Central Data Catalog

Citation Information

Type Working Paper - PPLPI Working Paper
Title The economics of milk production in Hanoi, Vietnam, with particular emphasis on small-scale producers
Author(s)
Issue 33
Publication (Day/Month/Year) 2006
URL http://r4d.dfid.gov.uk/PDF/Outputs/Livestock/PPLPIwp33.pdf
Abstract
The main purpose of this study was to gain insight into the household and farm
economics of small-scale dairy farms in Hanoi, and to obtain estimates of the costs of
milk production so as to gauge their potential for improvement, particularly through
policy action, and vulnerability to international competition in a more closely
interconnected world market. In order to ascertain possible developments in the dairy
sector and to broadly identify areas of intervention that favour small-scale dairy
producers, the study examines the potential to improve milk production of different
farm types. A case study approach is used, the aim being to obtain qualitative insights
rather than quantitative extrapolation.
Methodology
The methodology applied for the economic analysis was developed by the
International Farm Comparison Network (IFCN) and utilises the concept of typical
farms. Farm types are determined by regional dairy experts which take into
consideration (a) location of the farm, (b) farm size in terms of dairy herd size and (c)
the production systems that make important contributions to milk production in the
study region. Three farm types were selected for this study. The first type represents
the common small-size farms (2 cows); the second category (4 cows) was chosen to
represent the farm size that is closest to the statistical average, and finally, a third
farm type was defined to represent larger and more progressive dairy farms (5 cows),
allowing further exploration of potentials for economies of size in the region.
Management levels on the typical farms are average to slightly above average
compared to other farms of the same type. Data was collected using a standard
questionnaire and a computer simulation model, TIPI-CAL (Technology Impact and
Policy Impact Calculations), was used for biological and economic assessments.
Furthermore, method testing exercises regarding the dairy chain and policies affecting
the typical dairy farms were conducted. The methods tested are further explained in
their corresponding sections and/or the annexes.
Results
Milk production in Vietnam
Vietnam has a relatively short tradition both in milk production and consumption of
dairy products. However, from 1996 to 2002, milk production increased three-fold to
reach 78,450 tons. This growth over just six years is mainly attributed to a strong
increase in the domestic demand of dairy products coupled with very supportive
policies directed at the development of the domestic dairy sector.
The average milk yield per dairy animal increased by 35 percent over the last six
years, but the largest relative increase was recorded for the number of dairy animals,
which grew by 360 percent. Over 60 percent of the dairy animals are found in the
North-East-South region (see the map in Annex A4), which includes Ho Chi Minh City,
while the area around Hanoi accounts for about 3.5 percent of the dairy herd.
Vietnam contributes barely 0.01 percent to total world milk production although the
national herd (cattle and buffaloes) amounts to nearly 75 percent of the total number
of cattle in New Zealand. The average dairy cow in Vietnam yields as much milk as
four cows in India, mainly due to better dairy genetics and management. Milk prices
are 20 percent higher than in New Zealand and just over half of those in Germany.

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