Raf SomersVietnam Belgium Dairy Project

Brussels, 23 Nov 2016

Collaboration with the Private Sector in Vietnam

Vietnam Belgium Dairy Project

Main activities:

1. Increase productivity Training of farmers Introduce practical innovations Strengthening Vet and AI services

2. Improve milk quality control and payment

3. Link Public and Private sector to enhance sustainable dairy development: Dairy Vietnam (www.dairyvietnam.org.vn)

Smallholder dairying in Vietnam

HF & HF cross breeds

Average farm size:5-10 animals

Cut and carry

Traditional forage: Elephant grass (Pennisetum Purpureum)

Milking

Milk Collection Center (MCC)

One price for the group

Processing Company

Farm

Farm

Farm

Farm

Farm

Milk Collection

Center

Milk flow Payment

Quality testing

Milk collector

Result of a group price

Farmers are not encouraged to produce good quality milk

Bad farmers cannot be identified

Penalties are shared among farmers

Milk collectors always take their ‘collection fee’

Relationship between farmer and collector often determines the milk price for each farmer

Our philosophy

Milk Quality can only improve if:

Better quality milk receives a higher price

Quality is tested for each farm!

Video “Fair Payment”

The story behind the scene…

The project became middle men We bought milk and

paid individually based on our test (done by the milk collector)

We sold milk to VINAMILK based on the quality of bulk tank

Processing company did first not want to pay individually!

Software

Software

Field data

(Kg, Fat%, SNF%)

Laboratory data

(BCC, SCC, AR)Farm Evaluation

Individual payment for farmers

A new Public Private Organization

Bringing stakeholders around the tableA trustworty source of information

Promoting domestoc milk production

“More Safe Milk From Profitable Farms”

Video Dairy Vietnam

The story behind the scene…

Dairy Vietnam did not survive after the program ended…

The staff was dedicated, the private sponsors were ready to continue to pay…

A challenge to find to ‘correct’ legal status

But in the end, the SC did not allow Dairy Vietnam to become an independent organization -> it was put under the Department of livestock of the Ministry

Staff was no longer motivated Sponsored lost interest

A missed opportunity … because of trying to be “bilaterally” correct

Thank you for your attention !

The following slides were not presented but provide more info

Individual price

Based on components of the milk (FAT%, SNF%)

Penalty for poor quality high bacteria antibiotic residue

Bonus for good practices Farm evaluation Low Somatic Cell Count

Stimulating growth! Farmers are encouraged to produce

better quality milk because of the better price

Actions to produce better quality will also result in better productivity!

Quality testing Components of the milk (FAT%, SNF%, added water)

tested every delivery by milk analyzer

Bacteria (MBT), antibiotic residue (Delvo test) tested every 14 days in the laboratory

Farm evaluation, somatic cell count (DCC) every two months in the farm & laboratory

PENALTY

BONUS

BASIC PRICE

New equipment

Introducing IT solutions in the milk collection centers:

Electronic scale Milk analyzer Smart cards Microprocessor

We know the exact amount + quality of each farmer

picture transfer milk from milk can to scale

Payment to farmers

Bank transfer (farmer’s choice!) Clear feedback 2x per month Bank get an insight in the creditability of

farmers

Milk collectors only receive a collection fee!

Evaluation of Phase 1 Good farmers highly appreciate our

system Good milk price Bonus for good farming practices Fair and transparent Clear feedback Timely payment

Thanks, my dear

Evaluation Phase 1 Bad farmers

Angry when they receive individual penalty

Complain that penalty period is too long

Cannot receive bonus

Evaluation of Phase 1

Milk Collectors Many are not so happy Less profit than before

(before they could easily cheat!) They do receive a very fair price, but many do

not want to work honestly and they don’t like to be controlled

Still allow bad quality milk to go into the bulk tank because they worry to lose farmers

Only the processing company can successfully control the milk collectors!

