairy industry in increasing milk output. Dairy farmers also receive training in marketing under the co-operatives’ framework that the local farmers have been advocated by the government’s financial strategies for investment in the dairy sector. Consequently, investment takes place with low interest loans that are supported by the CPD, and technical supervision from DLD. At the same time, private processing plants are to assist either in the part of quality control, collection, and production, technology or in the initial investment of the centres which will be paid back by fresh milk produced in the farms. In order to increase domestic consumption of dairy products, the CPD has used marketing plans and consumer protection for the promotion of milk consumption in both public and private sectors (The BOI, 2003a). The eighth National Economic and Social Development Board (NESDB) during 1997-2001 agreed to improve the domestic agricultural sector, including the dairy sector. The Board aims to create a link among the three main areas of agriculture, industry and services in order to promote locally produced raw materials and to increase employment and value added, to upgrade efficiency in production management to solicit cooperation from all parties in agricultural sector as well as be ready for economic changes, to use advanced agricultural technology for small farmers holding small land plots (The BOI 2003b).

The Thai government and the DPO advocate improving the dairy production under the production policy to increase domestic output for consumption and manufacturing. DPO focuses on research and development in order to increase milk yield per cow, to minimise fresh milk production cost, to set up a central organization that would help farmers and producers to manage the product quality and to cooperate in the government’s financial strategies for investment. Consequently, Thailand’s dairy industry has grown since 1990.