DAIRY ENTERPRISE DEVELOPMENT IN NUEVA ECIJA: THE NEFEDCCO EXPERIENCE

Presented during the Weekly Forum Meeting of MAP ABCD Foundationat Room 1, Parish Center, Sanctuario de San Antonio

Mckinley Rd., Forbes Park, Makati CityJune 16, 2009

Nur M. BaltazarCBED Coordinator, Operations GroupPhilippine Carabao Center

The Local Milk Market

131131ImportersImportersTradersTraders

ProcessorsProcessors

AUSNZ

USATHAI

Source: National Dairy Authority, 2007.

MILK DEMAND & SUPPLY MILK DEMAND & SUPPLY PHILIPPINE SITUATIONPHILIPPINE SITUATION

TOTAL DEMAND REQUIREMENT

2.1B2.1BLITERS

ANNUALSUPPLY

1.4B1.4BLITERS

LOCALLOCAL

99%IMPORTS

Source: National Dairy Authority, 2007

Livestock population (head) 9,826,951Cattle 2,523,570

Carabao 3,391,259

Goat 3,912,122

Total dairy herd (head) 28,395Cattle 13,092

Carabao 13,648

Goat 1,655

Total dams and does 13,255Cattle 5,210

Carabao 6,820

Goat 649Number of Producers-Farm Families 14,300Number of primary cooperatives

and institutions 315

Source: National Dairy Authority, 2007

LOCAL DEVELOPMENT CONTEXT

Strategies

1. Infusion of Purebred Dairy Herd

- establish a nucleus farm;

- as the sources of selected breeders to be dispersed as “incubator modules” in communities;

- nucleus herd will produce milk to contribute to local supply; and

- second generation female progenies shall contribute to milk production in an increasing mode

Source: PCC,2006. Dairy Development Plan 2007-2020

2. Utilization of Purebred Bulls as Semen Donors for AI

- Selected top performing bulls from the nucleus herd shall be utilized as semen donors for use in the National AI Program;

- Priority allocation of semen shall be given to areas where herds of purebred and upgraded dairy buffaloes exist.

Strategies

Source: PCC,2006. Dairy Development Plan 2007-2020

Strategies

3. Utilization of Purebred Bulls for Widescale Bull Loan Program

- Purebred bulls not selected as semen donor shall be loaned out under the “Bull Loan Program” for use in wide-scale crossbreeding with native carabaos

- Female crossbreds for milk; Male CBs for meat

Source: PCC,2006. Dairy Development Plan 2007-2020

Strategies

4. “Businessizing” theSmallholders

- “incubator modules” shall be organized into primary producer cooperatives & federations

- facilitate transfer of technologies to individual farmer-producers, and creation of systematic milk collection and marketing

- Effective collaboration in product & market matching

- Establishing milk and dairy processing as well as marketing facilities

Source: PCC,2006. Dairy Development Plan 2007-2020

N/RIZ Development Framework

ProductionProduction ProcessingProcessing MarketingMarketingüWilling & capable coop members w/ full interest in dairying

ü2 yr.old heifers @ 300 kg body wt.

üNative carbaos & crossbreds (at least 100 breedable females)

üUniform animal health care & mgt.

ü3.5 to 5 li of milk/dam for 10 months

üWithin 30 km radius from CMPP

ØCoop-led milk collection

ØCMPP owned & managed by federation of dairy producers’ coops

ØMilk produce pasteurized or processed into saleable products

üMilk products sold to local processors/buyers or through PC Centers

üSales through Institutional Outlets in partnership with NDA, DECS, DOH, DSWD, & LGUs

üThrough Malls, etc.

Support ServicesSupport ServicesAI & Vet. Services, SIBS, Market linkage, Credit access, IECs, Tech. Training, forage planting materials, value-adding technologies on milk & milk products, etc.

Nueva Ecija

ü 14 municipalities/citiesü 37 barangaysü 36 cooperative-partnersü 928 farmer-recipientsü 54 dairy modules ü1,350 purebred BMBs on loan

•The largest province in Central Luzon. Major source of income: rice, corn, onions, vegetables and sugarcane.

•145 km away from metro manila

•550,718 hectares of the total 1,823,085 hectares of Region 3.

National impact zone (NIZ) for dairy buffalo development launched in Dec 1999 now has the following:

MILESTONES• In January 2002, nine (9) cooperatives initiated formation of

NEFEDCCO (Nueva Ecija Federation of Dairy Carabao Cooperative

• Secured CDA Registration Certificate on May 22, 2002 : PGA-KAT-066

• Obtained DTI Business Registration Certificate on June 14, 2002 : P-III-02- 016442

• Mayor’s Permit – 0603 (renewed every year)• Milk processing plant constructed in 2003• Brand Name: Cremeria Ecijana • BFAD License No.0056249• BAR CODE• Additional office and stock room facility in 2005• Participated as supplier to the Milk Feeding Program

sponsored by the National Dairy Authority (NDA) in partnership either with LGUs, DSWD, and DepEd having benefited a total of 18,751 malnourished children since 2002 to 1st semester of 2007

• Passed accreditation for cooperatives by LBP in 2005• NEFEDCCO Dairy Enterprise qualified for assistance from DAR-

ADB ARCP and LBP Type B Livelihood Package • Obtained marketing agreements with Shopwise, and Lugud MPC

in 2006• From 9 primaries during the organizational formation stage in

January 2002 increased to 26 member primaries and 5 associate member primaries to date;

• Managed to secure BIR Tax Exempt Certificate during the first semester of 2007

• Awarded Outstanding Cooperative of Nueva Ecija in 2005• Participated in numerous Trade Fairs & Exhibits either alone or

sponsored by DTI-Nueva Ecija, NEPG, DA, and PCC.• Share People through PEERS sent 3 Dutch Experts to assess

NEFEDCCO dairy enterprise for a period of 2 weeks in November 2007.

