Dairy HubAAAP SeminarBangkokNov 29, 2012

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Agenda

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►Background►Dairy Hub defined & why Dairy Hubs►Dairy Hubs step by step approach►Dairy Hub economics►Measured achievements in Bangladesh & next

steps

Dairy Hub in Bangladesh

► Tetra Pak customers have been struggling with access to raw milk since the launch of packaged milk in 2005− Inconsistent Quality

− Fluctuations in supply

► PRAN took on the initiative to secure Raw Milk jointly with FfDO convinced from the Success of pilot project with Small Holder Dairy Farmers (collaboration between PRAN, FfDO, & CARE ..an NGO) in improving milking productivity

► PRAN decided to adopt the Pakistan Dairy Hub model after evaluating of practices in Australia, New Zealand, USA, Israel, India, & Pakistan

Background

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Dairy Hub Defined►This is a one-herd concept that encompasses small-

holder farmers from 20-30 villages within 20 – 25 kilometres radius

►Concentrated and focused services to small holders to make dairy farming more profitable

► It aims to educate & empower the dairy farmers by providing them training advice and veterinary services (services are provided free or at cost)

►All activities are recorded at farm level►Managed and owned by a private processor

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Why Dairy Hubs?►Fierce competition for the processors by small

dairies and city buyers►Adulteration / Fabrication of milk►Lack of frequent agricultural-services related to

modern dairy techniques►Communication gap (Farmer and processor)►Lack of skills in Modern Dairy Farming and Training

of farmers

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These issues have some implications……….

►Low milk yield per animal►Low milk density / square kilometre►High collection cost per litre of milk►Low quality of milk (TBC)►Demand supply gap and no farmer loyalty►Seasonality

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One herd concept

Dairy Hub – Solution for Sustainability

►Managed by dedicated dairy processorLong term relationship and loyaltybuilding

Producer / small farmerVillage Milk collection point

15 to 25 KMS

DairyHub

Dairy / Processor

Quality control

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►Profitability Nutrition Management Management of transition and fresh cows close to

calving (step-up feeding) Feeding managent to optimize the true genetic

potential of the cows Calf management

Dairy Hub step-by-step approach

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►Profitability Nutrition Management Cows

Register the individual cows’ production every fortnight by an extension officer

Create proper feeding practises around calving Create feed rations with best available fodder and

concetrates to optimize milk production Convince farmers to go to zero grazing Create proper additional feeding plans for farmers

who persists with grazing their cows

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►Profitability Nutrition Management Young Stock

Calf management to develop the calves into fast growing young stock

Feeding management to create a proper growth and development of the digestion system

Feeding management of the heifers to give adequate growth for optimal calving age

Register the weight gain of the young stock every month

Dairy Hub step-by-step approach

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► Feed shall not be viewed as a cost only, it shall be viewed as an “investment” as well

► It is not possible to get more production out of a cow than the input

► The cost per kg feed is important to consider, but the concentration of nutrients in each kg feed has to be considered as well

► Always calculate the feed cost per kg milk as the most important measure in feeding management economy

► Current milk price is BDT 40 ≈ 50 US Cents, this price level is at higher level in comparison to the other countries in the region

► Actual production cost will be assessed but with the current milk price the dairy farmer will be profitable

Feeding management economy

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►Milk Quality Training on high quality milk production

(hygiene around milking, clean buckets, fast delivery, etc)

Introduction of hygiene packages (detergents, brushes, teat dip, milk cups, CMT, etc)

Introduction of mechanized milking equipment on selected farms

Dairy Hub step-by-step approach

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Hygiene aspects to prevent bacteria development

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►Animal health Register all activities performed by vet service,

AI, etc on the farms. Herd/cow card (AI, vaccination, de-worming,

treatments, etc.)

Dairy Hub step-by-step approach

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Dairy Hub Economics:

Main Investment Items:• Cooling tanks – 20 VCC & Main cooling facility• Generators• Motor Bikes• Lab Equipment & Office Facilities i.e. computers• Milk Tankers – Transport• Electricity InstallationsTotal USD 945,000

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Dairy Hub EconomicsMain Operational Cost Items:• Staff & Personnel• Repair & Maintenance• Fuel – Electricity, Trucks & Motor Bikes• Financial Depreciation (20%)• Financial Interest (20%)Total USD 585,000 per annum or 48,400 per month

Sufficient throughput of daily milk through the dairy hub needs to be achieved to ensure

sustainability

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Chatmohar, Pabna located in the northern part of Bangladesh, Distance from Dhaka: 235 km

VMCC

Dairy HUB Location - Bangladesh

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Key Success Factors

Dairy Hub Productivity

► Collection Cost competitive to Traditional Collections System

► 71% increase in collection − 361,000 L (Sept 2011) 619,000 L (Sept 2012), (Peak 849,000 L, Feb)

► Milk Quality− 35% reduction in Total Plate Count

− 14% reduction in Somatic Cell Count

Farmers’ Profitability

► 37% Increase in Yield (5.8 7.9 L/Cow/ Day)

► 33% increase in income (1023 farmers)− $100 $133/Farmers/Month

Win-Win for both PRAN & Dairy Farmers

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Month wise collection from start

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0

100

200

300

400

500

600

700

800

900

PRAN Dairy Hub, Chatmohor, Pabna.Month wise Milk Collection (Thousand Ltrs)

Qnty Thousand liters

Impacts and Benefits

►Farmers- Access to the market- Increased income- Investment opportunities- Job opportunities

►Processor- Profitable Dairy Business- Employment of high qualified staff

►Society- Access to high quality and safe domestic Dairy products

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►PRAN Planning 2013 until 2016

− Establish a Dairy Academy for training of staff and other people interested to work in the Dairy sector

− Establish an additional 3 Dairy Hubs (a total of 5)

− Optimize the total collection per HUB (each HUB has initially a capacity of 30,000 L/day, but can easily expand to 50,000 L/day)

− Encourage farmers to invest and develop their Dairy business

Accelerate Dairy Hub Ramp Up

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Traditional Farms

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New investments

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Village Milk Collection Center

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Local Transports

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Local Transports

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Chatmohar HUB

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Chatmohar HUB

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Milk delivered from the VMC

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Laboratory

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Milk Quality Tests

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Pouring into the pump cistern

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Pouring into the pump cistern

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Modern Transport Trucks

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High Quality and Safe Products

Questions & Thank You

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