Bernardo M. Villegas
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The Fourth and Fifth Rs
published: Sep 27, 2019






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Dairy Farming for Poverty Alleviation (Part 3)

          Much can also be done by cooperatives to get the benefits of dairy farming of small farmers to trickle down to the poorest of the rural dwellers.   The cooperatives are formed to represent dairy farmers in dealings with the Government as well as negotiate better prices and other interests with the private sector.  They also provide technical and other support services to the member farmers.  As reported in the Dairy Industry Road Map prepared by the Center for Food and Agribusiness of the University of Asia and the Pacific, cooperatives are categorized into three types:  primary cooperatives, secondary cooperatives (federation of primary cooperatives) and tertiary cooperatives (the confederation of secondary cooperatives.   As of 2015, there were 166 NDA-assisted primary cooperatives; 10 secondary cooperatives; and one tertiary cooperative. 

         The primary cooperatives act as collection centers for raw milk to be processed.  The cooperative federations, which operate the processing facility, usually buy the milk from primary cooperatives, then process and market the collected milk.  The tertiary cooperative, the Dairy Confederation of the Philippines (Dairycon) established in 1993, is the major organization of all dairy cooperatives, associations and processors in the Philippines.  It serves as an avenue for dairy farmers in the discussion of common interests affecting the dairy farming sector in particular and the dairy industry in general.  Meanwhile, the carabao dairy farming sector is also composed of farmers and cooperatives and is part of the tertiary cooperative, Dairycon.  As of 2012, the Philippine Cooperative Center has assisted 36 cooperatives from the National Impact Zone and 45 cooperatives in the Regional Impact Zone.

         Cooperatives have helped small holder dairy farmers attain the necessary economies of scale, especially in transfer of technology and marketing, to attain financial viability.  A more sanguine assessment of dairy farming as a means of poverty alleviation can be found in a paper written by Ms. Sally Bulatao, Former Administrator of the National Dairy Authority.  In “Philippines: Promoting dairy entrepreneurship through enterprise zones” Ms. Bulatao enumerates three opportunities that can facilitate small holder dairy farmers in accessing the expanding local dairy markets:

         1.  Dairying for agrarian reform communities and families of overseas contract workers.  She cites some existing dairy zones located in agrarian reform communities, including those in Bulacan, Quezon, Negros Occidental, Iloilo and Zamboanga del Norte.    Authorities have seen the benefits of dairying to families of agrarian reform beneficiaries.  They have considered introducing dairying in suitable areas among the 1,500 agrarian-reform communities throughout the country. This initiative could potentially accelerate the participation of more smallholders.  Likewise, OFWs interested in investing part of their savings have considered dairying as a possible investment for their families in their respective home villages. 

         2.  Mainstreaming of widely consumed dairy products, such as evaporated and condensed milk, and other products.  There are already facilities available that can produce popular dairy products, such as evaporated and condensed milk.  Some help can come from the large milk companies as part of their CSR programs as well as Government agencies that have the technical competence in processing raw milk, not only in evaporated and condensed milk but also other processed products such as yogurt and cheese which are already in demand even outside the urban centers.

         3.  Institutionalized local government-sponsored milk feeding for day-care centers and schools.  Smallholder dairy producers should be given priority in supplying the milk needed for milk-feeding programs in day-care centers and schools in their respective localities.  There should be stricter compliance with the provisions of the National Dairy Development Act which stipulates that government-sponsored nutrition programs shall be supplied by local producers.  This policy addresses poverty alleviation in two ways:  it makes milk available to the children of the rural poor who are in most need of the protein found in milk to help develop their brains in early childhood. At the same time, it helps supplement the income of the small farmers who are involved in milk production.

         The paper of former NDA Administrator Sally Bulatao concludes with  the contrary opinion that smallholder dairying, with the proper support from business, Government and civil society, can help alleviate poverty in the rural areas.  She cites enough successful enterprises run by individual smallholder dairy farmers, primary cooperatives and cooperative federations to prove that the broad-based model of cluster producers can take advantage of distinct economies of scale using farm labor and marginal lands. There is especially the opportunity of clustering big and small farm enterprises which can lead to bigger scale operation over time.  She also celebrates the entry of NGOs and foundations because of the greater attention to the social preparation of smallholders given by these institutions, which preparation is often overlooked by the Government-initiated projects that tend to focus on the technical aspects.  For comments, my email address is bernardo.villegas@uap.asia.