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Milk production of local cows was low because they were stressed, according to Public Enterprises and Public Sector Reform chief executive Parmesh Chand.
He made the comment following a study by a New Zealand company, Marphona Farms, which is talking over Viti Corp Co Limited.
"It is really interesting, they have drawn up a chart which shows the stress levels of our cows," Mr Chand said.
He said local cows produced about four litres of milk per day - which is just over one-tenth of that produced by the average New Zealand cow of 30 litres.
"The New Zealanders said that milking sheds should also be close to where the cows graze - it helps in the cows' productivity," he said.
Marphonia Farms has formed a partnership with Hiway Stabilisers to lease land in Deuba for 30 years, with a review over a further 30 years.