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Milk farmers plead for help before FTA

Bangkok Post, 18 July 2009

Milk farmers plead for help before FTA


The Milk For Thai Club forecasts dairy farming will be hit hard if the government does not seriously help farmers before signing free trade area (FTA) agreements on dairy products with Australia and other countries.

Dairy farmers face many negative factors including low product prices and a lack of education to develop and compete with other rivals both in domestic and global markets.

"I don’t want our children to see milk cows in the zoo. If we do not develop the industry before signing the FTA, we will face that situation," said Veerasak Wongsombat, the club’s president.

Although the government has tried to help farmers by implementing the school-milk programme to absorb supply, it runs into snags over time because an oversupply of raw milk emerges during school breaks and long weekends.

"All parties must work together to develop the local dairy farming business. The government should educate farmers on how to breed milk cows according to global standards and seriously promote milk drinking among Thais," he said.

Also, a memorandum of understanding between dairy producers and the Department of Livestock should clearly mention the quota of imported milk powder and raw milk from local farmers to avoid an oversupply of raw milk.

Many factories have broken agreements and imported more milk powder than their quotas allow, particularly when the price of milk powder dips. They claimed the quality of local raw milk is unverified.

At present, global fresh milk averages around US$2,000 per tonne, down from $4,900 per tonne two years ago. The price of milk powder is lower than fresh milk by about 4-6 baht per litre. Consequently, producers prefer to use milk powder as the raw material instead of fresh milk even if the quality of fresh milk is higher.

Mr Veerasak said farmers should develop good farm management. Sometimes farmers feel the need to continue to feed cows that don’t produce quality milk instead of killing them, adding to their financial burden.

Thailand produces 720,000 tonnes of fresh milk per year and local consumption is one million tonnes per year. Per capita milk consumption of Thais is very low at 14 litres per year, compared with 250 litres in the US.

"This shows that the dairy farming business has the potential to grow as supply is insufficient. If the government seriously promotes the benefits of milk drinking among Thais, it will increase consumption and help the families of 20,000 dairy farmers to survive," Mr Veerasak said.

Thailand’s liquor and alcoholic beverage market was worth many trillions of baht and grows at a high rate, he said, while the milk market is flat and shows modest growth.

 source: Bangkok Post