Fonterra is looking to start a pilot free "milk in schools" programme in Sri Lanka, Primary Industries Minister Nathan Guy says.
The programme is one of a suite of initiatives designed to boost Sri Lanka's dairy industry, which is still centred around small-scale farms.
Last week Guy and a New Zealand business delegation, which included former Black Cap cricketer Stephen Fleming, met President Mahinda Rajapaksa and several Sri Lankan ministers.
A Fonterra spokesman confirmed the pilot programme would be launched in early 2015, although he said it was too early to announce the scale of it.
Fonterra, which has a liquid processing plant in Biyagama, is supplied with milk by 4000 farmers, processing 30,000 litres a day. A group of model farms set up by Fonterra have seen a 42 per cent lift in overall milk production, and a 55 per cent increase in their income on average after their first 12 months in the programme.
While in Sri Lanka, Guy laid the foundation stone for a milk chilling station in Gampaha. Farmers will be able to drop off their milk and from there it will be taken to Biyagama.
"There are 200,000 dairy farmers in Sri Lanka who each own just a handful of cows, they milk them by hand and carry the milk off to a chilling station on bikes. The new station will increase the quality of raw milk collected in the area," Guy said.
Overall trade with Sri Lanka is worth $280 million a year to New Zealand, most of it dairy products. Fonterra has experienced recent hiccups, including the suspension of the sale of Anchor milk powder in October, amid concerns it had made children sick.
In August last year, Sri Lanka's National Health Services Union won a temporary injunction to stop the sale of Fonterra products because of worries over the levels of nitrates found in milk powder.
Guy said he had discussed the concerns with the Sri Lankan Government and "access issues have now been resolved".
"Our two countries are building a stronger relationship through the New Zealand-Sri Lanka Dairy Co-operation Arrangement (DCA). The DCA is our commitment to the development of Sri Lanka's dairy industry," he said. "New Zealand has one of the world's most efficient dairy industries, and a lot of valuable expertise to share with Sri Lankan dairy producers.
"There are only 280,000 cows in Sri Lanka compared with 5 million in New Zealand and they are keen to improve their productivity. Genetics, animal husbandry, feeding techniques and technology can all play a part in this."
Guy said there was a possibility of exporting live dairy cattle to Sri Lanka but they would have to be compatible breeds for the local tropical conditions.
Another initiative under the DCA is a five-year, $2.2m, New Zealand Aid programme focused on veterinary education. Other activities focus on improving animal nutrition, extension services, and fostering veterinary exchanges. (Source: stuff.co.nz)