Dairy in Morocco

On-farm milk production before processing represents 7.5% of the agricultural GDP in Morocco, worth about $850 million. Milk and other dairy products are produced on approximately 790,000 farms, providing year-round employment for 770,000 people. Just 5% of these are considered specialized dairy operations: the vast majority are smallholders that produce cattle for both milk and meat. For these farms, the sale of calves is very important economically. The sector has seen large changes since the 1950’s, and major manufacturers, as well as the Moroccan government, have invested in growing the dairy sector through product innovation, advertising, and marketing.

Dairy Consumption

Demand for milk is limited in large part due to low per capita income. Per capita dairy consumption is relatively low – 36 liters per year – and most consumption is in the form of plain milk, since yogurt and cheese are more expensive and seen as luxury products. Consumption varies from 90kg per capita in wealthy urban households to around 18kg in poor households. Future developments in milk consumption will be closely linked with economic development and wealth distribution in the country.

Types of Supply Chains

There are three kinds of dairy supply chains in Morocco. The largest is the Centrale Laitière Maroc, which controls about 50% of the market and is closely linked with French dairy giant Groupe Danone. Centrale Laitière produces a range of high-quality milks and milk products. It is the only manufacturer to distribute nationwide, and it benefits from its partnership with Danone for product development and innovation.

Pasteurized milk from the Centrale Laitière

The second type of supply chain operates through cooperative systems, with over 1000 collection centers throughout the country. Copag (Coopérative Agricole d’Agrumes), a competetive co-op based in Southern Morocco, controls approximately 20% of total volume of milk produced in the country and produces supermarket quality milk. It collects from 170 individual farms and 14,000 smallholders through collection centers.

The third chain is the informal processing and marketing of milk and milk products directly to consumers through peddlers and small workshops known as mahlabates. This system operates mostly in dairy basins around urban centers, and hygiene can be an issue. Milk is supposed to be pasteurized by law, but this is not always the case.

Traditional Moroccan cheese sold through informal chains

Effect of Government Policy on Milk Yields

Prior to the 1950’s, cattle herds were mostly local beef-oriented breeds, with low milk yields. During the period of colonization from 1912 to 1956, specialized dairy farms emerged, with greater reliance on European dairy breeds such as Pie Noire and Tarentaise. However, milk production did not increase substantially until the 1970’s, when the government initiated a plan to boost production. The dairy development plan included feed subsidies, expansion in forage land, irrigation projects, extension education, and importation of improved breeds like Holsteins, resulting in a doubling of milk production. These policies shaped the current dairy industry. For example, specialized dairy production concentrated in the newly irrigated regions, and now nearly 80% of cattle are improved breeds.

Structural adjustment policies in the 1980’s lead to the gradual phasing out of government involvement from the dairy industry and a greater role for private companies, cattle breeder associations, milk collection cooperatives, and autonomous veterinary and AI practices. Milk yields continued to increase: between 1970 and 2005, production increased from 400kg to 1200kg per cow.

            Today, milk production and collection and veterinary and insemination services are almost entirely private, while the government administers research, extension education, and food safety regulation. Unfortunately, educational extension services have suffered as the industry transitioned from state-run to privately controlled. The government also taxes milk imports to protect the domestic industry, and imports account for less than 20% of the market. Agriculture is tax-exempt in Morocco, which allows Copag, as a cooperative, to pay higher farm-gate prices to its farmers for their milk. Farmers benefit from a stable milk price which, given the low consumption, has potential for growth in the coming years.

Challenges

The Moroccan dairy industry faces a range of issues. One of the most important challenges is improving yield and quality of milk production. The government is decreasing the size of its role in the sector, meaning that the industrial sector, which already collects 60% of all raw milk, will have a key role in establishing and ensuring the fulfillment of quality standards. Not all collection cooperatives are well managed, leading to issues with efficiency and quality.

Milk yields can vary a lot with environmental conditions such as drought, making small farmers vulnerable to climate. While a significant amount of production occurs in irrigated areas, drought in rain-fed areas can reduce forage availability and require the use of more feed concentrates. This increases the price of production, and represents a high ‘virtual water’ cost. Adequate nutrition in general is also an issue, and leads to reduced yields and reproductive difficulties for imported breeds.

As mentioned above, the health and safety of milk products is not totally consistent. The Centrale Laitière produces high-quality, milk conforming to international standards, but it is impossible to fully regulate the informal supply chains, which often sell unpasteurized milk, cheese, and traditional fermented milk products. This poses a risk for bacterial infections, as well as potential heavy metal contamination. Most outbreaks of food-borne illness of other contamination issues come from the informal supply chain.

A yogurt drink traditionally served with couscous

 

Continued development of the dairy industry has the potential to benefit the country in many ways: higher per cow milk yields improves production efficiency and reduces environmental impact, an expanding sector creates important agricultural jobs and can boost household income, more industry involvement could raise milk quality and safety, and a greater domestic supply could provide more high-quality animal protein in marginal diets of poor Moroccans. In order to do this, both the government and private sector actors will need to invest in milk collection organization and infrastructure, extension education, and creation of domestic demand to support growth.