• Govt. distributed 3,030 substandard cows among 46 investors

A number of Sri Lankan dairy farming families have been left devastated after investing in a fresh milk scheme which saw the import of dairy cattle from Australia and New Zealand. Dozens of cattle in local dairy farms have died following a government brokered import deal with Australia’s largest cattle exporter, Wellard Ltd, which Sri Lankan dairy farmers say, has left them broke and desperate.   

Following the import of the heifers, farmers were faced with grave issues including low quality of cattle, low dairy yield, inadequate technical support from Wellard, and in many cases, death of the imported cows. Furthermore farmers lamented that they did not receive the assured price for milk products from State-run MILCO Pvt Ltd, which purchases dairy from local farmers.   

Although the deal was arranged in order to increase the supply of fresh milk in the country while attempting to decrease the import of powdered milk, farmers said that the imported cows were of low quality, suffered from fertility issues and had also undergone abortions due to the stressful shipping process. During visits to several affected dairy farms, the farmers informed the Daily Mirror of a host of issues, and demanded the government compensate them as they suffered a severe financial blow, since their investment in this controversial cattle deal

Nine mother cows have also died. I am also concerned that many of these cows have Bovine Viral Diarrhoea (BVD), which is a serious disease.   

Findings of the Presidential Commission

Under the agreement, Sri Lankan dairy farmers sought expensive ‘high-yield’ milch cows. However the imported cattle were soon found to be infertile and riddled with disease. The Presidential Commission of Inquiry (PCoI) probing allegations of large scale corruption under the previous ‘Yahapalana’ government conducted an extensive inquiry into this decision of importing 20,000 high yielding milch cows.   

In 2014, the Sri Lankan government signed an agreement with Wellard Rural Export Pvt. Ltd where the cattle were imported from Australia and New Zealand. A complaint was lodged with the Commission by Amal Suriyage, the proprietor of  Lammermoor Estate in Maskeliya that the government distributed 3,030 substandard imported Australian cows among 46 investors and dairy farmers who had taken part in a subsidized government scheme to place high-yielding imported pregnant cows, in 2017. Foresight Engineering Pvt. Ltd served as the local agent for Wellard Rural Exports Pvt. Ltd, Australia.   

Testifying before the Commission, Suriyage said that the Ministry of Rural Economy initially informed the investors that these pregnant cows would produce 20 litres of milk per day on average and had advised some investors, to even get rid of the Sri Lankan cows in their farms.   

“Luckily this didn’t happen to me because I was not a dairy farmer before, but a lot of others got rid of their cows. The Sri Lankan cows produced between four to six litres of milk a day. They just had to be fed grass but these imported cows needed costly food and only produced about eight litres on average,” he informed the Commission.   

Under the arrangement, investors paid Rs.200,000 while the government paid Rs.265,000, per cow. However a number of cows died, whereas some pregnant cows suffered from abortions, stillbirths and other health issues, Suriyage said.   

“I got 200 pregnant cows and there were 21 stillborn calves, while a further nine adult cows died. Nine mother cows have also died. I am also concerned that many of these cows have Bovine Viral Diarrhoea (BVD), which is a serious disease which was not prevalent in Sri Lanka earlier.

I also suspect that the livestock are suffering from sub-clinical diseases and have placed them under surveillance,” he said, adding that he requested the Ministry of Rural Affairs on May 16, 2018 to investigate the matter.   

After seeing a public advertisement about the scheme, Suriyage entered into this project in 2017. However he soon learned that the quarantine procedures were not transparent. “These cows don’t suit the climatic conditions of Sri Lanka and the government would have realised this if the cows were subjected to a quarantine period,” Suriyage highlighted.   

We made these payments for cattle that didn’t even arrive. That’s not even the worst part, believe it or not, it’s that these charges are a violation of the agreement 

Startling revelations

Suriyage wasn’t the only investor who made startling revelations before the Commission about the quality of the imported cattle. The Commission ordered the Additional Secretary of the Ministry of Rural Economic Development Dharmasiri Ariyapala to furnish the original copy of the controversial agreement signed between the Ministry and Wellard Rural Exports Pvt. Ltd in 2014. It was then revealed that the Ministry of Rural Economic Development did not possess the original copy of the agreement which it signed with Wellard, ltd.   

“The agreement was signed in 2014. The ministry only has a copy of that agreement and I have brought a certified copy of that copy,” Ariyapala informed the PCoI. Ariyapala said that he was appointed to the ministry several few months before and had inquired from the cattle import project’s Coordinator about the original agreement. Project Coordinator, Sagarika Sumanasekera had informed Ariyapala that the Ministry of Economic Development did not furnish them with the original copy, despite a request being made.   

