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Improved market access andImproved market access and
smallholder dairy farmer participationsmallholder dairy farmer participation
for sustainable dairy developmentfor sustainable dairy development(CFC/FIGMDP/16FT)(CFC/FIGMDP/16FT)
Asia-Pacific Smallholder Dairy Strategy Workshop
Chiang Mai, Thailand : 2529 February, 2008
Se lect ed sm a l lho lde r d a ir y in g ex per iences
f r o m Bang ladesh and Mong o l i a
Tset sgee Ser-OdD i rec to r Na t i ona l Da i r y Pr og r am m e
Mongo l ia
Muham m ad Mus ta fa Hussain Gener a l Manager
Gram een Motsho O Pashusam pad Foun dat ion Bangladesh
Br ian Dugd i l l Da i r y Developm ent Consu l tan t
FAO
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Background: whyBangladesh & Mongolia?
Innovative features of
selected smallholderdairying models:
milk production
market access
Comparative lessons
Presentation
outline
Bangladesh
Bangladesh
Brian Dugdill (February 2008)
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Geography overview
2 very different countries?Bangladesh Climate: hot, humid, tropical, high rainfall
Flat, rich alluvial soil, abundant water, 3 rice crops/yr Disaster risk: high -regular flooding & periodic tsunamis Population : 140 million (25% urban)
population density : over 1,000/km2
48% - below MDG income poverty line ($1/day) 30% - under-nourished
Mongolia (land locked) Climate: cold, semi-arid, extreme continental, low rainfall Vast rolling steppe grassland (70%);
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Overview
2 very different countries? Bangladesh:
verdant land of orange sunsets
as signified by its flag
Mongolia:
land of the blue sky
it may be cold for most of theyear but more than 300 sunnydays
Both have dairy sectors dominated
by smallholders
FAO recently involved insmallholder dairying in bothcountries!
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Milk productionBangladesh: sm a ll h o l d er s d o m i n at e (often landless) 15m households produce
more than +95% of milk cows & buffaloes milked (24 million) stall feeding (land scarce) producer orgs: village co-ops & village groups
Mongolia: sm a ll h o l d er s d o m i n at e (herders/peri-urban households) 85,000produce 90% of milk, but more intensive dairy farms growing rapidly
cows, yaks, mares, camels, goats, sheep milked (40 million) extensive grazing (land plentiful) herder-extended family groups
Main constraints to improved productivity & profitability at thesmallholder level are basically the same:
enhancing feeding shortage of improved stock
insufficient knowledge for raising management skills
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Mongolia
Dairying snapshot - market access Milk availability: 134 kg/capita/yr (rural=200kg : urban=50 kg)
Market: 95% informal traditional products very important formal market growing rapidly (imports dominate formal market)
Pre-1990s: State collective farm-collecting-processing system
self-sufficient in milk & dairy products
Post-1990s: transition from state-run to market economy very nearlydestroyed dairy sector State collective dairy farms & milk processing combinats collapsed cheap dairy imports, both finished products & reconstituted sold as local
produce - until very recently swamped urban market tax system favoured imports
Today (2007) - 12 milk processors: 10 buying domestic milk 2 with business models - recombining SMP & veg. oil into UHT milk
Mongolia-China joint ventures (?)
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Mongolia
dairy industry revival The problem
Industry collapsedfollowing transition fromstate-run to marketeconomy in 1990s
Imports soaring in
urban areas - 95%formal market
The solution Support from Japan &
FAO to kick start re-building the dairyindustry
The Mongolia dairy foodchain model
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Dairy sector
revival strategy agreed
based on:
complete sector-wide dairy foodchain approach cow toconsumer
careful selection of partners &
collaborators for cost-sharing themodel dairy demonstration units
consistent with current Food &Agriculture policy & GovernmentNational Plan of Action
taking advantage of the keyopportunities available to theMongolian dairy industry toovercome the present constraints
Mongolia-Japan-FAO/UN Dairy Food Security project(GCSP/MON/001/JPN)
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Implementation (Oct. 2004 - Sep. 2007)
- organised into three thematic programmes
1) Milk Production Enhancement- profitable cows, clean milk
2) Milk Marketing Enhancement(incl. collection & processing)- quality, affordable milk & dairy products
3) Dairy Training Programme- establishing a national Dairy Training Centre- updating skills & knowhow
Focus:on innovation, milk quality & capacity building ina commercial setting by demonstrating
modern technologies new equipment vocational short course & outreach training at
NDTC & in the field
Mongolia-Japan-FAO/UN Dairy Food Security project(GCSP/MON/001/JPN)
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Flexible, integrated dairy chain m o d e l with practical & affordablei n v est m en t pack ages (modules) for each stage of the dairy foodchain: 6 modules 16 in operation (2007)
Herder/dairy farmer Milk producer-herder groups
Dairy Service Centre+ dairy cow breed scheme
consumerQualityControl
Milk CoolingCentres
Milk processing
One-Stop
Dairy Sales Centre
quality
quality
quality
quality
Milk collector
1 2
4
3
45
6
4
Mongolia-Japan-FAO/UN Dairy Food Security project(GCSP/MON/001/JPN)
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Cheese making, collection & marketing model(a) natural fresh Gouda, Cheddar & Yak chesses (b) processed cheese
Rem ote a r eas Cheese making & collection fromherder groups out on the steppe
Mongolia-Japan-FAO/UN Dairy Food Security project(GCSP/MON/001/JPN)
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Mongolia models:
key lessons & innovative features public-private sector partnerships & investments, tax incentives dairy cow genetic and breed improvement scheme, AI using
imported Simmental semen from young tested bulls retail outlets where processors join to sell their products,
including certified raw chilled milk and traditional products atone-stop milk sales centres,
generic milk branding, labelling & advertising
public-private sector partnership school lunch programmebased on local milk, supplied by local dairy enterprises
working with the food standards and inspection authorities toset realistic but safe standards and to train and certify milkinspectors, dairy operators and traders.
permanent & commercial National Dairy Training Centre atthe Food Technology College in Ulaanbaatar, which providespractical, vocational and outreach/field training for each of themodules.
