Quality Management System (QMS)

in Dairy Industries in Nepal

By Dambar B. Khadka

KaHo Sint Lieven Gent, Belgium

General Outline

• Introduction Historical background Current status of milk Production & Consumption Dairy Development Policy Dairy Industries and Its potential in Nepal

• Quality Issues and Importance of QMS in Dairy sector in Nepal

• QMS in Nepalese Dairy and Supports Mandatory Regulation Voluntary Regulation

• QMS in Dairy: Future Prospective & Recommendation • Conclusion

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Introduction

Dairy development started with establishment of yak cheese Factory in Rasuwa in 1952

Establishment of Dairy development Commission in 1961, later converted to DDB In 1962 by GoN

In 1969, DDB Converted to DDC by GoN

Expanding of DDC in different region of country

Establishment of NDDB under ten year plan (1991-2000)

Initiation of private dairy industries

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Historical Background

Source FAO-N, 2010 5/31/2012

Current status; Milk production and Consumption

• Annual milk production of Nepal : 1388,730 MT

• 70% supply from Buffalo milk & 30 % Cow Milk (Goeleti, et al.,

2001)

• Dairy sector contribution (6% of National GDP)

• Per capita consumption:49 litre

• Common Dairy Product: milk (plastic pouches), Dahi (yoghurt like product), Ghee (clarified butter), paneer (soft cheese), Icecream and numerous traditional products

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Dairy Industry & its Potential

• Most of dairy industry are small and medium scale

• DDC is the largest one (state owned, 200 Mt/day)

• Annual market growth for dairy products is around 10-11 percent (FAO-N, 2010)

• Milk availability per day is higher than processing capacity (only 70% is utilized/day) (Upadhyay, 2001)

• Milk holiday a major problem to farmer

• Even though import of SMP, condensed milk is high

• Opportunity of the strengthen capacity and product diversification

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Dairy Development Policy (DDP) • Issued by GoN in 2008 • To develop national economy by commercially, qualitatively and

competitively developing the dairy sector for contributing employment generation and poverty reduction with the participation of government, cooperative and private sector to extend the efforts and programmes to make milk and dairy products easily available to the consumers (MoAC, 2008).

Major Objective: Increasing milk production and productivity in rural areas Expanding milk collection, transportation arrangement and processing industries. Substituting import and increase the quality through product diversification to make it exportable commodities Upgrading and Regulating milk and milk products quality to supply quality product to consumer.

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Agencies Concerned with DDP

organization Responsibilities

MoAC Policy formulation, monitoring and evaluation, and facilitation

MoF Arrangement for exemption of tax, custom duty and other

concessions

NDDB Study, policy formulation and amendment, monitoring and

evaluation of policy implementation

NARC Dairy product diversification, research and extension of low cost

milk production technology, study and research on reducing

fluctuation in milk production during flush and lean season

DLS Necessary technical service for quality milk production, animal

feed and animal disease control, training and management and

programmes for reducing milk production cost

DFTQC Quality amendment, fixation, quality monitoring and direction

7 Source: MoAC, 2008 5/31/2012

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DoC Development and extension of dairy cooperatives, monitoring and

evaluation

MoICS Facilitation on establishment of dairy industries and import and export

of milk and dairy products and machine and equipment

ADB Arrangements of credits facility for milk producer, farmer and dairy

industries

DDC Extension of dairy business and quality dairy product diversification

CDOA Development, expansion and strengthening of dairy cooperatives, dairy

processing factories

NDA Problem identification expansion of dairy business and quality dairy

products diversification, implementation and monitoring of code of

practice in the dairy industries

CDB Amendment of cooperative policy, strengthening of dairy cooperatives

and establishment and cooperation of cooperative dairy processing

factories

Agencies Concerned with DDP contd...

Source: MoAC, 2008 5/31/2012

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Quality Issue and Importance of QMS

Farmer

Middleman/ Vendor Milk collection centre Dairy Cooperatives

Milk Chilling centre

Milk Processing Plant

Retailer

Consumer

Complex Chain of Milk Supply Long travelling time and poor hygienic maintenance at farm and supply chain, and maintenance of cold chain is difficult

Source: FAO-N, 2010 5/31/2012

Quality Issue and Importance of QMS

• Mixed farming, mainly small household farming system • Lack of hygiene in farmer • limited knowledge about hygiene and quality • High adulteration practice for profit • High Sub-standard products in Market (30%), major

problem is hygienic contamination (DFTQC, 2007)

• Improper processing facilities and less skill personnel • Post contamination more frequent • Limited realization about quality and quality management. • Consumer have to boil milk even if they are coming from

pasteurised plant.

