Successful business models for delivery of dairy

genetics to smallholders

National Dairy Development Board

The Case of India Kamlesh Trivedi

Production of quality genetics

- Define breeding goal –define what is “Best” animal - Build infrastructure to identify “best” animals: . Progeny Testing (PT) . Pedigree Selection (PS) . Open Nucleus Breeding System

Set SOP & MS Set evaluation mechanism

Certify

Production of quality semen

- Use only best disease free bulls - Follow SOP & MS for semen processing - Comply with bio- security measures

Set SOP & MS Set evaluation mechanism

Certify

Providing quality AI services

- Provide AI service at farmers’ door-step - Maintain LN system - Use best semen & follow SOP - Identify inseminated animal & record all events

Set SOP & MS Set evaluation mechanism

Certify

Characteristics of a good business model for AI delivery Breeding

Policy

Maintain a live computerised database, use information, improve

Approach to decide Breeding Strategies in different regions Target base breed

Harsh Environment* Favourable Environment**

Farmers with Poor Resources

Farmers with Good Resources

Farmers with Poor Resources

Farmers with Good Resources

Cattle Non-descript Upgrading with Local or Outside Indigenous breed

Upgrading with Local or Outside Indigenous breed or CB< = 50

Upgrading with Local or Outside Indigenous breed or CB=50

CB=50

Well-defined indigenous breeds

Selective breeding within breed

Selective breeding within breed

Selective breeding within breed

Selective breeding within breed

Crossbreds CB<50 CB=50 CB=50 CB>50

Buffalo Non-descript Upgrading with Local or outside breed - Mehsana or Murrah

Upgrading with Local or outside breed - Mehsana or Murrah

Upgrading with Local or outside breed - Mehsana or Murrah

Upgrading with Local or outside breed - Mehsana or Murrah

Well-defined indigenous breeds

Selective breeding within breed

Selective breeding within breed

Selective breeding within breed

Selective breeding within breed

* Harsh Environment:: Poor vegetation, low rainfall and high temperature-Humidity Index (> 90) ** Favorable environment: Good vegetation, medium to good rainfall, moderate Temperature-Humidity Index (<90)

3 Exit

Infrastructure of AI in India Activity Unit NDDB

Managed Coopera-tives

Gover-nment

NGO Private Total

Production & supply of Genetics

No. of PT Programmes

7* 2** 1** 10

No. of PS Programmes

2* 2

No. of ONBS 1 1

Production of Frozen Semen doses

No. of Semen stations

2 8 37 1 2 50

No. of doses produced in 2010-11 in million

12.08 12.37 33.54 7.56 1.22 66.77

% to total 18.1 18.5 50.2 11.3 1.8 100.0

AI Delivery No. of AI Centres 1394 16,625 46,191 4041 14,003 82,245

No. of AI done in 2009-10 in million

1.0 11.3 29.0 2.47 5.9 49.7

% to total AI 2.0 22.7 58.4 5.0 11.9 100.0

* NDDB implements in collaboration with cooperatives; 3 are > 10 years old, 4 are about 3 years old ** More than 10 years old + NDDB implements one in collaboration with cooperative and other with a Trust

7 existing PT and 2 PS programmes implemented by NDDB with cooperatives/ trust and another 3 PT - 2 by state governments and 1 by NGO - are supplying about 15-20% of the total about 2780 bulls used for semen collection by 50 semen stations.

These 10 PT and 2 PS programmes are to be scaled up to17 PT and 9 PS under National Dairy Plan (NDP) to be funded by WB ensuring supply of 100% of bulls required for replacement by all semen stations by the terminal year of NDP I - 2016-17.

Supply of genetics is considered as public good and is proposed to be funded as grant under NDP

Each PT and PS programme will sell bulls and create fund and is expected to be self sustainable in ten years

Production and supply of genetics

• 50 semen stations are producing 66.8 million doses from about 2780 bulls

• Top 10 stations produce about 53% of the doses and top 25 about 80%

• Plan is to have some 30 semen stations to produce targeted 100 million doses by 2016-17 and 140 million doses by 2021-22 under NDP

• Each semen station could be self sustainable once it reaches a production level of ( say 2.0 million doses per year) and generates revenue by selling its semen doses

Production and supply of semen doses

82,245 AI centres carry out 49.7 million AIs

56% of total centres in government sector; carry out about 58% of total AI; mostly stationary

20% centres in cooperative sector carrying out 23% AI; mostly mobile

24% centres in private/NGO sector carrying out 19% AIs; mostly mobile; major private AI Service Providers operating in multiple states include:

BAIF, JK Trust and IndiaGen (NDDB Subsidiary)

In all about 25% of breedable animals are artificially inseminated

Under NDP, plan is to carry out 95 million AIs inseminating 35% of

breedable animal by 2016-17 and 135 million AIs to inseminate 50% breedable animals by 2021-22.

