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Global Trends and their Implications for Dairy Development South East Asia      Competitive Dairy Value Chains in South Ea...
Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends an...
Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends an...
General characteristics in SE Asia  No long tradition in milk production and dairy  consumption  Milk mainly produced by s...
Small scale dairy farm Indonesia
Medium scale dairy farm in Thailand
Large scale dairy farm Malaysia
Milk collection from small scale producers
Some figures (IFCN, 2010)              Milk       Cons.       Milk price    Farmers              Product.   L per       Fa...
Milk prices in 2008 in US $ (source: IFCN)
Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers & trends and ...
World wide drivers for dairy development   Increased demand for dairy products     Population growth     Income growth & u...
Dairy trends – Policy related trendsLess market protection (WTO, FTA’s) >>more fluctuating world market prices: World mark...
Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis o...
Rate of self sufficiency in dairy products,2008 (IFCN)
Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis o...
Sustainability of dairy value chainsPeople, Planet and Profit (3P):  Social sustainability: People  Environmental (ecologi...
Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis o...
What are the implications for South East Asia?
Less market protection- Issues & optionsIssue:  Level of market protection decreases due to FTA’sOptions: Create a more co...
Less government - Issues & optionsIssues:  Privatization of services  Transition of government role from actor to  facilit...
Improving Sustainability- Issues and options Social issues:    Inclusion of small holders into modern dairy chains    Anim...
Manure handling needs improvement
Dairy Trends- Market Increase in scale of production and processing Value Chain Development   More value out of milk,   Ve...
Increase scale of production in Netherlands Year                    Netherlands    Netherlands                            ...
Dairy Trends- Market Increase in scale of production and processing Value Chain Development   More value out of milk,   Ve...
Value chain development means: Taking the market and/or development of the market as starting point Cooperation and coordi...
Value chain development – Issues and options (1) Issues:   Distribution of added value in the chain   Lack of coordination...
Dairy Trends- Market Increase in scale of production and processing Value Chain Development   More value out of milk,   Ve...
Total Chain Quality Management and Chain approach                                                 Consumer Suppliers      ...
Control of quality of rawmilk and dairy products
Food safety – Issues and options (2)Issues:  Improvement of raw milk quality and quality  control at different stages in t...
Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends an...
Which approach to take for development?Lessons learnt from other countries/ experiences  indicate:  Dairy development need...
Conclusion Dairy development with a value chain perspective opens opportunities to address issues in an integrated way Dev...
Thank you for your attention
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1 bram wouters

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  1. 1. Global Trends and their Implications for Dairy Development South East Asia Competitive Dairy Value Chains in South East Asia Dairy Expert Round Table Meeting Muak Lek, Thailand, December 8 & 9, 2010 Mr. Bram Wouters Wageningen UR Livestock Research
  2. 2. Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends and their implications for South East Asia Conclusions
  3. 3. Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends and their implications for South East Asia Conclusions
  4. 4. General characteristics in SE Asia No long tradition in milk production and dairy consumption Milk mainly produced by small holders Industrialized milk processing based for a large part on import Formal and informal marketing channels Level of market protection and support of government varies
  5. 5. Small scale dairy farm Indonesia
  6. 6. Medium scale dairy farm in Thailand
  7. 7. Large scale dairy farm Malaysia
  8. 8. Milk collection from small scale producers
  9. 9. Some figures (IFCN, 2010) Milk Cons. Milk price Farmers Product. L per Farmers share of * 1000 t capita/year US $/ litre cons. priceThailand 830 20 0.47 44Indonesia 670 10 0.37 --Malaysia 60 34 0.58 30Vietnam 27 11 0.43 41Philippines 14 14 0.54 38
  10. 10. Milk prices in 2008 in US $ (source: IFCN)
  11. 11. Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers & trends and their implications for South East Asia Conclusions
  12. 12. World wide drivers for dairy development Increased demand for dairy products Population growth Income growth & urbanization changing food patterns and supermarkets National interests Food security Import substitution or export (foreign exchange position) Diversification agriculture Rural development Food security and improved nutrition Income generation & extra employment opportunities Regular income source for daily needs
  13. 13. Dairy trends – Policy related trendsLess market protection (WTO, FTA’s) >>more fluctuating world market prices: World market price 2009: 26 US$/ 100 kg April 2010: 43 US$/ 100 kgMore emphasis on self-sufficiency in foodEmphasis on sustainability (climate change, energy)Less government support- privatization of services
  14. 14. Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis on sustainability (climate change, energy)Less government support- privatization of services
  15. 15. Rate of self sufficiency in dairy products,2008 (IFCN)
  16. 16. Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis on sustainability (climate change, energy)Less government support- privatization of services
  17. 17. Sustainability of dairy value chainsPeople, Planet and Profit (3P): Social sustainability: People Environmental (ecological)sustainability: Planet Economic sustainability: Profit
  18. 18. Dairy trends – Policy related trendsLess market protection (WTO, FTA’s)More emphasis on self-sufficiency in foodEmphasis on sustainability (climate change, energy)Less government support- privatization of services
  19. 19. What are the implications for South East Asia?
