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Gumboot Diplomacy

5th June 2013 by Reuben Levermore, Manila | 4 Comments

Although agricultural production in the Philippines is more often associated with tropical fruits, including the bananas stocked in New Zealand supermarkets, dairy farms are found across much of the country. Most dairy farmers in the Philippines have very small herds. The national herd numbers around 20,000 compared with over 6 million in New Zealand.

NZ dairy consultant Keith Milligan talks to Pastor Roger Alcantara of the Batangas Christian Dairy Cooperative

NZ dairy consultant Keith Milligan talks to Pastor Roger Alcantara of the Batangas Christian Dairy Cooperative

 With a small dairy production base, the Philippines is reliant on imports to meet its dairy consumption needs.  Accordingly the Philippines is a key market for New Zealand dairy exports, our third largest in Asia.  And Filipinos are an increasingly important part of that industry in New Zealand as dairy workers and farm managers the length and breadth of the country, including Filipino dairy farm manager Neil Molina who was recently named Otago’s dairy farm manager of the year.
 
New Zealand has also committed to helping the development of the Philippine dairy industry. The Embassy has been working alongside the National Dairy Authority and local dairy industry partners to agree the terms of a dairy development project. During President Aquino’s state visit to New Zealand in October last year, Prime Minister John Key announced $NZ 5.3 million of support over five years for the Philippine dairy industry.
 
The project will focus on two regions in the Philippines where dairy is already established: Northern Mindanao and the “CALABARZON” region that surrounds Manila.  Given the small size of the Philippine dairy herd, a project of this scale should be able to make a significant impact on milk production in these regions if it is well focused.
 
In recognition of the importance of the Philippines as a dairy partner, Theo Spierings the CEO of Fonterra, New Zealand’s largest dairy company, and Rod Quin the CEO of Westland Milk, recently visited Manila to connect with industry and government figures.  During the visit, both CEOs expressed their support for the Philippines-New Zealand dairy project.
 
As New Zealand dairy farmers will attest, dairying can be a complicated and capital intensive business.  And as New Zealand dairy farmer Rob McCredie told delegates at the national Dairy Congress in Bacolod in late January, dairy calves are like babies, and need constant attention.

Ambassador Levermore at the National Dairy Congress with Rep. Mark Mendoza, Chairman of the House Committee on Agriculture and Juan Lozano, Chairman of the National Dairy Confederation

Ambassador Levermore at the National Dairy Congress with Rep. Mark Mendoza, Chairman of the House Committee on Agriculture and Juan Lozano, Chairman of the National Dairy Confederation

McCredie, from the famous Waikato dairying region in New Zealand, provided tips to delegates on calf rearing and nutrition. Having initially come to the Philippines for a one week visit, he is still here over one year later.  McCredie’s encouraging message to the Congress was that he believes the Philippines has great agricultural potential, and in dairy he sees great scope for farmers to lift their milk production.  He told the Congress that during his one year in the Philippines, he had lifted milk production by over 50% on the farm he is working with in Laguna, not far from Manila.
 
If the Philippines-New Zealand dairy project can achieve results like McCredie’s then the return to farmers will be healthy indeed. Prices per litre of raw milk in the Philippines fetch between 20 to 28 pesos (NZ 58 to 81 cents), which is higher than the New Zealand equivalent.  Although imports account for over 98% of dairy product consumed in the Philippines, the fresh milk produced by the local industry is in demand,  be that for latté coffee at Starbucks or fresh butter at Manila’s top hotels.  And fresh milk is a niche that cannot be filled by imports from faraway New Zealand.
 
As the Philippine economy continues to grow, and as incomes rise, so too will demand for milk which is well recognised as an important source of nutrition for growing children.  Fonterra estimates that the world population will consume an additional 100 billion litres of milk by 2020, but that farms in New Zealand will only meet something like 5% of that total.

Fonterra CEO Theo Spierings proposes a milk toast with Ambassador Levermore and Trade Commissioner Hernando Banal at the Experience NZ fair in Manila on 16 May

Fonterra CEO Theo Spierings proposes a milk toast with Ambassador Levermore and Trade Commissioner Hernando Banal at the Experience NZ fair in Manila on 16 May

As demand for protein continues to soar, farmers in New Zealand, the Philippines and elsewhere have a common interest in seizing the opportunity that this represents.

4 Responses to “Gumboot Diplomacy”

  1. Stuart Walbridge Stuart Walbridge says:

    Thanks for posting this, Reuben. Its a great example of two-way of two way flow of trade, investment and people that benefits both nations.
    Stuart Walbridge
    Chair
    ASEAN New Zealand Combined Business Council

  2. Walter Ty Walter Ty says:

    Good write-up – considering Fonterra’s involvement in the Philippine market from the 1960′s (through its New Zealand Dairy Board predecessor’s tie-up with San Miguel Corp. in the local manufacture & retailing of Anchor butter), it’s good to remind the public of long-standing N.Z.-Philippine commercial ties.

  3. Reuben Levermore Reuben Levermore says:

    Thanks for your comments Stuart and Walter. I mentioned in the blog Filipino dairy farm manager Neil Molina. Here’s a link to a nice TVNZ piece about him and the farm that he manages in the beautiful Maniototo region of the South Island. Filipinos are making their mark in NZ.

    http://tvnz.co.nz/seven-sharp/filipino-powered-farms-video-5456760

  4. Walter Ty Walter Ty says:

    Reuben, that TVNZ video about Neil Molina & other Filipinos with their respective families seeking a new life in Maniototo is an eye-opener. A lot of Filipinos who have traveled to NZ as tourists would never contemplate residence there – too quiet & perhaps boring. That speaks volumes of Filipinos as social animals who don’t crave solitude, with the odd exception. Personally, I wouldn’t mind taking up NZ residence but I am kind of old (at 48) & I probably wouldn’t be a economic asset to Aotearoa.

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