AI Delivery

Pvt.

Semen doses & LN

DCSs Govt. Pvt.

…

…

DCSs Govt.

Semen Bank-Milk Unions

Centralised GCMMF Model

Semen doses LN

Semen station

AI Technicians AI Technicians

AI Service Provider -Semen Bank

Govt./Union/Pvt.

DCSs / Govt./ Pvt.

AI Technicians

LN

Semen doses

Semen doses & LN

Individual AI Service Provider Model

•Each AI Service Provider goes to Companies producing LN •Brings in LN in transport containers or road tankers •Buys semen doses from semen stations •Supplies LN and semen doses to individual AI Technician •Landed cost per litre of LN to AI Service Provider at Semen Bank works out to Rs. 12-20 depending on distance

•GCMMF contracts with an LN supplier •LN supplier supplies LN at district level to Milk Unions in LN SILOs •Unions procure semen doses from semen stations •District Union in turns supplies LN and semen doses to all its field AI centres •LN cost per ltr to district union works out to Rs 8-9 • Union also sells LN to other AI service providers in the area at Rs 9-10 per litre

LN Supplier LN Supplier

Have their own semen stations

Obtain bulls from their state farms and field

Produce semen doses at their semen stations

Procure or produce LN

Supply LN and semen doses to their own field AI centres, which are mostly stationary

Government employed AI technicians provide AI service

At government AI centres farmers are charged Rs. 20-60 varying among different states.

Additional fees charged for door-step service depending on distance

Cost of AI to government is estimated to be around Rs160-180 per AI; the major cost

component is salary

All State Governments

Genetics and AI delivery model in Government Sector

Genetics and AI delivery model in Cooperative Sector

135 District Cooperative Milk Unions provide AI services

3 District Cooperative Milk Unions and 5 Cooperative Federations have semen stations

Milk Unions buy semen doses and procure LN and supply LN and semen doses to their own

field AI centres, which are mostly mobile

AI technicians are either hired/engaged by village cooperative societies or District

Cooperative Milk Unions

Farmers are charged Rs. 5-100 varying among different milk unions

Cost of AI to milk unions is estimated to be around Rs100-120 per AI; the major cost

component is salary

Cooperative Sector

NGO Private

BAIF J K Trust

• Work in collaboration with state AH depts., milk feds, other govt. sponsored agencies •Operate based on funds received from these agencies •Charge farmers for AI as agreed with sponsoring agency. It varies from Rs. 30-60 per AI

Indiagen (NDDB’s

subscidiary IIL) Hatsun Nestle

Genetics and AI delivery by NGO/private AI Service Providers

•Provide AI services through hired AI technicians generating their resources by direct charging from farmers. •AI charges vary from Rs. 100-150

Cost of AI to NGO/Pvt. is estimated to be around Rs150-170 per AI; the major cost component is salary

Private AI Service Provider Model of engaging AI Technicians and generating revenue through direct charging from farmers seems to be effective in high potential areas; some good practices include:::

- One AI technician for 2000-3000 breedable animals

- Assignment of 5-6 villages in radius of 10 km

- Minimum education for AI technician: 10+2

- AI Training certificate from recognised training institute

- Service at farmers’ door-step

- Fuel allowance based on AIs done

Effectiveness of AI services to smallholders

Effectiveness of AI services to smallholders – (contd.)

Animal identification and recording all events – AI, PD, calving, calf born

A supervisor for every 12-15 AI technicians

Recovering full cost of AI directly from farmers

Proving additional products and services useful for enhancing productivity – mineral mixtures, other feed supplements, de-wormers, vaccination etc.

Veterinary assistance in case of infertility problems

Private/NGO AI Service Provider Model of engaging AI Technicians and providing AI services initially at subsidised rates and receiving assistance from sponsoring agency to meet initial deficit seems to be effective in low potential areas.

Following of all good practices of private AI Service Model except AI Charging strategy of gradually raising price instead of charging full cost from the begining

Evidences of impact of good practices

• 4 large Progeny Programmes have come up

In last three years

• Total semen sales of 2 largest semen stations have increased by 14% annually in last 3 years, and their sales to private AI service providers have grown by about 30% annually

Demand for quality semen is

growing

• In last three years it has grown annually by 5%

Infrastructure for AI expanding

fast

Evidences of impact of good practices (contd.)

