2 vinod ahuja_-_dairying_in_asia
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Dairying in Asia: Opportunities, challenges and some lessons
Vinod Ahuja
Livestock Policy OfficerFood and Agriculture Organization of the UN
Regional Office for Asia and the PacificBangkok
Growth in global dairy
production:
0
50
100
150
200
250
300
350
400
Developed Countries Developing
Countries
Mil
lio
n t
on
nes
1995 2007
With Asia leading the way
0
50
100
150
200
Asia LAC SSA MENA
1995
2007
Consolidating its global
position in milk production
0
100
200
300
400
500
600
700
800
1995 2000 2005 2009
Million tonnes
Asia Rest of the world
20%
36%
Within Asia
0
50
100
150
200
250
300
1995 2000 2005 2009
South Asia East Asia
South East Asia Central Asia
Western Asia
63%
66%
21%
Main contributors . . .
0
50
100
150
200
250
300
1981 1991 2001 2009
India Pakistan China Others
44%46%
26%
14%
37%
16%
But wide range of growth rates . . .
0 2 4 6 8 10 12 14 16
Vietnam
China
Bangladesh
Philippines
Thailand
India
Pakistan
Indonesia
Nepal
Mongolia
Sri Lanka
CAGR (percent, 2001-09)
Consumption constantly
outpacing production
0
5
10
15
20
25
1990 1995 2000 2005 2007
Mil
lio
n t
on
nes
Asian dairy imports
Yet tremendous room for
consumption growth
0
50
100
150
200
250
Dev
elop
ed
Pak
ista
nM
ongo
liaIn
dia
Nep
al
Sri
Lan
kaK
orea
Thai
land
Chi
naM
yanm
arV
iet N
am
Ban
glade
shM
illio
n t
on
nes
What about productivity?
Milk productivity across major regions
of the world
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1961 1971 1981 1991 2001 2007
Kg/anim
al/year
Asia
Africa
Europe
North America
Oceania
World
0
500
1000
1500
2000
2500
3000
1961 1971 1981 1991 2001 2009
Kg/a
nim
al/year
Wide variation across countries
Thailand
Vietnam
China
India
Pakistan
Sri Lanka
Bangladesh
Huge opportunities for
� Productivity gains
� Quality gains
� Substituting imports
� Spreading risks, improving competitiveness
� Protecting environment through mixed/integrated farming
� Nutrition, income, jobs . . .
�
�
� Continuing strong positive outlook for global dairy industry but increased volatility in international prices
� Rapidly declining common resource base and growing feed costs
� Increasing environmental concerns and enforcement
� Increased consumer demand for food safety, convenience, quality
� Growing intensity and pressure to intensify and scale up livestock systems for higher outputs per unit of land/ water/labour
� Despite rapid growth and scaling up smallholder continue to produce over 90 percent of local milk marketed in Asia
Changing production and market
landscape
India: 70 million households have dairy cattle, 52 million
linked to smallholders (13 million to coops).
China: 2 million dairy farms in 2005 with farms < 20 cows
accounting for 65% of milk production.
Philippines: 13,000 families engaged in smallholder dairy with employment of 17,000.
Pakistan: 55 million smallholders
Mongolia: 2 million farmers in 2006 (80% hold dairy cattle).
Sri Lanka: 70% of 3.5 million smallholder own dairy cows.
Bangladesh: 80 million households are smallholder dairy farmers.
Smallholder dairy critical to rural sectors
How do small producers feature in
various countries?
Where do we go from here?
Lessons learned case studies and regional
strategy and investment plan for
smallholder dairy development in Asia
Philippines: Dairy Development Zones (targeted development based on priority indicators).
Pakistan: Haleeb case (private sector linkages to smallholder holders)
India: Anand model linked to Operation Flood activities.
Thailand/Bangladesh: strong role of cooperatives (supported by development interventions)
Sri Lanka: an example of very limited support for dairy until recently
China: Inner Mongolia/Heilongjiang-examples of third part milk collection stations; dairy barns, private sector investment linkages to smallholders.
Vietnam: strong dairy development through government support (down to local levels) supported by privatization of markets
Mongolia: total cow to consumer approach; strong socio-cultural aspects, each link in dairy chain has to be sustainable and profitable; generic branding/marketing
What are some of the models?
0
1
2
3
4
5
6
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Bangladesh
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
India
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Pakistan
0
1
2
3
4
5
6
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Sri Lanka
0
1
2
3
4
5
6
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Philippines
1995: Creation of national dairy authority
1995-2000: Experimentation with large commercial dairy farms
2001: Launch of dairy zone model
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Mongolia
-6
-4
-2
0
2
4
6
8
10
12
14
Year-
to-y
ear gro
wth
(%
)
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Thailand
0
5
10
15
20
25
Year-
to-y
ear gro
wth
(%
)
97-9
8
98-9
9
99-0
0
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
China
0
5
10
15
20
25
30
Year-
to-y
ear gro
wth
(%
)
97-9
8
98-9
9
99-0
0
00-0
1
01-0
2
02-0
3
03-0
4
04-0
5
05-0
6
06-0
7
07-0
8
Vietnam
What are some general lessons?
