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Demand for dairy products in the Asian region has doubled since 1980 and, after more than half a century of declining real prices for dairy products, there are strong signs of a structural change in the global dairy sector that could make it attractive for investment. This offers livelihood and rural development opportunities for smallholder dairy producers in Asia who currently supply three-quarters of domestic consumption needs in a region projected to be the largest growing market over the next decade.

There are many successful business models through which smallholder milk producers in Asia have gained sustainable access to markets. However, to date, many of the insights on supporting inclusion of smallholder dairy producers are scattered throughout the literature. Building on two smallholder dairy workshops, organized in 2008 by the regional office of the Food and Agriculture Organization of the United Nations (FAO) in Bangkok, of which the first workshop was organized in cooperation with the Common Fund for Commodities (CFC), this publication presents a compilation of experiences and lessons learned from nine countries in the Asian region. It includes generic characterizations and specific models and factors that have influenced smallholder participation in dairy food chains – both good and bad. It also provides the context for regional growth in the sector and some practical guidelines on appropriate/inappropriate support to the sector.

FAO’s objective in fostering Asian smallholder dairy development is not only in consideration of livelihood opportunities for small farmers but in recognition that investment in dairy has important spin-offs for rural development and nutrition. It is estimated that one additional off-farm job is created for each 10-20 litres of milk marketed per day. On the consumption side, the nutritional benefits of increasing the productivity of milk animals by just 20 percent could provide a daily glass of milk for every Asian child.

It is hoped that this publication will be useful for dairy stakeholders in the region, up and down the value chain, as they examine opportunities for sector investment and development. The lessons contained herein link decisions from the policy side to those influencing on- and off-farm issues related to enhancing efficiencies and returns from dairy value chains.

FAO, in collaboration with the Animal Production and Health Commission in Asia (APHCA), has a long-standing commitment to smallholder dairy development in the region. This publication is part of a broader regional initiative undertaken in collaboration with the CFC to provide guidance to stakeholders in the region and mobilize resources into a sector that holds vibrant opportunities for poverty alleviation, nutrition enhancement and broader economic development in rural areas.

Amb Ali Mchumo
Managing Director
Common Fund for Commodities

He Changchui
Assistant Director-General and
FAO Regional Representative for Asia and the Pacific

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