V ECONOMIC IMPORTANCE OF TRADITIONAL MILK PRODUCTS

1. SOUTHERN AND EASTERN AFRICA - GENERAL

In the absence of accurate data on the contribution of the traditional livestock sector to the national milk production of individual countries within the region, it is difficult to give exact figures on the economic contribution of traditional dairy products in the region as a whole. However a reasonable estimate can be made by making extrapolations which are based on reasonable assumptions. The basis of these assumptions is the published FAO estimates (FAO, 1987) for 1985 for the individual countries listed in Table 3, as well as other published data and the personal experience of the contributor within the region. From Table 3, it can be seen that in 1985 the sixteen countries produced a total of 4892, 780 and 1085 thousand metric tons of cow, sheep and goat milk respectively. It follows that:

1. In view of the limited distribution of sheep and goat milk both between and within the countries in the region, it can be assumed that most of the milk from these species and that of the camel is consumed within the pastoral communities (Kebede, 1984, Kerven, 1987) and therefore any amounts marketed are negligible.

   Hence while considering the economic contribution of traditional dairy products in the region, attention will be given only to cow milk which constitutes about 70 per cent of the milk produced in the region and nearly 100 per cent of the marketed milk and dairy products.

2. Reports dealing with the performance of the dairy industry in some of the countries (see references Table 4), show that less than 10 per cent of locally-produced milk enters the commercial market which means that over 90 per cent of milk produced locally is consumed within the pastoral/agropastoral communities and their immediate neighbourhoods. This is also true for a country like Kenya which has a relatively well-developed milk marketing system. Chema (1984) reported that only 10 per cent of the estimated 463,000 metric tons of milk produced by Kenyan traditional pastoralists was marketed, as compared to the overall commercial offtake of 42 per cent.

3. Except for Kenya and Zimbabwe where about 50 per cent of the milk produced is from smallholder and/or commercial farm standard dairy cattle, in most of the other countries in southern and eastern Africa, the traditional sector amounts for 80–90 per cent of total milk produced.

4. Since traditional dairy products are associated mostly with the traditional cattle keepers then the amount of milk involved in traditional processing may be taken to be at least 80 per cent of the total milk produced i.e. total milk less 10 per cent that is produced in the commercial sectors and another 10 per cent which is marketed from the traditional sector via milk processing plants.

Following the above hypothesis, Table 4, on the basis of FAO's (1985) estimates for cow milk production, gives the estimated amounts of milk that may be available for traditional processing and marketing.

For seven countries where figures for commercially processed milk were available, these have been included in Table 4 to illustrate the fact that except for Kenya and Zimbabwe, only a small proportion of local milk production is processed and marketed by commercial milk processing plants thus making the presumed 10 per cent offtake too generous an estimate in the majority of the individual countries.

On the basis of the above assumption, the total amount of milk that may have been processed and/or marketed traditionally was about 3.485 million metric tons for the whole region. Most milk is traditionally processed into fermented milk which is in turn churned to give butter and buttermilk. Most of the buttermilk is consumed within the households except in Ethiopia where most of it is turned into cottage cheese (ayib). In some pastoral communities in southern Sudan, buttermilk is bartered for grain at varying exchange values depending on the season (Kerven, 1987). In most cases the butter is boiled into ghee which fetches high market prices due to the high demand for cooking oil in general and ghee in particular which is preferred by Indian communities in the urban centres of some countries in the region. About 75 per cent of the ghee produced is sold while the remainder may be retained for home use.

It has been reported that the efficiency of fat recovery in the traditional churning of fermented milk in Ethiopia was about 50–67 per cent in most of the households although under cooler temperatures in the Ethiopian highlands fat recoveries of 75–77 per cent were recorded (O'Mahony and Bekele, 1985). Assuming that 50 per cent of the milk available for traditional processing (Table 4) is fermented and churned to butter (Kerven, 1987) with a minimal 50 per cent fat recovery (O'Mahony and Bekele, 1985) and that zebu milk contains about 5 per cent butterfat, the amount of ghee containing 99.5 per cent butterfat that may have been produced in 1985 is shown in Table 23 together with the value of imports of butter for 1984 (FAO Trade Yearbook, 1985).

