Milking a grand venture for all its worth

By Linda Bolido
Philippine Daily Inquirer

AFTER making a name in different fields, a group of businessmen have now gotten together to venture into something completely different from what they have been doing for most of their productive lives.

Led by the son and namesake of the late President Ramon Magsaysay, the group set up the Real Fresh Dairy Farms Inc. (RFDFI) in Bay, Laguna, near the Dairy Training Research Institute (DTRI) of the University of the Philippines Los Baños, from which they learned the technology.

The farm makes Holly’s (from Holstein, the breed of the milking cows) Really Farm Fresh dairy products, such as milk, chocolate drink, kesong puti, butter, cream, mozzarella and, occasionally, yogurt.

It has developed a symbiotic relationship with DTRI. The farm uses the technology and draws from the expertise of DTRI people and has its products processed there while students get to do field work in a real working dairy enterprise.

Retirees

Half of the partners are retirees who, like former senator Ramon Magsaysay Jr., are also looking for something new and different. All of them have very little or even no previous experience at all in cattle ranching, much less dairy farming.

The partners – Magsaysay, Danilo Katigbak Dimayuga of Lipa City, Ralph Casino of Iligan City, Felipe Bince of Pangasinan, Jose Eduardo Arroyo of Pampanga, Rey David and Sofronio Larcia – got to know each other through their jobs or businesses or their wives.

For these entrepreneurs, the process of learning a new business venture is as exciting as, probably even more exciting than, the result.

Successful businessmen that they have been and are, they do expect to turn in a profit –eventually. But for this group of intrepid men, the new venture is more than just an exercise to show they still have the savvy and the smarts to succeed. It is also a practical way to promote an advocacy and help people.

Dimayuga, company president, said very few people were venturing into this business so they wanted to encourage and help farmers by introducing them to new technology to reduce reliance on imports.

The National Dairy Authority (NDA) said dairy products were the country’s second largest agricultural import after wheat. Some 99 percent of the country’s dairy requirements came from abroad. In 2007, NDA estimated total domestic dairy requirements to be about 2.635 million metric tons (MMT) and growing at about 2 percent yearly.

Dimayuga said current estimates placed total annual dairy imports at $500 million. Thus, increased local milk production will mean considerable savings in foreign exchange.

And the partners, particularly Magsaysay, would like to see Filipinos, especially the young, develop the habit of drinking milk, not just to reduce import costs but for health reasons. Magsaysay, who said milk helped him survive childhood illnesses, said it should be a basic food for Filipinos being full of nutrients.

Through the dairy farm’s produce, the partners hope more and more Filipinos will taste the true goodness of fresh milk and develop a taste for it.

Inadequate feeding

The need for new and local players in the dairy market is underscored by the NDA that said, “Despite continuing government and industry efforts to increase dairy production, Philippine milk production remains at less than 1 percent of total dairy requirements with import filling most of the supply.”

Data from the NDA showed that the country produced 13,320 metric tons of milk in 2007 but local production accounted for less than 1 percent of the total annual dairy requirement.

Although there had been an increase in the number of dairy animals, the average milking capacity per animal remained low, the NDA said, due mainly to inadequate feeding and poor animal management practices. This is why the introduction of new technology is paramount.

Bold experiment

The Real Fresh group realizes their farm, no matter how big it gets, cannot possibly reach out to everyone. So the bold experiment has other objectives. First, the partners want to demonstrate that good management can make an agricultural enterprise successful. Then, convince people they can make money from dairy farming and encourage small farmers and entrepreneurs to go into the business themselves.

Magsaysay said he and his friends wanted to test their theory that good management and efficient marketing, plus sound agricultural practices – right breed of cow, right feed, dedicated cowhands and farmers, state-of-the-art technology and competent veterinary medical support, with some private capital and assistance from the NDA could make the “learning curve” painless.

“We would like our own workers later on to start their own farms, using the technology and management skills they learn from the [RFDFI], for their own ventures,” Magsaysay said. The individual farmers could then tie up with their former employer in a cooperative or a consortium or whatever arrangement would be most practical and profitable for everyone.

The group also hopes to develop a solid customer base to be viable in three to five years. At the moment, Dimayuga said the company produces about 3,500 liters of raw milk a week, the bulk of which goes into fresh and low-fat milk. They hope to ramp up production to 8,000 liters by the end of the year.