Making smallholder dairy production more competitive could be a powerful tool for reducing poverty, raising nutrition levels and improving the livelihoods of rural people in many developing countries, FAO said in a new report on smallholder milk production published recently.
"Global milk demand is growing by 15mn tonnes per year, mostly in developing countries. Production of this increased volume of milk by small-scale dairy farmers would create approximately three million jobs per year in primary production alone," said Samuel Jutzi, Director of FAO's Animal Production and Health Division.
"This presents a unique opportunity for establishing sustainable dairy chains that can meet the demands of local consumers and the world market. Judicious development of the dairy sector could thus make a substantial contribution to achieving the Millennium Development Goal of eradicating hunger and poverty," Jutzi said.
It is estimated that around 150mn small-scale dairy farming households, around 750mn people, are engaged in milk production, the majority of them in developing countries, according to the study The Status and Prospects for Smallholder Milk Production - A global Perspective, jointly published with the International Farm Comparison Network (IFCN). Globally, the mean dairy herd size is around two cows providing an average milk yield of 11 litres per farm per day.
Throughout the world, there are around six billion consumers of milk and milk products, the majority of them in developing countries.
Competitive and resilient
Across the countries analyzed in the FAO/IFCN study, small-scale milk producers have very competitive production costs and thus, if organized, have the potential to compete with large-scale, capital-intensive, ‘high-tech' dairy farming systems in developed and developing countries. With very few exceptions, smallholders achieve relatively high incomes per litre of milk. They are also comparatively resilient to rising feed prices as they usually only use small amounts of purchased feed.
Growing consumer demand for dairy products in developing countries, driven by population growth and rising incomes, offers important market opportunities for smallholders, the FAO/IFCN report said. The latter could also benefit from expected higher world market prices for dairy products.
Better farm management practices, expanding dairy herd sizes and increasing milk yields could easily improve smallholder labour productivity, which currently is rather low. "Dairy sector development can therefore be a potent tool for poverty reduction," the report said.