From Table 23 it can be estimated that a total of about 43,400 metric tons of ghee may have been produced and it is possible that 75 per cent of this (about 32,000 metric tons) could have been sold or exchanged for other goods or foodstuffs. The balance of 25 per cent may be taken to account for dairy products retained for home consumption by those who sell part of their dairy produce and those who, like the Lahawin pastoralists in Eastern Sudan, traditionally do not sell their dairy produce (Morton, 1988). Due to the wide price variations between the different countries within the region it is difficult to estimate the exchange value of the ghee that might have been produced or sold. However, from Table 23, the amount and value of butter imports give an indication that the cost of butter imports to the importing countries in 1984 was about 2 US dollars per kg butterfat. The local price of one kg of butter has been reported to be the equivalent of 5–11.5 US dollars in Ethiopia (O'Mahony and Bekele, 1985), 3.5 US dollars in Burundi (Kakunze, 1984) and in Tanzania butter is currently retailing at 3–5 US dollars per kg while the cost of butter oil imported through the World Food Programme (WFP) commodity aid programme is valued at 415.84 Tshs (4.2 US dollars) per kg (Lohay, 1988).

* Obtained by 38.5×0.05)×0.5)×0.995)

Source:

** FAO Trade Yearbook, 1985

Source: Kurwijila (1989)

It is therefore reasonable to assume that the price of ghee paid to pastoral producers in the rural areas will be in the region of 2.5 to 3 US dollars/kg. This implies that the cash flow into the pastoral economy through traditional ghee sales may well be in the region of the equivalent of 80 to 96 million US dollars in the sixteen countries of southern and eastern Africa. To this can be added the value of approximately 7.25 million US dollars from the sale of about 14,500 metric tons of cottage cheese in Ethiopia. This figure was obtained by assuming that half the 232 million kg of the buttermilk available from traditional buttermaking in Ethiopia (Table 4) is turned into cottage cheese (ayib) valued at 0.5 US dollars per kg while the rest is consumed as buttermilk. Furthermore, from the data given by Othman (1987) and information given by Kerven (1987), the amount of gibna bayda cheese made in Sudan is likely to be between one and two thousand metric tons per annum, the value of which is difficult to tell due to lack of any definite data on local prices of the products. Taking into account the conservative assumptions adopted here the total value of traditional dairy products in the region could easily be around 100 million US dollars. This is a substantial income per capita of the pastoral and agropastoral communities involved in traditional dairy processing. In a case study of pastoralists of South Darfur, Sudan, Kerven (1987) found that income from the sale of dairy products contributed between 40–44 per cent of a family's annual income.

Besides providing cash income to the rural communities through the sale of preserved dairy products, traditional milk processing involves other economic aspects such as the creation of rural employment in pottery for the rural women who make clay pots used in milk processing and to the middlemen and hawkers who market some of the milk products in urban and fringe urban areas. Youths at home who help their mothers to market dairy products, or to milk the cows (in some communities women are traditionally not allowed to milk cows) and look after the cattle, get some kind of employment.

2. SOUTHERN AND EASTERN AFRICA - ETHIOPIA

Of the traditional milk products, butter is a commodity that has a ready market in any part of the country and also in some other countries of the region. In rural Ethiopia especially, where there is no liquid milk market, butter is the only milk product which is produced for marketing. The price of butter fluctuates depending upon demand and supply. There is an increased demand for butter for Christian and Muslim festivals. During the 40 to 56-day fasting period (March, April and May) of Lent, observed by the followers of the Ethiopian Orthodox church, the demand for milk and milk products is low. Similarly the supply is low as this period falls within the dry season, October to June. Regardless of the shortage of milk during the dry season, the milk producers in or on the fringe of urban areas find it difficult to market the dairy products during Lent.

