Sabah ‘s dairy sector a sunset industry


Yap giving a tour of his milk processing factory in Lok Kawi.

PUTATAN (July 11): The dairy sector is becoming a sunset industry with rising costs that forces farmers to cease operation.

Sabah Daily Farmers Association president Adjunct Professor Datuk Yap Yun Fook said the number of dairy farmers in Sabah had dwindled to about 30 from 600 in the past.

“This is a sunset industry. I have been the president of Sabah Daily Farmers Association since 2000.
“There were hundreds of dairy farmers in the past but now the number has dropped to less than 30,” he said in a press conference on Monday, adding that the operational costs of dairy farms has increased by 100 per cent.

He said Sabah produces about nine million litres of milk annually, but the volume is decreasing as more farms have closed because of rising operational costs.

Yap, who is also the managing director of Yun Fook Resources Sdn Bhd, said his factory in Lok Kawi, which produces Eco-Yap fresh milk and drinking yogurt, only processes 20 tonnes of milk daily instead of its maximum capacity of 100 tonnes per day due to the lack of milk supply.

The factory was established in 2014 with an investment of RM60 million.

The milk the factory processes is sourced from his farm – he rears about 5,000 dairy cows in Keningau – and from other farmers.

Yap said the decreasing milk production is caused by error in government policies.

He opined that the government should focus on supporting the main industry players to boost milk production because they have economies of scale.

He said providing small livestock farmers with 10 or 20 dairy cows is not viable economically because they do not have the facilities or sophisticated milking machines to produce milk hygienically.

In addition, Yap said smaller players would find it difficult to mechanize their operations because of small land area.

“Dairy farms should be developed in a large scale with the use of machines because it will be cheaper in the long run.”

He said manual labour is not only less efficient, but also incurs higher cost in the form of salary, accommodation and utility bills.

He said there are only three fresh milk processing factories in Sabah, namely his, Sabah International Dairies (SID) and Desa.

Yap said the Parliament had approved an allocation of RM400 million last year to acquire locally-produced milk for poor students, but he claimed that part of the funds have been used to purchase full cream milk that was a mixture of milk powder and water because the local dairy supply was not sufficient for the whole country.

“Full cream milk is basically milk powder mixed with water. Fresh milk is 100 per cent cow’s milk,” he explained.

Yap said the government should support the dairy industry by supporting the industry players through the provision of cows, milking machine and chiller tanks.

“Instead of spending over RM50 billion on imported food, why not help the farmers? We are not asking for RM50 billion, RM2 to RM3 billion may be enough to develop the dairy sector.”

He said the Minister of Agriculture and Food Industries Datuk Seri Dr Ronald Kiandee is a Sabahan, he could bring up the issues to the cabinet.

“The government should review policies that are no longer suitable, and be brave to do something about it.”

He said the government should seek industry players who are knowledgeable about the dairy sector to develop the industry.

Yap said he has been in the business for 40 years and is willing to share his knowledge with government agencies for the future of the industry in Sabah.

He started with two cows in 1982 and milked by hand before expanding to 5,000 cows across 150 hectares in Keningau.

Eco-Yap fresh milk is sold locally and to West Malaysian markets, including Kuala Lumpur and Johor.