The Chiang Mai Declaration (February 2008)
A glass of Asian milk a day for every Asian child
Background: Two-thirds of the world’s 800 million undernourished people live in the Asia-Pacific region. Just one daily glass of milk would contribute significantly to improving the nutrition of children in the region, with all the attendant benefits related to health and education. Boosting the productivity of milking animals by just 20 percent could provide the milk required for a daily glass of Asian milk for every Asian child.
Around 80 percent of milk in Asia is produced by smallholders and there are also tens of millions of traders and dairy entrepreneurs, small and large. The smallholder dairy sector produces multiple benefits for its numerous stakeholders including: (i) poverty reduction though regular family income; (ii) off-farm jobs estimated to be one job per 10-20 litres per day of milk marketed; (iii) environmental benefits through balanced and integrated farming systems; (iv) low energy use compared with industrialized dairy production; and (v) improved household food security and nutrition.
Demand for dairy products in the region has doubled since 1980, and in many countries production has lagged behind demand with the result that import dependency has increased. Imports are estimated at 24 million tonnes in 2007, valued at approximately US$14 billion, and are estimated to supply as much as half the formal dairy sector. The cost of imports has surged recently with the global increase in prices for dairy products. This strong marketing environment provides attractive opportunities for smallholders to improve the productivity of their animals substantially through improved feeding and breeding practices. In so-doing smallholders can contribute towards making the region more food-secure, and helping to achieve the Millennium Development Goals of halving poverty and under nutrition.
The strategy process: There are many successful business models through which smallholder milk producers have gained sustainable access to markets. The Strategy has been formulated to take advantage of the many opportunities currently available to apply such models across the very wide range of circumstances in the region. The strategy formulation process was supported by CFC, APHCA and FAO and involved a structured, participatory and market-oriented approach to: (i) undertake rapid “lessons learned” studies in nine countries to identify business models and factors that have influenced smallholder participation – both good and bad; (ii) complete three more complete value chain studies in selected countries; and (iii) convene a workshop in Chiang Mai, Thailand, attended by 53 delegates from 18 countries. The workshop formulated the key elements of the Strategy and reached a strong consensus on the way forward.
Rationale: The rationale underlying the Strategy is that: (i) rural poverty remains a major problem in Asia and rural-urban income disparities are increasing; (ii) Asian demand for dairy products is growing rapidly and is increasingly supplied by imports, with prices increasing and likely to remain strong; (iii) smallholder dairy development provides an outstanding opportunity to generate regular income and improve rural livelihoods; (iv) a number of commercially competitive smallholder dairy models have been demonstrated, and the dos and don’ts are becoming well understood; (v) there is growing awareness of the importance of agriculture (including dairy) in social and economic development; (vi) well-targeted public investments in the dairy food chain have the potential to leverage significant private investments. However, it is clear that many elements of the enabling environment for smallholder dairy development are lacking and that knowledge networking on a regional basis can support effective policy formulation and mobilize resources for targeted investments in the sector. Consequently, regional stakeholders have called for a comprehensive regional strategy for smallholder dairy development, one which builds on lessons from the region which translates in effective national interventions
The strategic vision elaborated by the Chiang Mai workshop is: “Asian milk for health and prosperity.” The mission statement agreed at the workshop is: “Improving the competitiveness of smallholder milk producers to provide more and better quality milk and dairy products to Asian consumers.” The vision and mission will be addressed through six strategic objectives: (i) a glass of Asian milk a day for every Asian child; (ii) regional self-reliance1 and heightened dairy food security; (iii) smallholders better linked to markets and enabled to become commercial dairy entrepreneurs; (iv) each link in the dairy food chain becomes more efficient, productive and profitable in a socially and environmentally responsible manner, for delivering affordable milk and dairy products to urban consumers; (v) higher earnings for safer quality milk; and (vi) regional and national recognition of the multiple benefits of smallholder dairy production.
In considering the vision, mission and objectives of the strategy, the workshop identified a number of key strategic priorities which include:
Strategic pillars: The Strategy will address the challenges and objectives outlined above through strategic interventions under four mutually reinforcing pillars as prioritised and ranked by the workshop delegates:
Pillar 1: Human resource development and knowledge management through: (i) providing smallholders and other value chain actors appropriate skills training; (ii) effective M&E of sectoral development; and (iii) support for regional collaboration in knowledge management through a smallholder dairy network.
Pillar 2: Improving the productivity and competitiveness of smallholder milk producers through: (i) preparing a “menu of options” for dairy development models; (ii) selecting dairy development models appropriate for local conditions; (iii) assisting smallholder dairy sector to compete for resources and compete in product markets; and (iv) assisting smallholders to increase milk yields, quality and profitability.
Pillar 3: Strengthening the linkages between farmers and consumers to deliver a quality product at a fair price through: (i) improving farmer access to marketing channels; (ii) increasing opportunities for smallholders to access the formal sector; (iii) strengthening price incentives to deliver quality milk; (iv) creating competitive supply chain conditions; (v) creating fair and transparent pricing systems; (vi) diversifying the range of dairy products on offer; (vii) educating consumers on the nutritional benefits of dairy products; (viii) stimulating consumer demand; and (ix) reducing losses in the dairy chain.
Pillar 4: Enhancing the enabling environment through: (i) developing a smallholder inclusive policy framework; (ii) creating a legal and regulatory framework conducive for smallholder dairy development; and (iii) supporting the development of a favourable macro-economic framework.
Beneficiaries: Potential direct beneficiaries include some 200 million smallholder families as well as milk producers, collectors, processors, service providers, finance and micro-finance institutions, regulatory institutions and industry associations etc. Consumers, especially children, will also benefit through more and safer dairy products at affordable prices. The Strategy will also target policy-makers and legislators, national dairy bodies and all the actors along the value chain, including larger-scale producers and processors through collaborative arrangements that include smallholder enterprises. The private sector is expressly targeted for its crucial role in providing productivity-enhancing goods and services and market access.
Implementation and next steps: The Strategy will be implemented through a ten-year investment plan, estimated to cost around US$ 250 million. The majority of these investments will take place at country, rather than regional level. Nevertheless, the Strategy also supports the establishment of a regional platform for dairy development to link stakeholders around the region through technical, policy and information networking systems. The detailed investment programme will be finalised towards the end of 2008 and will depend on the interest of individual governments and the appeal of the Strategy to investors from the private sector, regional and sub-regional organizations such as ASEAN, SAARC and the International Financing Institutions, Regional Financing Institutions and International Agencies. An immediate action plan has been prepared to support this process. Meanwhile, partners have already committed US$ 15.6 million for key interventions, which will commence immediately. Other public and private sector organizations have also indicated their strong interest in operationalising the Strategy.
Desired scenarios by 2018: Implementation of the regional dairy strategy and investment plan shall result in the following outcomes in participating countries:
1Self-reliance does not necessarily imply self-sufficiency.
2This would include south-south cooperation, particularly including farmer-to-farmer exchanges within Asia, to promote and validate dairy buffalo breeding and carabao milk product technologies which constitutes a potent tool for boosting productivity and returns from the indigenous carabao. The exchanges will be designed to result in robust benchmarking on specific productivity indicators (milk price to feed price ratios, calving intervals, total milk per lactation periods) among producers.