According to statistical data of the Ethiopian Customs Office, butter and ghee are export commodities to the Middle East. However, since 1978, the export of ghee has declined and that of fresh butter is increasing. In 1980, only 126 kg of ghee and 5000 kg of butter were exported.

Sour milk (irgo), sour butter milk (arrera) and cottage cheese (ayib) have limited markets. Those farmers near urban centres have a market outlet for these products.

Some itinerant traders buy cottage cheese from rural markets, accessible by road, and transport the product by bus, lorry or any other public transport, to large urban centres. These products are of economic importance to the producer. There are large number of butter dealers in urban centres who make a sound business. The marketing of these products generates the scarce cash income to the farmer.

3. WEST AFRICA - MALI

Trade in milk and milk products is confined to local markets. from the data on imports of milk and milk products it is clear that there is demand. It is also true that a large volume of milk is produced within the country. However, the local production does not reach the consumer owing to lack of marketing infrastructures.

On the other hand, those producers who are close to local markets do market their products.

4. SOUTHCONE COUNTRIES OF LATIN AMERICA

These products have a tremendous importance for small producers who are very numerous in all of the southcone countries. even more importantly, each small producer has a family of at least five people. That means that a very large number of people depend economically on these activities within the region.

Small processing units normally are family ones, then all the members of the family have got a job in it, but medium processing units need more workers than their own family provides so these activities provide jobs for an important part of the rural population in every country. Unfortunately, the number of small and medium processing units are not precisely known yet in those countries and the total people working in them could not be estimated, although it is a big number indeed, e.g. goat cheese production is the main activity done at the small producer level of agricultural activities in the La Serena region of Chile. In Paraguay, Bolivia and Peru more than 50 per cent of the total milk supply is processed by the small processing units.

Generally speaking, this activity is one of the most attractive of those of the agricultural industry since it has less financial risk than some others, for example cropping.

In addition to the processing of a traditional product the farmer obtains several other benefits such as:

1. He gives an additional value to the milk produced on his farm so the financial income is greater than that of selling raw milk,

2. Sometimes further income is obtained through the encouragement of the farm's own marketing of the product either individually or through cooperatives,

3. Normally the unit for traditional milk products has a regular milk intake at least during the Spring-Summer seasons, if it is a very small unit, but many of the processing units have a constant level during the year,

4. In addition, consumption habits of the population sometimes allow traditional products to obtain higher prices that the parallel industrial version. However, that does not always mean a higher income for the dairy producers because of the profits required by the middlemen.

Nevertheless it has to be clear that this sector does not obtain its full potential mainly due to the poor quality of the product obtained. At the milk processing units there are some losses due to (a) the poor yield of the products because of lack of technology and quality control, (b) complete loss of the batch because the product has not been successfully made, (c) prevalence of reprocessing of second quality products, (d) loss of financial return from products requisitioned by the state authorities when it is forbidden to sell traditional products made at a dairy farm.

The traditional milk products sector contributes to reduce the normal deficit of milk from those southcone countries in Latin America where the imports of dairy products are reduced at present. In addition in some countries traditional dairy products are the main milk products made there, so most of the milk consumed comes from this sector.

In the same way small processing units actually avoid the spoilage of milk produced far away from the cities, through the milk being transformed into products with a longer shelf life than fresh milk.

Finally, from the economical point of view, traditional dairy products have a tremendous potential which could be used to develop the following:-

1. To increase the milk yields of individual animals,

2. To increase the yield of product obtained (kg milk/kg product),

3. To improve the quality of the products.

Consequently, milk production per capita would be higher than now and so imported dairy products could be reduced substantially. This means that more of the population with a low salary could have the opportunity to increase milk consumption for all their family especially children and old people.

Small processing units and all of the activities linked to them, avoid more of the population, particularly young people, leaving the rural areas to go to the big cities where they normally cannot find work and so they must live in very poor financial conditions.

