Ruminant livestock are a major component of agricultural systems in tropical countries. In smallholder systems, which dominate tropical agriculture ruminants are important because they produce much more than food: they provide direct cash income; they are capital assets; they produce manure for use as fertiliser and fuel; and they may be a source of power for transport and cultivation. Nevertheless one function, the production of milk for human food, is often the primary reason for keeping livestock, whether by pastoralists to meet their subsistence needs in arid and semi-arid regions, or by pert-urban smallholder farmers as a source of income from milk sales.
Dairy production is a biologically efficient system that converts large quantities of roughage, the most abundant feed in the tropics, to milk, the most nutritious food known to man. As Walshe et al. (1991) pointed out, where there is access to a market, dairying is preferred to meat production since it makes more efficient use of feed resources and provides a regular income to the producer. It is also more labour intensive and supports substantial employment in production, processing and marketing. Higher levels of production than those achieved in traditional tropical systems, whether from buffaloes, cattle, camels or small ruminants, often require the introduction of specialised dairy breeds and increased levels of inputs (nutrition and health care) and good linkages to markets, both for milk sales and input acquisition. Thus, the intensification of smallholder livestock systems through the adoption of dairy production is generally concentrated in areas with good infrastructure close to major markets, although less intensive production may occur in other, more distant areas (Walshe et al., 1991). These market factors, therefore, play a major part in determining the type of dairy production systems found in the tropics, and they are particularly important influences on smallholder dairy development.
The challenge represented by the expanding demand for milk and dairy products in tropical countries is great, and the resultant opportunities for smallholders are large. The world's human population is expected to increase from 5.4 billion in 1990 to approximately 7.2 billion in 2010. Most of the increase will be in tropical developing countries, where there will be a marked shift from rural areas to urban centres, with major shifts in patterns of food production, marketing and consumption. In Latin America and the Caribbean (LAC), for example, total milk production has increased by approximately 2% per year since 1976, yet it has failed to keep up with human population growth. Tropical LAC produced 88% of its milk requirements during 1984-1991; by the year 2000 it is estimated that the deficit will be 9 million tonnes (Sére, 1990).
The lag in the domestic supply of milk relative to demand in the tropics has resulted from several factors. On the demand side, rapid increases in per caput income especially in Southeast Asia, urbanization and high income elasticities of demand have fuelled increases in per caput consumption. On the supply side, low animal productivity, inappropriate technologies, inadequate research and extension support poor infrastructure and unfavourable external conditions have contributed to the poor performance of the livestock sector in general, and of the dairy sub-sector in particular (Williams et al., 1995). Until recently many national policies made imported dairy products more available and affordable than domestically produced equivalents but structural adjustment programmes in for example, sub-Saharan Africa have improved the incentives for domestic agricultural and dairy production (Staal et al., 1997b).
Despite these changes, the volume of global milk output has not changed markedly over recent years because of counterbalancing forces: the substantial growth in milk output in Asia, Latin America and Oceania has been offset by a steep decline in output in eastern Europe and the former USSR (Griffin, 1997). During the next ten years, strong growth of milk production is expected in Asia and Latin America, where consumption is growing fastest, with global trends resulting in a shift in the balance of milk production away from developed to the developing countries. By 2000, developing countries are expected to account for 40% of world milk production, a share which is expected to grow further (Griffin, 1997). This shift will increase the importance of milk other than that from cows; while 99% of the milk output of the developed countries comes from cows, almost one third of milk production in the developing countries comes from buffaloes, goats, camels and sheep. Buffalo milk, for example, accounts for approximately half of the 67 million tonnes of milk produced in India (Aneja and Puri, 1997).
The increased demand for milk and dairy products in the tropics, where low-income groups dominate the market, is expected to favour the informal market, particularly where milk is produced primarily by small- and medium-scale producers. In all such regions, the success of the informal market is based on consumer reluctance to pay the extra costs of pasteurization and packaging. In Nicaragua, for example, the modern processing sector handles less than 40% of total milk production; the remainder is marketed through the informal sector where approximately half is sold as unprocessed milk, 40% is used for cheese and the rest mainly for cream, butter and fermented milk. The informal sector is growing more quickly because of the higher returns if the farmer produces cheese on the farm or sells milk to vendors or small-scale processors (Anon., 1997).
In general, therefore, dairy production systems in the tropics are concentrated near consumption centres and it is no coincidence that cattle and rural human population densities are highly correlated (Kruska et al., 1997), with specialized smallholder (and large scale) dairy farms generally located close to (pert-urban) or within (intra-urban) major markets, or more distant when there is an efficient market infrastructure. On the other hand, the systems of production and their productivity are influenced by agro-ecological factors and traditional consumption habits.