� It is important to carefully target smallholder dairy development interventions (Philippines). Same is true of pro-poor, social programmesneed to be carefully targeted and are usually only sustainable if linked to remunerative markets (Bangladesh)
� Governments have to careful about interventions in the sector, including pricing policies (Pakistan) and dairy cow loan schemes (Bangladesh, Vietnam, Mongolia)
� In some cases, Governments need to be concerned about monopoly power of processors (floor pricing for milk might work in this situation) (China)
� Government investment in large operations usually does not work (Philippines)
� School milk programmes, when implemented with a focus on smallholders, can support dairy development (as well as generating long term demand for dairy products) (Thailand, Philippines)
Some lessons from FAO studies
� Industry institutions and smallholder groups (associations, cooperative etc) can have a pivotal role in supporting dairy development (India, Philippines, Thailand)
� Creative and carefully thought out linkages with private sector (which includes technical assistance, financial support) can allow smallholder to move up into a different marketing chain (Philippines, Pakistan)
� Smallholders need an accessible and affordable complete package of support services (animal health, breeding, extension, finance, etc) to produce milk competitively (Bangladesh, India, Mongolia).
� Milk quality and attractive product branding/presentation are pre-requisites for persuading modern urban consumers to switch from imports to milk produced by local smallholders (China, India, Mongolia, Philippines)
� Low tariff regimes facilitating importation of cheap dairy products have hampered development of local dairy industry
Some lessons from FAO studies
Key strategic pillars
Human resources
and knowledge
management
Enabling environment
Productivity and
competitiveness
Market linkages
FAO-CFC-APHCA partnership
FAO
CFC
APHCA
National
Govern-
ments
Milk
producers
Dairy Asia
Network
Project funding
TCP on
School milk
Project
implementation support and leadership
Elements of the CFC proposal
• Country coverageCountry coverageCountry coverageCountry coverage
• Thailand, Myanmar and BangladeshThailand, Myanmar and BangladeshThailand, Myanmar and BangladeshThailand, Myanmar and Bangladesh
• Three componentsThree componentsThree componentsThree components
• Milk Production Enhancement Milk Production Enhancement Milk Production Enhancement Milk Production Enhancement
• Milk Marketing EnhancementMilk Marketing EnhancementMilk Marketing EnhancementMilk Marketing Enhancement
• Capacity Building and Information DisseminationCapacity Building and Information DisseminationCapacity Building and Information DisseminationCapacity Building and Information Dissemination
• Duration: 4 yearsDuration: 4 yearsDuration: 4 yearsDuration: 4 years
Elements of the FAO proposal on
school milk
• Country coverageCountry coverageCountry coverageCountry coverage
• Thailand, Myanmar and BangladeshThailand, Myanmar and BangladeshThailand, Myanmar and BangladeshThailand, Myanmar and Bangladesh
• The componentsThe componentsThe componentsThe components
• Review of school milk programmesReview of school milk programmesReview of school milk programmesReview of school milk programmes
• Design and/or strengthen school milk programmes with a Design and/or strengthen school milk programmes with a Design and/or strengthen school milk programmes with a Design and/or strengthen school milk programmes with a targeting of schools in more rural areas targeting of schools in more rural areas targeting of schools in more rural areas targeting of schools in more rural areas
• Assess alternative and innovate funding options for financing Assess alternative and innovate funding options for financing Assess alternative and innovate funding options for financing Assess alternative and innovate funding options for financing school milk programsschool milk programsschool milk programsschool milk programs
• Link the development of these local programmes with Link the development of these local programmes with Link the development of these local programmes with Link the development of these local programmes with opportunities for smallholder dairy participation opportunities for smallholder dairy participation opportunities for smallholder dairy participation opportunities for smallholder dairy participation
• Support the development of Support the development of Support the development of Support the development of SMEsSMEsSMEsSMEs for manufacturing and packaging for manufacturing and packaging for manufacturing and packaging for manufacturing and packaging range of semi valuerange of semi valuerange of semi valuerange of semi value----added dairy productsadded dairy productsadded dairy productsadded dairy products
• Duration: 2 yearsDuration: 2 yearsDuration: 2 yearsDuration: 2 years
Elements of the APHCA proposal on
Asia Dairy Network
• Country coverageCountry coverageCountry coverageCountry coverage
• All APHCA countriesAll APHCA countriesAll APHCA countriesAll APHCA countries
• The componentsThe componentsThe componentsThe components
• Creation of an information and knowledge networkCreation of an information and knowledge networkCreation of an information and knowledge networkCreation of an information and knowledge network
• Creation of a Creation of a Creation of a Creation of a demand drivendemand drivendemand drivendemand driven dairying group with a membership dairying group with a membership dairying group with a membership dairying group with a membership base that included dairy firms, dairy institutions, producer base that included dairy firms, dairy institutions, producer base that included dairy firms, dairy institutions, producer base that included dairy firms, dairy institutions, producer organizations, dairy research organizations, and other organizations, dairy research organizations, and other organizations, dairy research organizations, and other organizations, dairy research organizations, and other concerned regional and international partnersconcerned regional and international partnersconcerned regional and international partnersconcerned regional and international partners
• Duration: 4 yearsDuration: 4 yearsDuration: 4 yearsDuration: 4 years
Thank you
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