John Myers Jr, Business Reporter

A dairy farmer in St Elizabeth pouring milk to be processed. - File

Half a decade after the expensive collapse of a previous initiative, Jamaica's new agriculture minister Chris Tufton is planning another billion-dollar five-year go at resuscitating the island's sickly dairy sector.

He has come into the picture at a point when local milk production is at a two-decade low.

But Tufton plans not only to be smarter about his turnaround plan than when his predecessor Roger Clarke tried early in the decade, but feels that global conditions are in his favour to ensure success.

For instance, the lowering, if not total removal, of export subsidies from milk by European Union (EU) producers, has dramatically pushed up the price of the commodity to importers like Jamaica.

Exacerbated price pressures

At the same time, growing demand from big Asian consumers, particularly China, has exacerbated the price pressures.

Two years ago, for example, it cost Jamaica about US$2,200 to import a metric ton of skimmed powdered milk from Europe. Now, the price is over US$5,000 - a jump of nearly 130 per cent.

The bottom line, explained Tufton in an interview, is that the subsidies "used to provide us with an incentive " to import.

"We can't depend on that anymore," said Tufton. "So, anything that happens in the international market exposes our vulnerability."

The situation, though, is proving positive in another way - by providing a price point for milk at which Jamaican dairy farmers can compete.

Dumping milk

That is a far cry for five years ago when farms here were daily dumping thousands of litres of milk, for which they had no market and the Government was pushed to buy more than required for its school feeding programme.

The decline in milk production, on a downward slope for more than two decades, has accelerated.

The 14 million litres of milk produced in Jamaica last year was a third less than three years ago and was a mere 10 per cent of the milk consumed in the island.

The previous administration had sought to address the initial domestic glut of milk, and the industry's wider problems, by facilitating a plan by the Jamaica Dairy Farmers Federation (JDFF) to build a processing plant in Old Harbour, St Catherine.

The plant would produce powdered milk and other dairy products.

The Government guaranteed a US$10 million loan for the project, which was projected as a cooperative-type industry, but the initiative collapsed. Mismanagement was blamed.

Tufton hopes to do better under his plan, which he has at a cost of US$15 million (J$1.1 billion).

The deliverables include:

Increasing the breeding herd of dairy cattle from 10,500 to 17,860 specialised milkers, augmented by 1,000 dual purpose cows from the traditional beef herds;

An additional 11,140 specialised milkers will come into production during the subsequent five years.

Improving pastures, whose acreage would increase from 5,100 hectares to 6,400 hectares by 2012 and to 9,670 by 2017.

Increasing milk production from the current 14 million litres to 31 million litres per annum by 2012 and to 54.5 million litres by 2017.

This, of course, would have to be underpinned by importing cattle and selected breeding, training farmers, strengthening initiatives against farm thefts, and revamping the government's school feeding programme to use more locally-produced milk.

"It is a medium-term programme," Tufton said. "It can't happen in a year or two."

Balteano Duffus, the general secretary of the Beef and Dairy Farmers Association (BDFA), likes the idea, but is holding the applause until he sees words moved to concrete action.

"The revitalisation of the dairy subsector is long overdue," said Duffus.

"We have been agitating since 2005 for the rebuilding of the sector. The dilemma which it now faces is as a result of non-action by the former administration."

The Dairy Development Board (DDB), the government agency that monitors the sector argues that the global economic and business alignments make such a project viable.

"The significantly altered macro-economic environment, with respect to the international dairy market, is expected to persist well into the medium term," the DDB said in a recent report.

"This presents significant opportunities for new investments in the local production of milk."

Beyond the hard economics, Tufton argues that the issue of food security makes this a project that Jamaica should undertake.

"Certainly, as it relates to dairy it is very critical because it is an important form of protein," he said. "And we are vulnerable now because we don't produce enough for the market."

john.myers@gleanerjm.com

The revitalisation of the dairy subsector is long overdue. - File