Chiang Mai/Bangkok – Skyrocketing milk powder prices prompt dairy industries in Asia to rethink linkages with smallholder dairy producers as they move to substitute imported milk powder by locally produced milk, an FAO statement said today.

Dairy consumption in Asia has tripled since 1980, and demand for milk and milk products continues to rise as large numbers of consumers become more affluent.

Strong local demand and decades-long competition from low-priced milk powder exports – often subsidized – has led to regional dairy imports increasing four-fold since the early 1980’s.

Asian dairy imports are estimated at 24 million tonnes in 2007, with imports as a share of consumption ranging from 1 percent in India to over 90 percent in the Philippines. In some Asian countries, particularly in Southeast Asia, nearly four out of five kg of consumed dairy products originates from developed countries.

But a more than doubling of milk powder prices over the past year offers unprecedented opportunities for sustainable milk production increases in the region. FAO sees a great prospect for smallholders to be part of this boom.

“Increasing access to lucrative and growing markets will result in not only increased milk production but higher local earnings throughout rural economies and better nutrition for rural families”, said Nancy Morgan, livestock policy officer at FAO’s regional office in Bangkok.

This is especially true since smallholder milk producers supply over 80 percent of the region’s milk. Local dairy development holds prospects for poverty reduction and livelihood enhancement and FAO estimates that small-scale dairying provides on average one job for every 20 litre of milk collected, processed and marketed.

Moving to fill the gap between smallholder dairy producers and market opportunities, the Animal Production and Health Commission for Asia (APHCA), the Common Fund for Commodities (CFC) and FAO are promoting further broad-based development and commercialization of smallholder dairy farms in Asia and the Pacific.

As a first step, public-private sector partnerships and political will for promoting smallholder dairy development is needed, inter alia by bringing private sector stakeholders, industry associations and producers together with policy makers and dairy experts.

Over 50 participants from 17 countries in the region will join with FAO/APHCA and the CFC during a 4-day workshop in Chiang Mai aimed at establishing an "actionable" roadmap for dairy development in the region, with a priority focus on smallholders.

Average food prices have witnessed a 40 percent rise during 2007 and the dairy sector is no exception.

For follow-up media inquiries, contact Nancy Morgan at email [email protected] or Thai cellular phone +66 89 045 2497


More information at:
http://www.aphca.org/reference/dairy/dairy.html