2 vinod ahuja_-_dairying_in_asia
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On December 8 and 9, a Dairy Expert Roundtable Meeting on “Competitive Dairy Value Chains in Southeast Asia” was held in Muak Lek, Thailand. In this regional meeting, participants from six......

On December 8 and 9, a Dairy Expert Roundtable Meeting on “Competitive Dairy Value Chains in Southeast Asia” was held in Muak Lek, Thailand. In this regional meeting, participants from six countries in Southeast Asia discussed how the relatively small dairy value chains could be more competitive and sustainable.

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  • 1. Dairying in Asia:Opportunities, challenges and some lessons Vinod Ahuja Livestock Policy Officer Food and Agriculture Organization of the UN Regional Office for Asia and the Pacific Bangkok
  • 2. Growth in global dairyproduction: 400 1995 2007 350Million tonnes 300 250 200 150 100 50 0 Developed Countries Developing Countries
  • 3. With Asia leading the way200 1995150 2007100 50 0 Asia LAC SSA MENA
  • 4. Consolidating its global position in milk production 800 Asia Rest of the world 700 600 500 Million tonnes 400 36% 300 200 100 0 1995 2000 2005 200920%
  • 5. Within Asia300250 South Asia East Asia South East Asia Central Asia200 Western Asia 21%150100 63% 50 66% 0 1995 2000 2005 2009
  • 6. Main contributors . . .300 %250 26 India Pakistan China Others200 16%150 14%100 37 % 50 44% 46% 0 1981 1991 2001 2009
  • 7. But wide range of growth rates . . . Sri Lanka Mongolia Nepal Indonesia Pakistan India ThailandPhilippinesBangladesh China Vietnam 0 2 4 6 8 10 12 14 16 CAGR (percent, 2001-09)
  • 8. Consumption constantlyoutpacing production 25 Asian dairy imports 20 Million tonnes 15 10 5 0 1990 1995 2000 2005 2007
  • 9. Million tonnes D ev 0 50 100 150 200 250 el op Pa e ki d M sta on n go lia In di N a Sr ep consumption growth i L al an ka K o Yet tremendous room for Th re ai a la nd C M hi ya na nm ViB et ar an N gl am ad es h
  • 10. What about productivity? Milk productivity across major regions of the world 10000 Asia 9000 Africa 8000 Europe North America 7000 Oceania World g n a er K /a im l/y a 6000 5000 4000 3000 2000 1000 0 1961 1971 1981 1991 2001 2007
  • 11. Wide variation across countries 3000 Thailand 2500 2000 Vietnam g/animal/year 1500 Pakistan K 1000 India China 500 Sri Lanka 0 Bangladesh 1961 1971 1981 1991 2001 2009
  • 12. Huge opportunities for Productivity gains Quality gains Substituting imports Spreading risks, improving competitiveness Protecting environment through mixed/integrated farming Nutrition, income, jobs . . .
  • 13. Changing production and marketlandscape 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
  • 14. How do small producers feature invarious countries? 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
  • 15. Where do we go from here?
  • 16. Lessons learned case studies and regionalstrategy and investment plan forsmallholder dairy development in Asia
  • 17. What are some of the models?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 recentlyChina: 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 marketsMongolia: total cow to consumer approach; strong socio-cultural aspects, each link in dairy chain has to be sustainable and profitable; generic branding/marketing
  • 18. Year-to-year growth (%) 0 1 2 3 4 5 600-01 Bangladesh01-0202-0303-0404-0505-0606-0707-08
  • 19. Year-to-year growth (%) India 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 500-0101-0202-0303-0404-0505-0606-0707-08
  • 20. Year-to-year growth (%) 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 Pakistan00-0101-0202-0303-0404-0505-0606-0707-08
  • 21. Year-to-year growth (%) 0 1 2 3 4 5 600-01 Sri Lanka01-0202-0303-0404-0505-0606-0707-08
  • 22. Philippines 6 1995: Creation of national dairy authority 5 1995-2000: Experimentation with large commercial dairy farms Year-to-year growth (%) 4 2001: Launch of dairy zone model 3 2 1 0 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08
  • 23. Year-to-year growth (%) -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 Mongolia00-0101-0202-0303-0404-0505-0606-0707-08
  • 24. Year-to-year growth (%) -6 -4 -2 0 2 4 6 8 10 12 14 Thailand00-0101-0202-0303-0404-0505-0606-0707-08
  • 25. Year-to-year growth (%) China 0 5 10 15 20 2597-9898-9999-0000-0101-0202-0303-0404-0505-0606-0707-08
  • 26. Year-to-year growth (%) 0 5 10 15 20 25 30 Vietnam97-9898-9999-0000-0101-0202-0303-0404-0505-0606-0707-08
  • 27. What are some general lessons?
  • 28. Some lessons from FAO studies It is important to carefully target smallholder dairy development interventions (Philippines). Same is true of pro-poor, social programmes need 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)
  • 29. 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
  • 30. Key strategic pillars Human resources and knowledge Productivity and management competitiveness Market linkages Enabling environment
  • 31. FAO-CFC-APHCA partnership Project National implementation Govern- support and ments leadership Dairy Asia Network Milk FAO APHCA producers TCP on School CFC Project milk funding
  • 32. Elements of the CFC proposal • Country coverage • Thailand, Myanmar and Bangladesh • Three components • Milk Production Enhancement • Milk Marketing Enhancement • Capacity Building and Information Dissemination • Duration: 4 years
  • 33. Elements of the FAO proposal onschool milk • Country coverage • Thailand, Myanmar and Bangladesh • The components • Review of school milk programmes • Design and/or strengthen school milk programmes with a targeting of schools in more rural areas • Assess alternative and innovate funding options for financing school milk programs • Link the development of these local programmes with opportunities for smallholder dairy participation • Support the development of SMEs for manufacturing and packaging value- range of semi value-added dairy products • Duration: 2 years
  • 34. Elements of the APHCA proposal onAsia Dairy Network • Country coverage • All APHCA countries • The components • Creation of an information and knowledge network • Creation of a demand driven dairying group with a membership base that included dairy firms, dairy institutions, producer organizations, dairy research organizations, and other concerned regional and international partners • Duration: 4 years
  • 35. Thank you