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Existing QM and support • Mandatory Regulation

Food Act 1967 & Regulation 1970

controlling and regulating Food Quality through sampling and inspection and penalty to sub-standards

Minimisation of misbranding and adulteration of marketed food

Issues national standard of 17 milk and milk products

DFTQC is responsible body

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Focus on end product testing rather than prevention and cure approach ( Karki, 2006)

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Existing QM and support

• Voluntary standard and Regulation

Code of practice

Nepal standard & certification Mark ( NS)

HACCP

QMS and its Implication

SPS & TBT Agreement

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Code of practice

• to provide guideline to dairy producer and corresponding stakeholder for production and supply of quality milk and milk product in the entire milk supply chain

• Clean milk production at farmer level

• Milk collection and chilling centre

• Environment of dairy industries/Factory

• Building for dairy industry or cooperatives

• Construction of the processing hall

• Clean milk production at the farmer level

• Milk collection and chilling centre

• Environment of dairy industries/Factory

• Building for dairy industry or cooperatives

• Construction of the processing hall

Provide guidelines based on GMP principles

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Nepal Standard & Certification

• Is product specific standard

• NS mark on any product is the indication of third party guarantee

• licenses to use Nepal Standard Certification Mark (NS) under provision of Nepal Standards Certification Mark Act 1980

• Issued by NBSM

• No dairy industry in Nepal has awarded by NS Certification till now

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HACCP

• Systematic approach that could be applied by food industry in order to assure the food safety.

• Include proactive dimensions GVP, GHP, GMP as an prerequisite program

• Only DDC has been implemented HACCP

• a growing interest in private dairy industry

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QMS Implementation & certification

• QMS like ISO 9001 & ISO:22000 in emerging interest in dairy sector after Nepal being WTO Member in 2004 (Kharel, 2006)

• Only DDC has been implemented ISO 2200:2005 • Gradually become essential to other dairy • Implementation problems in many dairies due to: Large number of small and medium scale industry Lack of supporting Unavailability of certification body in country Lack of professional and other difficulties Lack of awareness & realization

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SPS and TBT Agreement

• Nepal as 147 member of WTO, Obligation to comply with SPS &TBT Agreement

– SPS: Necessary measure to prevent the hazard through international trade to protect Human , Plant & Animal

– TBT : Related to product or technical specifications, not to create unnecessary obstacles to trade.

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SPS and TBT Agreement

• Main challenges to dairy sector – Harmonization with Codex standard

– Require science based sufficient information for making standard for traditional milk product

– Free competition with Imported milk products

– Opportunity of export is limited due to internal weak standard and external high standard

– Lack of technical expert, finance and other resources

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Future Perspectives & Recommendation

Strength

•High potential to substitute import products • Involvement of large population (65%,

modern and integrated plants, important cash crops

• Increase demand , export future • Potential to increase yak cheese and other

traditional milk products

Opportunity

•HACCP and ISO 9001 implementation, •Maintaining cold chain from Farm to

processing plant • Product diversification e .g traditional

products • Code of practice implementation

Threat

•High milk production cost • Lack of infrastructure • not competitive in term of quality and price • High Sub standard milk products in market • Lack of standard especially traditional milk

products

Weakness

• Low productivity, Low investment by

GoN, Low milk availability in Lean season •Weak Food act & enforcement • Limited implementation of GMP, HACCP

and QMS •

Continual improvement is necessary through PDCA Cycle

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Future Perspectives & Recommendation

For long term sustainability and to withstand competitive market Realization of Quality as a techno-manegrial approach is necessary in dairy industry

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conclusion

• Dairy is complex matrix, both quality assurance as well as QMS adoption is necessary

• Some big industry already adopted FSMS, but still challenge to small scale industry

• Realization of importance of QMS like ISO 9000 or ISO 22000 by management and implementation is necessary for long term run & to be competitive

• Line agencies should play supportive role such as development of good policy, motivation to industry toward QMS, making available resources, education and /or developing effective QMS in national level.

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Reference

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