Dairy in Sri Lanka

Dairy Industry in Sri Lanka

Sri Lanka has a total area of 65610 sq. km. Of this, around 2 million hectares or 30 percent is agricultural land. Almost 75% of agricultural land is smallholdings and the rest under estates. The number of smallholding is estimated at about 1.8 million and of this 90 % are less than 2 ha in extend. Approximately about 70% solely devoted to crop production, the remaining has a mixture of crops and livestock and few cases only livestock.

Sri Lanka is mostly self-sufficient in most animal products – apart from dairy. However, the consumption of dairy products has increased dramatically since the 1970s when the Government adopted open economic policies. Currently, Sri Lanka is about 15–20 percent self-sufficient with its milk products, though that level has been achieved mostly with imported milk powder. The dairy industry has potential to contribute considerably to Sri Lanka’s economic development. A traditional industry surviving thousands of years, milk production also plays an important role in alleviating nutritional poverty in all age groups. In addition to that, it is a source of extensive employment opportunities for rural community (FAO).

The Agriculture, Livestock and Forestry sub sector grew slightly by 1.3 percent and the Fishing sub sector decreased by 3.8 percent in the first quarter of 2015 compared to that of the first quarter of 2014. (Census and Statistics, 2015)The Government’s ambitious target for growth in dairy production is an increase towards 50 percent self-sufficiency in milk products by 2015. At the current growth rate of 1–2 percent, the sector will need to grow at about 15 percent annually for the next eight years, with no increase in total consumption. This is a challenging task, given the current state of the industry, which only supplies approximately 20 percent of the domestic requirements.

The contribution of the agriculture sector, including plantation crops, livestock, forestry and fisheries to GDP was 16.8 percent in 2006, having dropped from 21.3 percent in 1998 (Central Bank of Sri Lanka, 2007). With almost 90 percent of the population considered rural (Central Bank of Sri Lanka, 2006), 2005 data show that agriculture provided employment to 30.7 percent of the population. Livestock accounts for only about 1.2 percent of GDP, but it is an integral part of many other agricultural enterprises providing draught power, transport and dung for fertilizer. The sub sector of Livestock production grew by 6.4 percent in 2012. The growth of this sector was 6.4 percent in 2012. The growth of this sector was 7.3 percent in 2011. This growth of this was 7.3 percent in 2011. This growth was supported by the production increase of eggs, chicken and milk. The milk production recorded an increase from 258.3 million liters to 299.02 liters for the year 2012 which implies 15.8 percent (Census and Statistics)

Dairy sector is the most important of all livestock sub sector. This primarily because of the influence it can be contribute to the rural economy. Sri Lanka imports about 65000 MT of dairy commodities, mainly full cream milk powder, and dairy development is therefore seen as an instrument to replace this large volume of imported commodities and also to generate rural employment. The domestic milk production only constitutes about 17% of the requirement and the rest is imported. The government attention is most focused on the dairy sub sector; to develop this sector into a local industry. The government policy on dairy development is aimed at producing 50% of country requirement of milk by the year 2015.