STATUS AND PROSPECTS FOR SMALLHOLDER MILK PRODUCTION A GLOBAL PERSPECTIVE

In 2005, some 1.4 billion people lived in absolute poverty and that nearly 1 billion were affected by chronic mal- or undernutrition. An estimated 75 percent of the world's poor live in rural areas, and at least 600 million of these keep livestock that enable them to produce food, generate cash income, manage risks and build up assets. With the valuable contribution that livestock makes to sustaining livelihoods, especially in rural areas, the development of small-scale livestock enterprises could be a key element of efforts to eradicate extreme poverty and hunger. Milk production is an important livestock-sector activity and it is estimated that nearly 150 million farm households throughout the world are engaged in milk production. Small-scale milk production not only improves food security of milk producing households but also creates significant amounts of employment in the entire dairy chain, which comprises many small-scale rural processors and intermediaries. On the other hand, demand for milk and milk products is steadily growing, particularly in developing countries. If supply is to keep pace with the growth in demand, milk production will need to grow by close to 2 percent per year. The aim of this book is to provide a holistic picture on the trends and drivers in the dairy sector as well as the implications these may have for the future of dairy farming, in particular among the smaller-scale, rural producers. Across the countries analysed, 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. Dairy sector development can therefore be a potent tool for poverty reduction. However, gainful participation of smallholder milk producers in the dairy market not only depends on their own competitiveness, but also on the efficiency of the dairy chains of which they are part. Therefore, smallholder dairy development strategies must not exclusively focus on dairy producers but must increase competitiveness in each and every segment of the dairy chain.