For all of the reasons mentioned, it can be seen that the agricultural sector is economically very important for every country, so economical help and practical policies should be encouraged by the respective governments in order to improve the actual conditions of the traditional milk product industry.

5. MIDDLE EAST - SYRIA

The sale of milk products, in many forms and many tastes, surplus to the requirements of the rural milk producer has been well known in Syria for many years.

The amount of milk available for processing in large industrial plants and the private and smaller factories may reach 35 per cent of the total milk produced in Syria.

In 1987 the value of milk production in Syria was 5094.9 million Syrian pounds. This represented about 35 per cent of the total value (14,424.7 million S.P) of agricultural production in the same year.

The economical importance of milk and its products in Syria is shown below.

In spite of the fact that Syria produces 1.1 million metric tons of milk of which 35 per cent (or 373,217 metric tons) are consumed as fresh milk, the production is not sufficient to meet the people's requirements.

Syria has to import dairy products to bridge the gap between the available milk products produced in the country and the population's demands.

In 1987 Syria imported 11,630 metric tons of milk (concentrated or sweet and preserved cream) valued at 179.7 million Syrian pounds, 15,179 metric tons of butter and ghee (valued at 228.6 million S.P.) and 1373 metric tons of cheese valued at 35.9 million S.P.).

The importance of the existing production of traditional milk products is indicated in relation to import saving.

6. ASIA

6.1 INDIA AND NEIGHBOURING COUNTRIES

With an annual milk production of 46 million metric tons in 1986–87, India ranks third in the world after the Soviet Union and the United States of America. Milk production is expected to further surge forward in the coming years to cross the 61 million metric tons mark by 1995. The target for 2000 AD is 70 million metric tons.

Milk and milk products play a vital role in the agricultural economy, being the second largest agricultural product in India. In 1984–85 the value of milk and its products exceeded Rs.100,000 million, ranking after rice, but before wheat. Equally important, if not more so, is the role of dairying in providing sustenance to millions of farmers, constituting 75 per cent of the total population in some 80 million farm households distributed over 550,000 villages, constituting the bulk of rural poor, with an annual income of less than Rs. 3,800 per family. Milk provides both nutrition and supplementary income to these weaker sections.

Over 5 million farm families, in 49,000 village milk producer's cooperatives, sell on an average some 8 million litres of milk every day, after retaining some 30 per cent of it for their own consumption. Sale of milk fetches them about Rs. 30 million per day aggregating Rs. 10,000 million per year.

The value of output of the Indian dairy industry and its growth in the national economy is illustrated in Table 25.

* Projected

Table 26, gives the value of the output from agriculture and livestock in 1984–85. Output from milk and milk products constituted 13 per cent of the total output from agriculture and livestock farming.

* Includes rice bran, rice husk, sesamnin sticks, bagasse and cane trash

+ Includes fodder, grass, farm-yard wood

++ Includes bones, horns, hooves and cocoons

The pattern of utilization of milk in the country and changing trends over the years is given in Table 27.

** includes paneer, chhanna and processed cheese.

+ includes infant milk food.

India alone produces some 650,000 metric tons of ghee valued at Rs. 32,000 million. The value of resultant lassi is Rs. 10,000 million, some 600,000 tonnes of khoa valued at Rs. 18,000 million is produced in India along with some 100,000 metric tons of chhanna valued at Rs. 3,000 million. The value of khoa and chhanna produced in India is probably twice the value of all the milk handled by the organised sector in the country.

The traditional dairy products sector in India, like its agricultural economy, is grossly under managed. However, it provides economic opportunities that even the western dairy world would be envious of. The value of khoa and chhanna-based sweets could possibly exceed US $ 4 billion. In the absence of reliable data, the above figures are only rough estimates, but highlight the significance of the traditional dairy products in the national economy.