Milk Processing Facilities

NEFEDCCO’s Membership Profile

70%14%

16%

Member cooperatives

Non-member

Associate Members

Source: W.T. del Rosario, 2008. Cooperative Partner Performance at the NIZ

N=26

N=6

N= 5

Actual Flow of Milk Collection1. Angat Buhay 8. Sto. Niño2. Aglipay 9. SIPBUPCO3. Casile 10. Mabuhay4. San Vicente 11. CAMPCI5. Ciinense 12. Masigasig6. Rizal West 13. Guimba Ground7. Lakas Magsasaka 14. Young Farmers

100%

Magsasaka at Maggatas Baloc,Bagong Pag-asa 100% DVF

Premium Dairy 90% Others, 10% NEFDCCO

SMB, La Torre 100% Others

Cinense,UFPC, Palusapis, Nagpandayan,B. Silang, Collado 80% NEFEDCO, 20 DVF

Eastern PMPC , Puncan, Tagtagumbao 100%

Pulong Buli 50% NEFEDCCO, 50% DVF

Licaong 100 %

NEFEDCCO

Community

DVF

Alcala Candy, Cagayan

Others (Bulacan processors)

Source: W.T. del Rosario, 2008. Cooperative Partner Performance at the NIZ

NIZ for dairy buffalo development in Nueva Ecija

• 1,396 Female murrah buffaloes loaned out in 1999 to 2007

• 2,824 calves were produced as 2007 • 2,313,235kg raw milk produced valued Php74,023,514 (at

Php32/kg) from 2002 to April 30, 2009• Php69,397,044 gross income of farmers

• Php4,626,469 gross income of primaries• Php4,536,851 gross income of NEFEDCCO • 926 farmer-cooperators

Source: PCC Annual Reports, 2000-2007 and NEFEDCCO as cited by MADECOR Group, Inc. 2008; PSPD, 2009.

CHALLENGES

Farmer-participants

1. Maintain productivity of their dairy buffaloes

• 14-18 months calving interval

• Good animal health/body condition, with 3 to 4 BCS

• Mastitis-free

2. Milking their lactating animals 2x a day

3. Selling milk produce through their cooperative

4. Avoid selling their breedable buffaloes

5. Capital build up

CHALLENGESDairy Cooperatives

1. Monitoring performance of members’ dairy buffaloes

• Breeding date/s

• Calving date/s

• Milk production (daily/monthly)

2. Facilitating support services

• Vet. Services

• AI services

• Bull services

3. Milk quality assurance & collection

4. Selling milk produce through NEFEDCCO

5. Continuing herd build-up

6. Capital build up

CHALLENGES

Dairy Cooperatives . . .

6. Continuing herd build-up

7. Capital build up

8. Sustaining members’ enthusiasm in dairying

9. Dysfunctional Leaders

10. Mediation and/or conciliation

11. Financial recording & management

12. Sustaining organizational growth

13. Networking and mobilizing support services

CHALLENGESNEFEDCCO

1. Capital build up2. Strengthening its primaries 3. Mediation and/or conciliation4. Financial recording and management5. Sustaining organizational growth6. Making a positive turn-around of its dairy enterprise7. Payment of loans8. Timely payment of milk purchases from its primaries9. Networking and mobilizing support services

OPPORTUNITIES

1. Convergence for socio-economic development

2. Job generation

3. Policy formulation

4. Micro-financing

5. Jumpstarting local economies

6. Capital formation or savings mobilization

7. Local dairy development

8. Public image building

9. Financial Leveraging

MARAMING SALAMAT PO…

Base Animal Productio

n Zones

Animals for milk/beef

Dairy/Beef Production Zones

Metro Manila grid

Cebu grid

Cagayan de Oro grid

Davao grid

Dairy/Meat products

“Seeding” of purebred dairy buffaloes as “incubator” models

Carabao Sector Road Map (2003-2010)

3.3M

660,000 breedable females

• Preparedness to accept the project does not end after the Dairy Mgt Training – as well as upon transfer of BMBs/contract

• HH members participation was very evident (i.e. husband – animal mgt, wife – milking & marketing, children- grazing, forage collection)

Observations

Source: Maricel Gonzaga, 2007. RecipientsRecipients’’ profile and technical assistance at the national impact zoneprofile and technical assistance at the national impact zone

DAIRYZONES

PRIORITY 1

PRIORITY 2

• MILK FEEDING• BULL CALVES FATTENING

• BULL LOAN/UPGRADING

• MILK FEEDING• BULL LOAN/UPGRADING• EXTENSION MODULE

Source: National Dairy Authority, 2007

About 69% malnourished

Out of 12 M children ages 2-10:

MALNUTRITION…erodes the future generation

BEFOREOctober 2003

Poblacion, Manolo Fortich

AFTERDecember 2003

Poblacion, Manolo Fortich

THE MAGIC OF MILK FEEDING

ANGEL GRACE GALULA