  20. 20. Less market protection- Issues & optionsIssue: Level of market protection decreases due to FTA’sOptions: Create a more competitive local chain Lower cost price (feeding costs) Increasing scale of production (requires more land) Higher chain efficiency (transaction costs, quality) More value out of local milk: branding of “fresh” milk
  21. 21. Less government - Issues & optionsIssues: Privatization of services Transition of government role from actor to facilitator, regulator and supervisorOptions: Capacity building private sector to take over services Define responsibilities and roles of government/ private sector Development of government instruments to facilitate
  22. 22. Improving Sustainability- Issues and options Social issues: Inclusion of small holders into modern dairy chains Animal welfare: heat stress, housing Options Development of value chains, producers organisations Improvement of farm management and farm designs Ecological issues: Nutrient flows and recycling (waste management) Higher productivity and better use of resources (feed, soil) Options: Improvement of farm management Economic issues: competiveness/ profitability Options: Lower cost price and higher efficiency at farm level and in chain
  23. 23. Manure handling needs improvement
  24. 24. Dairy Trends- Market Increase in scale of production and processing Value Chain Development More value out of milk, Vertical integration: from farm to supermarket Emphasis on food safety and standards
  25. 25. Increase scale of production in Netherlands Year Netherlands Netherlands 1970 2007 Farms with dairy cows 116,000 21,000 Total number of cows 1,900,000 1,400,000 Number of cows per farm 16 65 Area of grassland + forage crops per farm 13 39 (Hectares)
  26. 26. Dairy Trends- Market Increase in scale of production and processing Value Chain Development More value out of milk, Vertical integration: from farm to supermarket Emphasis on food safety and standards
  27. 27. Value chain development means: Taking the market and/or development of the market as starting point Cooperation and coordination among actors in the chain to increase added value and quality Taking sustainability as a condition for development Adopting an integral approach when developing the chain Taking as starting point the development stage at local level
  28. 28. Value chain development – Issues and options (1) Issues: Distribution of added value in the chain Lack of coordination, cooperation in the chain Low efficiency-reduction of transaction costs Input and service provision to farmers Options Improve the organisational level of actors Develop better linkages among actors in the chain Improvement of milk collection systems
  29. 29. Dairy Trends- Market Increase in scale of production and processing Value Chain Development More value out of milk, Vertical integration: from farm to supermarket Emphasis on food safety and consumer
  30. 30. Total Chain Quality Management and Chain approach Consumer Suppliers Authorities Retail Farmers Collection Dairy Distribution industry
  31. 31. Control of quality of rawmilk and dairy products
  32. 32. Food safety – Issues and options (2)Issues: Improvement of raw milk quality and quality control at different stages in the chainOptions: Quality based payment systems Improvement of farm management and advise/services to farmers Self regulation of quality control with supervision of government
  33. 33. Content of the presentation Introduction Some characteristics dairy production in SE Asia World wide drivers and trends and their implications for South East Asia Conclusions
  34. 34. Which approach to take for development?Lessons learnt from other countries/ experiences indicate: Dairy development needs an integrated approach For example: a value chain approach Possible options for development should take into account the local context Stepwise development is more sustainable
  35. 35. Conclusion Dairy development with a value chain perspective opens opportunities to address issues in an integrated way Development of a value chain approach will lead to more cooperation, quality improvement and added value A value chain approach could lead to better inclusion of small holders in modern chains Dairy production in SE Asia will have a future BUT requires more competitive and sustainable milk production and a good enabling environment
  36. 36. Thank you for your attention
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