Evaluation phase 1 Processing company: high appreciation!

Want to intensify the collaboration with the project

Report that our milk quality is better than in other regions

They already apply the lessons learned in other MCC

Individual testing Individual payment

Evaluation Phase 1However, some processing companies still

accept milk with added water pay a too high price for

poor quality milk

Bad farmers and collectors can still easily sell their milk elsewhere.

Need for National Legislation!

Phase 2: Improvements

Put one quality control staff in each MCP

Collector does not perform quality control anymore

Perform more tests in the MCC Increase frequency of testing

For bacteria: daily methylene blue test For antibiotic residue: daily fermenation test,

confirmation by delvo or copan test

Reduce the penalty period

Repeatability? The equipment is only a tool, the intentions are more

important: individual testing individual price

We want to set an example for farmer organizations processing companies governments

Raise awareness about the need for: Transparent quality control National legislation

Recommendations

1. Companies should make sure that farmers understand the basics about milk quality:

• Milk composition (Fat, SNF, protein, ...)• Added water• Bacteria• Residues• Somatic cells

Recommendations

2. Limit as much as possible the role of intermediates between farmers and processors

In Vietnam, we recommend that the processing company has a quality control staff in each MCC

3. Always do a good acceptance test • inspection of milk can (material, cleanliness)• organoleptic test (look, smell) • density test (added water)• alcohol test (bacteria, colostrum)

Recommendations

4. Basic tests can be done daily in the MCC Bacteria: dye reduction tests (Methylene Blue,

resazurine) Cheap but only a rough indication Many false negatives! (This gives the wrong

impression to farmers that the milk is good...) TPC is much better, but needs to be done in a lab and

takes a lot of time

Antibiotic residue: fermentation test cheap best is to confirm positive result by Delvo or Copan

test

Recommendations

5. Milk composition: Basic milk analyzers can be

placed in MCC: close to farmer (transparent) can detect added water easily

BUT they need a lot of maintenance and spare parts!

In many locations it might be better to test the composition once every 14 days in a central place or with a mobile unit.

Recommendations

6. Somatic cell count: Interesting information for farmer! Bonus for low SCC stimulates good hygiene

practices On farm: CMT test (info about each quarter) In the MCC: DeLaval Cell Counter

exact number relatively expensive per test (about 2 usd/test ) machine can be transported from MCC to MCC

Recommendations

7. Penalty Farmers should understand

why they receive penalty Farmers prefer more regular

testing and shorter penalty period

Penalty should be balanced with bonus

Farmers and Collectors should receive penalty for their faults, not for someone else fault!

Recommendations

8. Infrastructure in MCC Many poor quality cooling tanks Frequent power cuts

Consider cooling tanks with an ice bank Short power cuts have no effect on quality Milk cools down faster (below critical 10°C) Use cheaper electricity at night to make ice

Recommendations

9. Cleaning protocol Milk cans & cooling tanks

need to be cleaned following the 4 principles of good cleaning:

Time Temperature Physical action Chemicals

Acid to for protein Alkaline detergent for

fat

Content Vietnam Belgium Dairy Project Smallholder dairy farming in Vietnam Importance of individual quality control Our intervention around Hanoi, Vietnam Lessons learned Recommendations

New Forages

Bracchiaria mutica

Avena sativa Panicum maximum

Australian Mix

Innovations

Silage bags

Sprinkler irrigation

Calf rearing practice

Heat stress solutions

Milk transport to factory

Dairy Industry in Vietnam Dairy smallholders produce more than 90 % of the milk The informal market is small (about 10%) Popular dairy products are flavored milk, yoghurts and ice cream Self supply in Vietnam is only 20%

Milk collection from smallholders

Dairy processors often struggle to collect the milk from smallholders

poor quality milk small volume scattered farms difficult to do quality testing Almost no functioning cooperatives

Smallholders often receive a group price Collectors earn too much compared to the farmers