ICAEM2015

ICOOP2015

The Joint International Conference on Agribusiness and Cooperatives Theme: The Future of Agribusiness and Cooperative Enterprises: Examining Local and Global Contexts

CITATION Acuña, Thaddeus R.*, Nikko L. Laorden, and Jerelyn C. Balabag. 2015. “Developing Dairy Goat Industry as a Sunrise Industry in the Country: A Look at the Issues and Challenges in Davao Region and Northern Mindanao.” Paper presented at the Joint International Conference on Agribusiness and Cooperatives, Davao City, Philippines, 14–16 October. OPEN ACCESS POLICY This material was presented during a conference organized by the Institute of Cooperatives and Bio-Enterprise Development (ICOPED), College of Economics and Management, University of the Philippines Los Baños, and the Office of Research of the University of the Philippines Mindanao. In support of the open access initiative, the organizers provide unrestricted access to these materials to foment wider dissemination and exchange of ideas. Authors are encouraged to practice selfarchiving of their presentations for public use in a noncommercial repository. Copyright of this uploaded material remains with its author. For more downloadable materials, visit http://ojs.upmin.edu.ph/index.php/supplements

Developing Dairy Goat Industry as a Sunrise Industry in the Country: A Look at the Issues and Challenges in Davao Region and Northern Mindanao Acuña, TR Laorden, NL Balabag, JC 1

Acknowledgment Philippine Council for Agricultural, Aquatic, and Natural Resources Research and Development (PCAARRD) 

Socio-Economic Research Division



Livestock Research Division

2

Objectives of the tS udy to assess current situation of the dairy goat industry in Davao Region and Northern Mindanao to identify key internal and external factors in the dairy goat industry that affect its development as a sunrise industry to develop recommended strategies that will boost development of the dairy goat industry

3

Significance of the tS udy 

Government to determine appropriate interventions and/or strategies that will:  further expedite development of the dairy goat industry, particularly in the areas of study  provide the enabling environment to enhance support to the industry



Basis for commercial players to further assess the potential of the dairy goat industry



Academe and other research institutions to continuously pursue researches especially in areas covering building social capital, business modeling, and product, market and technology development 4

Analytical Framework Input Output Model INPUT

PROCESS

Environmental Factors External Factors  Opportunities  Threats & Challenges

S

W O

T

Analysis

OUTPUT Formulated Interventions & tS rategies

Gov’t & rP ivate o C llaboration

Strategy Formulation

Internal Factors  Strengths  Weaknesses

Dairy Goat Industry Feedbacking

Framework by Acuna, et.al., 2015

5

Methodology 

SWOT Analysis  identification of external & internal factors  Strategy formulation



Areas of studies (Davao Region & Northern Mindanao)



Primary  Key informant interviews of key players across the chain (DGC, commercial DG raisers in the area)



Secondary

6

Results and Discussions

Regions’ DG Industry Situationer

Source: BAS, 2013

7

Results and Discussions

Regions’ DG Industry Situationer LOW Dairy Goat Inventory and Milk Production in Davao Region & Northern Mindanao (January-November 2014, NDA) Davao Region Provinces

Total Herd Inventory

Northern Mindanao

Milking DG Milk Does* Prod'n**

Provinces

Total Herd Inventory

Milking Does*

DG Milk Prod'n**

Davao del Sur

341

145

34.65

Bukidnon

174

71

14.64

Davao del Norte

231

56

15.31

Misamis Oriental

710

147

20.42

Davao Oriental

2,233

533

143.14

Totals

884

218

35.06

ComVal

449

49

17.05

Davao City

484

123

45.22

3,738

906

255.37

Totals

*highest no. of milking does on the milking line ** in thousand liters • Source: NDA

25% 24% 8

Results and Discussions

Regions’ DG Industry Situationer 

Limited DG milk producers with low volume of regular DG milk production



Low milk yield per milking doe (average 0.8-1.5 li/day)



High cost of quality breeds



Limited/inconsistent supply of goat feeds (e.g. quality forages & high protein/energy concentrates to supplement forages)



Lack of firm-based direction (breeder or milk-based production?; Shift of product concentration from DG milk to breeder)



Poor performance of ‘dispersal program’ (difficulty of finding smallholder DG raiser in milk production is an indicator) 9

Results and Discussions

External Factor Analysis OPPORTUNITIES 

World Value of fresh goat milk – 17.8 M tons in 2012



Steady production growth @ 2.2%



Asia as top market accounting 55% of total import volume



Multi-billion Halal market Sources: FAOStat, 2014; NDA, 2013

10

Results and Discussions

External Factor Analysis OPPORTUNITIES 

Distinct nutrient content as comparative advantage over DG goat milk

Results and Discussions

External Factor Analysis OPPORTUNITIES 

High value & Premium goat-milk based infant formula (e.g. DGC = US $- 96M)



High demand for high value & premium DG milk-based cheese products (US, Europe & Middle East)



Untapped local market (infant fomula)

12

Results and Discussions

External Factor Analysis THREATS/CHALLENGES 

High cost of investment requirements (stocks of quality breed; housing facilities; forage production area; equipment & technologies)





Higher production growth rate of top 5 producing countries (India, Bangladesh, Sudan, Pakistan France at 2.7%)

High ‘barrier to entry’ (high investment requirements; stiff competition; low volume supply)

13

Results and Discussions

Internal Factor Analysis STRENGTHS 

Government investment priority (National Dairy S&T Program; DG Industry Road Map)



Insufficient/low volume of production



Top 6 DG producing regions



Lone producer of high value/premium DG milk-based cheese product in Davao Region

14

Results and Discussions

Internal Factor Analysis WEAKNESSES 

Absence/weak industry- and firm-based business model



Low production efficiency; low investment in production technologies



Dependence on government support; reliance on private investment



Lack of value-based approach to strategic plan

Amalgamation of divergent dairy goat cooperatives in NZ

15

Conclusion



High global value of DG milk products coupled with low production in the domestic level present a great opportunity for local DG raisers to take advantage of



Thus, it can be considered DG as sunrise industry

16

Conclusion

How do local DG raisers do it? What needs to be done?

17

Recommendations adopt a business model: ‘big brother, small brother’ approach; the government to initiate investments to DG industry Enabling environment Fiscal Assistance & Incentives to spur investment Provision of continuing industry-focused ‘Big brother, Small brother’ R&D

Government

Selected DG Commercial Raisers ‘Big

Small DG Raisers

brother, Small brother’

Private-initiated ‘dispersal’ project; technical assistance; counterpart requirement Product consolidation (‘Big Brother’ as consolidator)

Recommendations 

Need for government-initiated investments to DG industry  Quality breeds  Modern technologies and facilities  Industry-oriented R&D



Fiscal assistance/incentives to DG commercial raisers  Selective approach – limited to qualified big commercial raisers



Develop premium product  Concentrate to 1 product only (cheese); expand product when sufficient supply is attained



Develop long-term expansion plan  Successful DG commercial raisers to implement its own ‘dispersal program’ to selected and qualified small raisers  Consolidate & integrate

End of Presentation. . .

20

D1 Acuna.pdf

presented at the Joint International Conference on Agribusiness and Cooperatives, Davao City, Philippines, 14–16. October. ... river stones etc.). ... FM-M-6040 F.

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