The minister explained a specific program has already been implemented for this purpose.
He added the government will not intervene in the importation of dairy cows to Sri Lanka, and land will be given to private entrepreneurs for raising dairy cows.
The Minister stated about 40% of the annual liquid milk demand in the country is produced locally and the rest is imported as milk powder. He said currently about 300,000 suppliers in the country collect liquid milk.
The Milco and Pelwatte dairy companies are using locally-produced milk in the country.
Milco is a Sri Lankan government owned dairy company, while Pelwatte is a Sri Lankan owned firm. Pelwatte said Sri Lanka’s annual expenditure on milk imports is $300m.
Foreign dairy companies including Fonterra and Nestlé are active in Sri Lanka. However, according to the FAO, most processors use imported milk powder for their products, except Nestlé, which purchases significant quantities of milk powder using locally-procured milk.
In a 2007 FAO report, it was stated that Sri Lanka was aiming to be 50% self-sufficient by 2015. It added imported milk powder has been controversial because it is subjected to low tariff measures in order to keep consumer prices low. The organization said the only way to increase dairy productivity is for the Government to increase the tariff on imported milk powders from the present 10 to 30%, which is unlikely due to World Trade Organization commitments.