• Grading of semen stations by GoI has remarkably improved:

Grade Year 2005-6 2007-8 2010-11

A 7 12 20

B 10 15 17

C 5 7 3

Not graded 32 15 7

Total 54 49 47

• Conception rates on all inseminations basis in well-run AI operations have reached 40%

Role of different organisations

• Implementation of PT/PS programmes by large semen stations operating in native tract of a particular breed, and their supplying quality genetics of the breed for the entire country

Supply of Genetics

• A few large semen stations can produce the required high quality disease free semen doses, instead of many stations each producing small quantity

Production of high quality semen doses

• One organisation in each state can coordinate a centralised LN distribution system to provide LN to all AI service providers within state

Supply of LN

Role of different organisations (contd.)

• A level playing field for all forms of institutions needs to be created to provide AI services to farmers at their door-step, and expand their operations

AI Delivery

• An independent organisation not having any commercial interest can be entrusted to pool minimum data from each genetic improvement programme, semen station, and AI service providing organisation and generate industry level information and share it with all stakeholders

Central Industry level

Database

• The Central and state governments can provide a regulatory framework for industry to grow harmoniously on sound scientific principles

Regulation of breeding services

Sustainable services for AI

In long term, large semen stations can evolve sustainable genetic improvement prgrammes for production of quality genetics for the country; they however would need to be supported initially at least for 5-10 years by government.

Large semen stations in co-operative and private sector can become self sustainable with attaining a certain level of operation and independence on price fixing

AI Service Providing Organisations can be financially self sustainable with each AI technician carrying out certain number of AIs and able to charge AI service, which covers cost of AI plus small margin of profit: with current costs 100 AIs per month per technician and charging Rs. 150 per AI would make both AI Service Providers and AI Technicians self sustaining

Some of the “worst practices” •Selecting males for semen

production based on one or two daily records of mother; putting less than 10 bulls under test and evaluating bulls based on less than 30 daughter records under progeny testing programme etc.

Genetics

•Supplying semen doses with post-thaw motility less than 50%; not ensuring bulls’ disease free status for TB, JD, brucellosis, IBR etc.; colony forming units in processed semen more than 5000 CFU per ml etc.

Semen production

•Not ensuring LN level in container; carrying semen straws in pocket; not measuring temperature of water before thawing; inseminating animal without consideration of time of initiation of heat; depositing semen just at the tip of cervix; damaging animal during insemination etc.

AI delivery

“Make or break” factors affecting semen delivery

• For different breeds for producing quality genetics

Establishment of genetic

improvement programmes

• To produce disease free semen doses Bio-security measures at

semen stations

• As cost of LN to AI Service Provider is much higher when LN is procured independently by each AI service provider compared to one agency meeting needs of all AI service providers

Establishing a centralised LN delivery system

“Make or break” factors affecting semen delivery

• Under pricing by state governments and cooperatives AI service charges

• To provide quality breeding services to farmers at reasonable cost and ensuring a steady genetic progress in the population

Regulating bull production, semen production and AI

delivery

• On an individual animal basis and generating information for all stakeholders

Collecting required data

New technologies

Sexed Semen

• Cow slaughter is banned in most states and cattle males are losing utility particularly crossbred males

Embryo Transfer

• For bull production - to exploit limited high producing animals within breeds

OPU and IVF

• These are very relevant as costly hormones need to be imported for conventional ET work

Genomics

• For “Whole Genome Selection Procedures” - wide bio-diversity, huge animal population and limited infrastructure for performance recording in the field

Key legal and regulatory pre-conditions for ensuring private sector AI delivery

•Sets minimum standards, puts in place evaluation mechanism and certifies bulls, semen stations and AI Service Providers

•Proposes to establish an Independent Authority for Registration of Semen stations and bulls at the national level and State level Independent authorities for registration of AI Service Providers and Recognition of AI Training Institutes

Draft Bovine Breeding Bill –to be made into law

expeditiously

• It should not be within the ambit of Indian Veterinary Council Act, 1984 and should not be included as minor veterinary service

Artificial Insemination

Conclusions

Led by rising demand for milk, raising productivity is an imperative need

Building infrastructure for supplying quality genetics for AI should be the key focus area for improving productivity; at this stage genetic improvement should be treated as public good and fully funded; large semen stations should be entrusted to implement genetic improvement programmes making them self sustainable in 5-10 years.

Modernizing and expanding semen production infrastructure with added emphasis on quality control and bio-security measures is the other key focus area; large semen stations could be self sustainable with their independence on deciding semen prices

Conclusions….. More professional AI service providers to be encouraged to increase % of breedable animals inseminated; a level playing field needs to be created for private AI service providers by advising state governments and dairy cooperatives to provide AI services at prices that cover their actual full costs

An independent agency needs to be set up for pooling certain essential industry level data and also for estimating breeding values

A legislation is required for regulating bovine breeding activities including use of breeding bulls, production, processing, storage, sale and distribution of semen, and AI services

Thank You