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Lanka looks to India to tide over crisis

world Updated: Nov 01, 2007 15:13 IST
PK Balachandran
PK Balachandran
Hindustan Times
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Sri Lanka is looking to India and China to beat down the soaring price of powdered milk, and meet a severe shortage. The Minister for Trade, Bandula Gunawardene, told Daily Mirror earlier this week, that an Indian and Chinese company had sent samples for quality assessment, and that government would allow import of cheaper milk of good quality.

It is not clear as to how much powdered milk Indian manufacturers may be able to supply, because India is not a significant producer of powdered milk. But the prices are lower there. In Chennai, for instance, a 500 g pack of "Sagar" full cream milk is sold at Indian Rupees 90 (the equivalent of SLRs. 253) while a 400 g pack of "Anchor" full cream milk is sold in Colombo at SLRs.275. Sri Lankans pay more for less milk.

Though the current shortage and the steep rise in the prices in Sri Lanka, can be attributed to the significant increase in prices in the international market ( US$ 5000 per tonne now), cheaper imports from India or China can only be a temporary palliative. Experts in animal husbandry and dairying say that the real and long term solution lies in increasing domestic milk production and making Sri Lanka at least 50% self sufficient in milk in the next decade or so.

Self sufficiency a far cry

It wasn't so long ago, till mid 1970s to be precise, that Sri Lanka was meeting 80% of its demand from local sources. But today, 80% of the total demand of 740 million litres per year is met by imports, principally from Australia and New Zealand. Over the last year, Sri Lanka spent SLRs.12.5 billion (US$ 112.6 million) on milk imports.

Another disturbing fact is that there have been frequent surges in milk imports unrelated to world prices, which FAO has brought to light. The milk import lobby is very influential. Allegedly, it has thwarted attempts to promote domestic dairy farming and milk production.

The basic problem is that successive Sri Lankan governments have been grossly neglecting dairy farming since 1977, when, with the opening up of the economy, cheap imports began to flood the market, driving local producers out.

According to Dr.Chandrawansa Pathiraja, Chairman of the National Livestock Development Board, Sri Lanka's dairy cow population has remained constant at 1.1 million for 30 years due to lack of interest in animal husbandry and dairying. Many of the dairy cows are sold to butchers because they offer high prices, he says.

Sri Lanka immediately needs 60,000 milk yielding cows, he has said. The government is importing 15,000 in batches, to be distributed among dairy farmers who number about 100,000.

"There is a plan to attain 50% self sufficiency in milk by 2015, but this needs massive investment for upgrading the stock, providing specialized attention, creating a network for milk collection and milk preservation, and developing pasture land, which is in short supply," says Nimal Ranaweera, a former government specialist.

But milk powder importers, and the multi-nationals who supply them, say that self sufficiency in milk is a pipe dream, as there is a long way to go. Furthermore, there is no political will as the failure to replicate Kurien's "Anand" model in the 1990s showed. The Sri Lankan system is not yet geared to taking such a great leap forward.