6.2 HIMALAYAN AREA - NEPAL AND BHUTAN.

Livestock keeping plays an important role in the socio-economic and cultural life of the people inhabitating the alpine and mountainous regions of Nepal and Bhutan. The yak, chauries and cows fulfil an indispensable role for the people in the Himalayan area. The people of this area have many applications for these animals and they are used for several purposes. Livestock farming remains as one of the major income sources for the farmers residing in high mountains and hilly regions. These livestock provides the farmers with more than 50 per cent of their yearly income besides providing them with nutritious food, and milk and also acting as motive power to sustain agricultural activity.

In the Himalayan area herds are mostly scattered, living in jungle grazing systems developed independently. Almost simultaneously in the hills cows are grazed for the production of draught animal power, dung and compost and are fed with some supplementary feed. In particular in the hills of Nepal, about 20 per cent of the milk is consumed direct in liquid form and the rest is used for conversion into ghee, dahi and mahi. In the Terai area of Nepal, local cows are herded throughout the day for grazing, usually not given much additional feed, usually producing no milk but are kept for the value of male calves, dung and compost. As a rule buffaloes are kept for milk production and are given supplementary feed and concentrates. Milk from the buffalo is consumed at home as well as converted into traditional milk products like curd, mahi, ghyu (ghee) etc.

In the high mountains of Nepal and Bhutan, yaks and chauries are the main source of income. The herd owners make traditional products such as butter and the butter milk, which is churned out is converted into chhurpi or sheror shergum. All these products are sold in established markets and exchanged for food, salt etc. These people depend mainly on the trade in butter and chhurpi. Khoa and chhana making in Nepal and India is mostly in or near town and cities. However some producers or even middlemen living in small areas of milk production away from towns used to make khoa from the locally collected milk and sell it to the sweet shops. In Nepal the statistics of the production of khoa, chhana, chhurpi and sher or shergum are not available. Survey and collection of data for these products as well as traditional butter has never been done. However some statistics for traditional ghee or ghyu were available from the trade promotion centre of Nepal for the fiscal year 1987–88. The figures are shown in Table 28.

Source:- Trade promotion centre, Nepal. 1987-88.

Nembang (1989)

According to these figures the local consumption is estimated at 27.39 per cent of the total and the exportable is 72.61 per cent. It can be estimated that 60–80 per cent of ghee produced in Nepal is surplus to local requirements.

The home consumption of ghee by the farmers is estimated to be from 4 to 20 per cent of their production and of the national production of ghee or ghyu about 62 per cent is from mid-western and far-western regions. Around 8540 metric tons of ghee is exported to India at the present time. The traditional ghee or ghyu is packed and sealed in 16 kg tins and sold under the famous name of Nepal ghee.

Farmers of the remote areas are financially better off making chhurpi as well as traditional ghee. The most of the remote areas do not have agricultural crop products. They depend upon income from traditional milk products for their livelihood.

In Bhutan, in 1988, it was observed (Nembang, 1989) that the farmers of remote areas are fully dependent on cheese, chhurpi, and traditional butter products. In the remote areas of Bhutan as in Nepal, there are no agricultural products except those of traditional dairy production. In particular in eastern Bhutan, the farmers, make cheese (cottage type) and butter. They exchange or barter these products for food and partly sell for cash. The production of traditional butter and white cheese (cottage type) in five districts of eastern Bhutan was 955.6 metric tons and 424 metric tons respectively.

The barter system is very common in Bhutan. Farmers exchange their dairy products for food grains. The exchange rate for Bhutan is also fixed on the basis of food and milk product prices. The farmers of remote areas of eastern Bhutan are fully dependant upon the income from traditional milk products. The whole economy of farmers is based on sales or exchange of milk products for cash and food for their livelihood. This is particularly true for the people who are living in the alpine regions of Nepal and Bhutan. Governments should launch a special programme for the development and improvement of dairy production. As a matter of fact 90.7 per cent of cow milk, 96.4 per cent yak milk, 73.6 per cent buffalo milk are converted into milk products, such as chhugu, soft cheese, butter, smoked cheese in Bhutan.