Noose around dairy industry’s neck
Rory Rostant Thursday, October 9 2003
Dairy farmer Chris Medford treats his cows like royalty. By 5 am everyday he is on his farm, and twice a day, come hell or high water, his animals are milked at 6 am and 3 pm. It’s to keep mastitis, a form of bacteria away, he said. Faced with what is percieved as government apathy and an industry that is sinking like a stone, he, along with the other dairy farmers plod on.
“It is too basic a business to allow government to replace it with imports,” said Medford in an interview on his 20-acre farm in Carlsen Field in Central Trinidad, five of which are not arable. “The industry is at a cross roads,” he said. Minutes before, he faced a barrage of questions from farmers who came to see first hand what he was doing right. The visit was organised by the Agricultural Association of TT. “We are out own worst enemy,” he told them under a shed on the farm. “We have to speak with one voice.” Farmers, he said, have to unite. Nestle purchases 99 percent of the milk produced by TT dairy farmers, and by Medford’s estimates that’s about 9 million kg per year, a drastic decline from years gone by. Prior to 1998, dairy farmers sold about 11 million kg of milk to Nestle, dairy farmers say. Farmers, he said, were hit hard when Nestle, citing economic reasons, claimed farmers were taking too long to get to the factory, and decided to restructure its operations. The milk, the company said, has to be at four degrees centigrade within three hours of leaving the cow.
As a result, the number of collection stations were reduced from 13 to two. These are at Carlsen Field and Wallerfield Field. But Nestle’s policy forced a lot of farmers out of business, Medford said. To help the ones who stayed in the business, the TT Dairy Association took over the collection station at Turure and upgraded the collection stations at Charlieville and Woodland in Penal. Medford still believes that the industry can sustain itself. An MBA graduate, Medford said the farm was passed on to him by his mother who owned it for the last 40 years. Since he took it over several years ago, he’s only been able to eke an existence out of it. He has three people employed on his farm, one of them his brother. “The profits are so small that you can’t pay for feed,” said Medford, who took up a 2000 US Fellowship to study in dairying science. “It is not economically viable,” he said, noting that the subsidies are a disincentive for farmers. He says govermnment’s subsidy to the industry is pushing farmers to the brink. Nestle charges $1.55 per kg of milk; government pays farmers $1 per kg.
Under world trade rules, subsidies can be lowered but not raised, and that says Medford is bad news for farmers because it means that government’s hands on subsidies are tied. Still, he argues that other sectors are getting money. “They are trying to squeeze us,” he said of government’s farming policies. “It’s like a noose around our neck.” For a high milk quality, Nestle gives an incentive of 18 cents per kilogram. That’s a total of $2.75, a paltry sum considering that a kilogram of mlik costs about $ 3.50 to produce. “We are losing money, it is not profitable,” he says solemnly. Noting that the EU and the US pump billions of dollars into their farming industries, Medford says government subsidy really does nothing for the industry. What galls him is the fact that the difference between what farmers sell the milk for and what it is retailed for on the TT market is the widest in the world.
From 1982-1997 retail price of milk rose from $2.00 to $5.50 per liter, he said. During that time, Nestle, he said, gave farmers price increases of 5 cents per kg over that 15 year period, he said. Medford is not waiting on goverment to inject life into the industry though. He’s brought in frozen semen, genetically altered, from Canada and US and also relies on high-breed cows that can hold their own in the international arena. The result? One cow on Medford’s farm can produce about four gallons of milk, sometimes six, but the average cow in TT gives 1.5 gallons a day. To keep production costs low, “you need good grass,” he said, but with such a dry rainy season things look bleak. What Medford would like to see is a level playing field. He points to the example that Barbados turned back a Nestle container on the grounds that it did not meet their (Barbados) standards. Consultants despatched to TT found that that cows were milked manually, not mechanically. The result is that Nestle is virtually shut out of the Barbados market, Medford says. But because of TT’s penchant for opening its doors to trade, Pinehill milk products are found on TT shelves, he said. “Why can’t we send consultants there to find out how their milk is made?” he said, noting that TT does not know whether cows in B’dos are milked mechanically or manually. “We have to find ways to protect our market,” he maintains, even in the face of free trade.
Asked about the future, he was pessimistic. “Agriculture will die when the present farmers die out,” he said. Most farmers, he lamented, don’t have the technical know-how to run a farm. Moreover, they are still caught in the dark ages on how to run a farm. Some still milk their cows with their bare hands.