There was also an amendment made to the agreement in 2016. Accordingly, Chairman of the Commission, retired Supreme Court Judge Upali Abeyratne questioned the witness as to how the Ministry intends to implement the agreement accurately if it doesn’t possess a copy of the agreement.   

“You said the agreement was amended in 2016, maybe it was changed in a negative way. There is no validity in a copy of a copy,” the Chairperson said. Meanwhile Sri Lanka had paid Rs. 4.44 billion to Wellard Rural Exports Pvt. Ltd, from January 2017 to May 08, 2018 for the importation of the controversial milch cows.   

While the payments were made through the external resources department of the Treasury, the last tranche paid by the Department, Rs. 1.3 billion (USD 8.3 million,) was paid to import 15,000 milch cows, the remainder of the 20,000 cows that were to be brought down, under the administration of then subject Minister P. Harrison.   

Witness, Thusitha Dharmapriya of the external resources department, said that these payments were made on seven occasions. “Six payments were for the first leg of the scheme, for 5,000 cows. The May 2018 payment was for the second leg,” he recalled. 

The last tranche of USD 8.3 million included USD 78,166 as port clearance and transport charges, USD 66,569 for testing for BVD disease, USD 91,549 for salmonella vaccination and USD 130,277 for technical management and capacity building for six months.   

“We made these payments for cattle that didn’t even arrive. That’s not even the worst part, believe it or not, it’s that these charges are a violation of the agreement between the Ministry of Rural Economic Development and Wellard. In the agreement Wellard agreed to take care of all these expenses, “Abeyratne highlighted. The Chairman inquired from the witness if the external resources department evaluates the agreements signed between various government departments and private entities before making payments. “We don’t check agreements. We take the word of the secretary to the line Ministry,” Dharmapriya responded.   

Although the external resources department of the Treasury had paid Rs. 1.3 billion (USD 8.3 million) to Wellard Rural Exports Pvt. Ltd, on May 8, 2018, as an advance payment, there was no money allocated for it in the 2018 budget, it had been earlier reported. Cyril Perera, the former chief accountant at the Ministry of Rural Economic Development informed the commission that both the Ministry and the Treasury were aware that there was no budgetary allocation for the purchase of the remainder of cows under the subsidized scheme to introduce high-yielding imported pregnant cows.   

Bovine Mycoplasmosis caused by Mycoplasma Bovis is a new disease found in cattle worldwide. It was aptly coined ‘SILENT and DEADLY

“They (Ministry of Rural Economic Development) sent us a note saying that there was no allocation for this scheme in the 2018 budget and that we should talk to the National Budget Department. The note was sent, on May 08, but by then they had already made the payment. They had no right to make that statement. Both parties, Ministry and External Resources Department were in the wrong because both sides knew that there was no budgetary allocation!” he asserted.   

During discussions to prepare the 2018 budget, the issue of the milch cow import scheme had been discussed. However, the Treasury didn’t allocate any budget because there had already been complaints against the quality of the imported cows. “So, there were monetary allocations. Both the Ministry and the Treasury knew that. The Rs. 1.3 billion payment amounts to 20% of the cost to import 15,000 cows.”   

It was also revealed to the Commission that Ministry of Rural Economy had not heeded repeated warnings by the Department of Animal Production and Health about highly contagious and deadly diseases carried by the imported cows from Australia.   

“After we informed the Secretary to the Ministry at that time, Renuka Ekanayake that these cows carried the deadly BVD disease and fasciola hepatica (common liver fluke), we met with the Minister, P. Harrison. Then Director General of Department of Animal Production and Health, Nihal Wedasinghe suggested that the Ministry demand Wellard Rural Exports Pvt. Ltd, the supplier of the cows, to pay compensation because they have clearly violated the agreement,” Director of Livestock Planning and Economics, at the Department of Animal Health, Dr. S.S.P. Silva informed the Commission.   

The Silent and Deadly Killer 

Sharing his views with Daily Mirror on the fatal cattle diseases spreading in the country, former Veterinary Surgeon Rohan Perera said that Sri Lanka has been the recipient of a new lethal cattle disease.   

“There’s no effective treatment or vaccine. The disease, not only causes deaths but also spreads rapidly through infecting healthy cattle as well. The disease was never reported in the country prior to the arrival of cattle from Australia,” he said.   

