David Young, Private Sector Consultant
The task of formulating a smallholder dairy strategy for Asia is indeed a major challenge, and FAO, CFC and APHCA should be congratulated for supporting this initiative. The timing could not be better. After more than half a century of declining real prices for dairy products, there are signs of a structural change in the dynamics of the global dairy sector. This change may overcome one of the long-standing constraints to smallholder dairy development – low prices and profitability – and stimulate commercial incentives to connect farmers to markets. Of course no one knows whether the recent upsurge in prices will persist, but the signs are certainly more encouraging than they have been for many years.
There are other reasons for optimism too. Asia is home to a large and rapidly growing population of affluent consumers with either a strong tradition of dairy consumption, or changing food preferences in favour of high value animal products including dairy products. In most countries there is plenty of room for import substitution provided that local products are competitive in quality and safety. There is a vibrant private sector ready to capture commercial opportunities to intermediate between producers and consumers. Moreover, smallholder dairy development provides opportunities to address the persistent problem of rural poverty by transferring income from affluent urban households to their poorer rural counterparts, and improving food and nutritional security for poor rural and urban households.
The challenge
As challenging as formulating a regional strategy may seem, it is not the major challenge facing this workshop. Given all the excellent preparatory work that has been undertaken, I am confident that the workshop will succeed in articulating a relevant and robust strategy. The real challenge will emerge when you return to your home countries and proceed to adapt the strategy to your own situation, and implement it. I am sure all of us are aware of beautiful strategies that are never implemented. We must be determined not to let this happen here. The challenge therefore is to craft a strategy that will be implemented for the benefit of Asia’s millions of actual and potential smallholder dairy producers, and the consumers they supply.
Whilst not wishing to pre-empt the workshop deliberations, I would like to introduce a few ideas which may catalyse our thoughts on the characteristics of a relevant, robust and implementable smallholder dairy strategy for Asia:
Smallholder dairy in the broader development context
Smallholder dairy development can be seen as an enterprise-driven approach to livelihood enhancement and an instrument of rural poverty reduction. It is not an end in itself. In this regard it is worth thinking about dairy development as part of the rural poverty reduction agenda which has recently been re-invigorated in the 2008 World Development Report22 (WDR) which adopts agricultural development as its theme for the first time in 25 years. If we look through the report and substitute the word “dairy” for “agriculture” it presents some very interesting strategic ideas which this workshop might reflect upon.
First, there is the title of the report, “Agriculture for Development”. Why not “Dairy for Development (D4D)”? This focuses the agenda on people, not milk and cows, and that is a much more saleable vision of the future when it comes to procuring the necessary resources. WDR 2008 focuses on ways to generate rural jobs by diversifying into labor-intensive, high-value agriculture linked to a dynamic rural, nonfarm sector. Smallholder dairy development is an ideal way to achieve this outcome. It is consistent with the concept of a “new agriculture” of high-value products, entrepreneurship and jobs in the emerging rural, nonfarm economy.
WDR 2008 poses three key questions, which if applied here, would be as follows: (i) What can smallholder dairy do for development? (ii) What are effective instruments for using D4D? and (iii) How can D4D agendas best be implemented? If this workshop can provide answers to these three questions it will have done a great service to the rural poor of Asia.
WDR 2008 also recognises that agriculture operates in three distinct worlds: (i) subsistence agriculture-based; (ii) transforming; and (iii) urbanised23. In each, the D4D agenda differs in pursuing sustainable growth and reducing poverty. Most of the countries involved in this strategic process are in the transforming category, but also have sub-national regions in the other two categories. In transforming countries, rapidly rising rural-urban income disparities juxtaposed with extreme rural poverty are major sources of social and political tensions. Addressing these disparities requires a comprehensive approach that pursues multiple pathways out of poverty - shifting to high value agriculture, decentralising nonfarm economic activities to rural areas, and providing assistance to help move people out of agriculture. Here again dairy development is one of the attractive options. In urbanised regions D4D can help reduce remaining pockets of rural poverty if smallholders become direct suppliers in modern food markets and good jobs are created in agriculture and agro-industry.
