Successful business models for delivery of dairy genetics to smallholders The Case of India Kamlesh Trivedi National Dairy Development Board
Characteristics of a good business model for AI delivery Breeding Policy Production of quality genetics Production of quality semen Providing quality AI services - Define breeding goal define what is Best animal - Build infrastructure to identify best animals:. Progeny Testing (PT). Pedigree Selection (PS). Open Nucleus Breeding System - Use only best disease free bulls - Follow SOP & MS for semen processing - Comply with bio- security measures - 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 Set SOP & MS Set evaluation mechanism Certify Set SOP & MS Set evaluation mechanism Certify Maintain a live computerised database, use information, improve
Approach to decide Breeding Strategies in different regions Target base breed Harsh Environment* Farmers with Poor Resources Farmers with Good Resources Favourable Environment** 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) Exit 3
Infrastructure of AI in India Activity Unit NDDB Managed Production & supply of Genetics No. of PT Programmes No. of PS Programmes Coopera -tives Government NGO Private Total 7* 2** 1** 10 2* 2 No. of ONBS 1 1 Production of Frozen Semen doses No. of Semen stations No. of doses produced in 2010-11 in million 2 8 37 1 2 50 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
Production and supply of genetics 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 semen doses 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
AI Delivery 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.
Individual AI Service Provider Model Centralised GCMMF Model LN Supplier Semen doses LN 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 Semen station Semen doses LN Supplier LN AI Service Provider -Semen Bank Govt./Union/Pvt. Semen doses & LN DCSs / Govt./ AI Technicians Pvt. 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 Semen doses & LN DCSs Govt. Pvt. AI Technicians Semen Bank-Milk Unions DCSs Govt. AI Technicians Pvt.
Genetics and AI delivery model in Government Sector 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 All State Governments 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
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 Cooperative Sector 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
Genetics and AI delivery by NGO/private AI Service Providers NGO Private BAIF J K Trust Indiagen (NDDB s subscidiary IIL) Hatsun Nestle 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 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
Effectiveness of AI services to smallholders 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 (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 In last three years 4 large Progeny Programmes have come up Demand for quality semen is growing Infrastructure for AI expanding fast 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 In last three years it has grown annually by 5%
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 Supply of Genetics 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 Production of high quality semen doses A few large semen stations can produce the required high quality disease free semen doses, instead of many stations each producing small quantity Supply of LN One organisation in each state can coordinate a centralised LN distribution system to provide LN to all AI service providers within state
Role of different organisations (contd.) AI Delivery 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 Central Industry level Database Regulation of breeding services 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 The Central and state governments can provide a regulatory framework for industry to grow harmoniously on sound scientific principles
Sustainable services for AI 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 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 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.
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. Some of the worst practices 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. 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. Genetics Semen production AI delivery
Make or break factors affecting semen delivery Establishment of genetic improvement programmes For different breeds for producing quality genetics Bio-security measures at semen stations To produce disease free semen doses Establishing a centralised LN delivery system 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
Make or break factors affecting semen delivery AI service charges Under pricing by state governments and cooperatives Regulating bull production, semen production and AI delivery To provide quality breeding services to farmers at reasonable cost and ensuring a steady genetic progress in the population Collecting required data On an individual animal basis and generating information for all stakeholders
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 biodiversity, huge animal population and limited infrastructure for performance recording in the field
Key legal and regulatory pre-conditions for ensuring private sector AI delivery Draft Bovine Breeding Bill to be made into law expeditiously 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 Artificial Insemination It should not be within the ambit of Indian Veterinary Council Act, 1984 and should not be included as minor veterinary service
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 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 An independent agency needs to be set up for pooling certain essential industry level data and also for estimating breeding values
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