In his extensive studies on the cattle disease, he highlighted that though Sri Lanka has suspended the controversial dairy cow imports from Australia, the damage had already been done with the first phase where 5,000 cows were imported. Illustrating the economic fall-out from the disease in some dairy producing countries he observed the severe impact of disease on the dairy industry. “Bovine Mycoplasmosis caused by Mycoplasma Bovis is a new disease found in cattle worldwide. It was aptly coined at its first ever international conference in 2009 as ‘SILENT and DEADLY’, he said.   

During the Presidential Commission proceedings, Director of Livestock Planning and Economics, at the Department of Animal Health, Dr. S.S.P. Silva too echoed this interpretation of BVD as the dairy industry’s silent killer, adding that in countries where the disease is predominant, each calf is tested.   

“If a cow contracts BVD while she is pregnant, her calf might become what we call a persistently infected (PI) animal. These cows carry BVD throughout their lives and infect others. In foreign countries such animals are immediately culled. We also suggested that we should follow similar procedures. This wasn’t done and these calves live in many of our farms. This is a deadly threat to our dairy industry, he testified before the Commission.   

An industry in peril

Observing the state of the dairy industry in Sri Lanka, former Deputy Director of the Veterinary Research Institute (VRI) Sunil Gamage said that the Australian company which exported the cows has to accept responsibility on the matter as it was aware that this particular virus cannot be controlled. “In Sri Lanka 96% of the farmers are small holders, it is their livelihood. There is a huge value in dairy farming,” he said. He observed that countries like Australia and New Zealand find it difficult to export milk to other countries. “Earlier, China imported a whole lot of milk from Australia and New Zealand and now China is producing its own milk. That was one of their biggest markets,” Mr. Gamage said.   

He highlighted that if Sri Lanka hopes to increase milk production, the annual growth should increase to 46%. “Currently our annual growth in dairy production is 3.3%. If we are to at least keep these imports sort of a constant, we have to have 46% or 47% annual growth. That is if we hope to meet a better demand,” he observed.   

In Sri Lanka 96% of the farmers are small holders, it is their livelihood. There is a huge value in dairy farming,” he said

Statement from Wellard

A statement published by Wellard on its website stated that the company successfully transported two shipments of dairy heifers to Sri Lanka under a contract to supply 20,000 dairy cattle.

It noted however that the farmers in the country have to improve the quality of their farming. Providing an outline of the Sri Lanka dairy cattle deal, Wellard said that in 2014 the company was awarded a contract to supply 20,000 dairy heifers to the government of Sri Lanka, and to provide technical support to the farmers who applied for the scheme.   

Two shipments have been provided thus far, 2,000 heifers in May 2017 and 3,000 heifers in December 2017. 84 million litres of milk was produced by the cows since the programme began (includes the pilot programme in 2013), replacing US$ 32 million of milk powder imports.   

The Company also noted that since the commencement of the programme it had undertaken several steps to provide assistance to achieve the programme’s objectives and to maximize animal welfare.   

The health and production of the heifers were monitored by veterinarians and technical advisers throughout the duration of the project. Up to 90 Wellard and Wellard contracted staff operating in the field in Sri Lanka were advising and educating the local farmers on best practices of nutrition and husbandry techniques, the statement said.   

A visit to several dairy farms in Dambulla, Matale, Hatton and Maskeliya highlighted the plight of the farmers who invested in this government scheme. 

“They wanted us to bring supplements and mix them in the feed. They also gave us instructions as to how everything should be done, as per their standard. They said that we could expect 25 litres of milk from one animal. They made us spend so much money but all of it was in vain”   

Sandamali Priyangika – A Small farm owner in Hiripitiya 

We bought 75 animals. Out of them only 7 animals conceived in the second calving, and they were artificially inseminated in August 2018 . We had to resort to using a bull from a local farm. Until we brought the bull we had to try artificial insemination multiple times on one animal.   

The Wellard doctors somehow opposed the idea of bringing down a local bull saying that they wouldn’t be able to keep track of the period etc. We didn’t listen to them; if we had listened to them then we would have been able to stay afloat.   

The local animals usually don’t require a large amount of food and one animal ends up giving at least 20 - 22 litres of milk regardless. The imported animals need to be given at least 10 kgs of concentrate, and at least 40 kgs of grass. Regardless of what we feed them, they don’t seem to match up to the local animals. Out of all imported animals we bought, we got only 280 litres of milk a day when we managed to get the same amount of milk out of 22 local animals.   

Isuru Gayan - Foliage Farm