Defining a D4D agenda for each country type (agricultural, transforming and urbanised), requires a combination of four policy objectives: (i) improved access to markets and establishment of efficient value chains; (ii) enhanced smallholder competitiveness and facilitation of market entry; (iii) improved livelihoods in subsistence farming and low-skill rural occupations; and (iv) increased employment in agriculture and the rural non-farm economy, and enhanced skills. This suggests that each country should formulate a D4D agenda with the following characteristics:
D4D opportunities in Asia appear to be strongest in the countries or parts of countries which are in the transformational stage. With growing political attention to widening income disparities, there are many opportunities to better use dairying as an instrument for development. Because of demographic pressures and land constraints, the agenda for transforming countries should consider jointly mobilising all pathways out of poverty including dairy farming and employment in non-farm dairy enterprises. Prospects are good in view of expanding markets for high-value food products, offering an opportunity to diversify farming systems and develop a competitive and labor-intensive smallholder dairy sector. However, it needs to be recognised that there are also many circumstances where dairy is not the best option, so that available resources can be concentrated in situations where the prospects for success are best.
Conclusions
The challenge for this workshop is to formulate and implement a D4D strategy which is robust under a range of varying and unpredictable circumstances, adaptable to the special situation in each country, and flexible to allow adaptation to evolving circumstances. This will require a combination of long-term vision and detailed awareness of the realities in each country. We are fortunate indeed that FAO, CFC and APHCA have taken the initiative to assemble such an impressive array of expertise, with a deep understanding of the many lessons learned from previous D4D interventions. Our challenge is to use the lessons learned from the past to draw an implementable roadmap for the future with an unwavering focus on the needs of Asia’s rural poor.
Introduction to the workshop group discussions
Objective: Move from case study descriptions and analysis to strategy design and documentation
The aim of the workshop was to gather as much input as possible from the participants to shape the strategy, drawing on regional cross-sectoral experience, knowledge and expertise. In particular, the group sessions were to focus on the following output:
The introduction to these group sessions noted the challenge of developing a strategy that can be implemented, not an ‘ideal’ strategy but a ‘feasible’ strategy. To achieve this, participants would have to “think globally but act locally”, which means that locally adapted strategies must be nested within a regional strategy. The Facilitators suggested that an effective strategy should:
Within the Development Focus of the workshop, smallholder dairy should be seen as an entry point for a process which can help people escape from poverty.
Prior to the group sessions, the Group was informed that discussions should take into consideration:
Vision, Mission, Objective Working Groups
Participants were randomly divided into six brainstorming groups: 2 groups to work on vision; 2 on mission; and 2 on objectives. Groups worked in parallel and reported back to plenary. Following this discussion, the groups were asked to reconvene and focus on priority interventions to deal with each of the major issues they had identified.
Team 1: Listing and prioritizing the key issues that need to be addressed by a Dairy Development Strategy.
Team 2: Proposing a clear vision/mission statement for the Asia Dairy Development Strategy.
Team 3: Proposing three overarching strategic objectives for the Asia Dairy Development Strategy.
I. Vision
Based on the discussions up to this point in the workshop, the following vision statements were proposed:
A final consensus agreed upon the following:
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Vision Statement: Improving the competitiveness of smallholder dairy producers to provide more and better quality milk to Asian consumers. |
II. Mission Statement
Team II proposed the following mission statements:
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Final Mission Statement: Enabling smallholder dairy producers to derive the full benefits from the Asian dairy value chain through greater productivity, better milk quality and maximum market access. |
III. Strategic Objectives
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By 2018:
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Based on the discussions up to this point in the workshop, the following strategic objectives were accepted:
22 World Bank: “World Development Report 2008: Agriculture For Development” Downloadable from www.worldbank.org
23 These often correspond to marginal, limited and good market access for dairy products.
