Friday, December 8, 2023

NZ dairy investor’s promising journey into India

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Earl Rattray has hands-on experience in India’s dairy sector, where, he says, expectations are lifting and the narrative is changing.
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When Earl Rattray started thinking about the potential for dairying in India, he took a step back in time to consider the origins of his own industry in New Zealand to get an indication of where things might go.

“We had seen a transition over about 120 years from an informal to a formal industry. India is on the same journey. Same story, different place, but on a massive scale,” Rattray says.

He realised the risk in participating in India’s progression was not as great as many may have thought. 

“In many ways, you can say we know what’s going to happen next, and so far it’s been right on target.” 

India has millions of small household-scale farms, with the vast majority of farmers having fewer than 10 cows, and 80% farming less than 2ha. 

Many of them will cease over the next decade as the pace of India’s economic growth accelerates and greater income opportunities open up.   

Rattray could see that any growth would be incremental. He understood the risks of trying to plant a modern Kiwi farming system in another country.

“Here, we knew we were talking 1970s-style herringbone dairy sheds run with basic technology no more complex than Read slides. It is quite simple, bullet-proof stuff. Even this was revolutionary innovation when we started it, starting small and taking baby steps.”

It has been 11 years since he kicked off his odyssey in the world’s largest dairying nation. Today he and wife Joanne are in partnership with another Kiwi couple and three Indian families, running a farm averaging 220 cows milking all year round, combined with a direct-to-home delivery model. 

Another innovation – quite a controversial one – was breeding to a local version of Kiwi-cross cows. 

The ‘Indian-Kiwi-cross’ herd of compact cows bred on Earl Rattray’s farm in India can cope with the hot and seasonally humid conditions well, are efficient feed converters, robust and relatively disease resistant.

“We’ve got cows of all colours in our India herd, and I’m proud of every one of them,” he says. 

The farm’s “Indian-Kiwi-cross” herd of compact cows can cope well with the hot and seasonally humid conditions, are efficient feed converters as well as being robust and relatively disease resistant, and get in calf regularly – a rarity in India, he says. 

“India does not have bovine genetics import protocol with New Zealand, so we are having to make do with what we have.” 

The feed regime is based on as much high-value ME green-feed fodder as can be grown, limiting the brown feed, and using high-quality maize. North India is one of the world’s most productive cropping regions.    

“While the farm itself is modest scale, which will probably top out at around 1.5 million litres a year, it’s enough scale to make it work, and be replicable. The locals here can relate to it,” Rattray says.

Establishing their own farm, making it work and establishing a channel to a rapidly formalising market has given reach to a much wider network of farmers who supply milk, all of whom want to produce milk to similar quality metrics as in NZ. 

“So we are now procuring twice as much milk as we produce ourselves, processing and delivering under the farm’s own Binsar Brand. 

“The cows are milked in the evening, milk processed overnight and in 6000 Delhi kitchens by 8am the next day. It must be one of the shortest supply chains I have ever seen.”

The home-delivered product range now includes ghee, lassi and buffalo milk.

“What we have developed is definitely scalable, and we know from our own history that farming and food standards will lift. We now have multiple business-like bakeries and confectionery manufacturers chasing us for milk and now some big and famous processors are chasing us for milk as well. 

“Expectations are lifting, and the narrative is changing.”

He says India is not short of milk – it is short of traceable, formal milk.
Rattray’s insights on India are well worth listening to, as someone who has extensive NZ and international dairy experience in both a governance and advisory role. 

His dairy career includes the conventional progression from sharemilker to farm owner, with board roles on NZ Dairy Group and as a founding board member of Fonterra. 

He holds interests in several NZ and off-shore farming ventures, and he and Joanne also retain the original family farm in Ōtorohanga.

“We are seeing an economic miracle unfolding here. India has just put a rocket on the moon and no one should underestimate the contribution this country will make to the future, as a social, cultural and economic centre of the world.”

He says the reasons for being part of India’s resurgence as a world power are obvious.

“My experience has found very welcoming people, very principled, with a legal system similar to ours. We can easily communicate with them, and share strong family values.”

A gold-plated free trade agreement with India is not a goal that should be demanded by NZ at all costs, he says, and he is optimistic that NZ is starting to recognise this, and that it is open to the collaborative opportunities India’s development can offer. 

“Improved trade will come in time, make no mistake about that. 

“Now is their time, and they are only just getting started.”

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