Dairy Steering Group of Mongolian Food Processors Association
to represent & promote the dairy industry
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Generic milk branding, labeling & marketing
Mongolian milk for health & wealth!
Educating consumers about thedifference between:Quality fresh Mongolian milkImported old milkFocusing on next generation
milk consumers - children
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Progress (at Dec. 2007) & outlook to 2010
Formal dairy market (million litres LME)
0
1020
30
40
5060
70
80
90
1990 2003 2004 2005 2006 2007 2008 2009 2010
domestic milk
imported milk
Source: MOFA and FAO project
------ target ----------------------------------- actual -----------------------------
Mongolia-Japan-FAO/UN Dairy Food Security project(GCSP/MON/001/JPN)
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Bangladesh
Dairying snapshot : market access Milk availability: 19 kg/capita/yr
Market: 95% informal traditional products important
formal market growing rapidly (imports = 50% formal market)
1980s/1990s huge imports of cheap milk/dairy
products (from subsidized production in the west) helped develop market
set back development of domestic dairy industry as local milkcould not compete
Today (2007) milk processors: 20: - 18 since mid-1990s
3 with business models based on recombining SMP & veg. oil intoSCM (sweetened condensed milk)
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Bangladesh: UNDP & FAOhave long been development partners in the dairy food chain
Milk VitaBagharbarighat Dairy
Milkshaw distributor coops 1974-1988: setting up the MilkVita dairy co-operative model
(with LGRD & DANIDA) 1999-2005: setting up the
CLDDP integrated fish-crop-livestock dairy model (withGrameen Bank)
2002-2005: setting up thevocational Dairy Training Centre atSavar (with DLS/MOFL)
2005-2006: updating NationalLivestock Policy (with DLS/MOFL)
Lesson: smallholder dairyingneeds long-term commitmentfrom all stakeholders & partners
Find coops pic
Milk producer coops
Milk Vita coop model
GMPF-UNDP-FAO Community Livestock & DairyDevelopment project (BGD/98/009)
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Bangladesh: CLDDP model
the constraints & the solution
Gram een Mo tsho ( Fi sh ) Foun da t ion i n 19 98 Not-for-profit sister organisation of the Grameen Bank
Inland fish farming with poor people since 1980s Works through grass roots Village Group/Village Centre system Profits from fish sales shared 50 : 50
Th e p ro b le m s How to increase Village Group Member (VGM) earnings from fish? (USD 70 p.a.)
How to improve productivity of fish ponds? How to improve nutrition & involve more women?
The so lu t i on? Add l i vest ock t o t he f i sh fa rm ing sys tem Livestock to provide products for home consumption & sale
Livestock to provide dung to fertilise fish ponds to improve productivity Livestock to shift the focus on women UNDP/FAO project support introduction: Community Livestock & Dairy
Development Project (CLDDP) (1999-2006)
I n 200 3 GMF becam e GMPF Gram een Mo t sho O Pashusam pad Founda t i on
t he Peop les Fi sh and Lives tock Foun dat ion GMPF-UNDP-FAO Community Livestock & Dairy
18Development project (BGD/98/009)
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Grameen Bank CLDDP ModelCommunity Livestock & Dairy Development model
VGM-SmallholderLivestock-based
Enterprises
Village Groups
CommunityLivestock
Services
CommunityCredit
ServicesVillageCentres
CommunityFeed
Mills
CommunityDairy
Enterprises
Rural& Urban
ConsumersGMPF-UNDP-FAO Community Livestock & Dairy
Development project (BGD/98/009)
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GMPF-UNDP-FAO Community Livestock & DairyDevelopment project (BGD/98/009)
Grameen Bank CLDDP Livestock Loan packages
VGM-smallholdersselect loans from9 package menu
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homesteads
milkcollection
point
Community dairyCommunity feed mill
Pasteurised Milk
homesteads
milkcollection
point
milkcollection
pointhomesteads
Grameen BankCommunity Livestock & Dairy Development Project
(CLDDP) model
-consumers-markets
litre litre litre
communitylivestock centre(services/inputs)
GMPF-UNDP-FAO Community Livestock & Dairy development project(BGD/98/009)
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Grameen Bank CLDDP model
selected outcomes & benefits (1)VGM-smallholder numbers:
Increased from 3,500 (1998) to 9,000 (2007)
85% new VGMs are women
taking outreach (field) training programme to villages makes thetraining more accessible for women
Change in VGM status (1998/2005)
net earnings up 650% : $388 (2005) v $70 (1998) - excluding sale ofanimals
71% VGMs now select dairy cows/heifers, because returns highest -pay off loans quickest
value of household assets up 145%
Dung is used three times:
to produce energy (bio-gas) for cooking & lighting
to fertilise fish ponds
to fertilise crops
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Grameen Bank CLDDP model
selected outcomes & benefits (2)
Milk consumption by VGM households
1998 nil 2004 >0.5 litre (78%);
1.0 litre (22%)
VGM Households reporting having sufficient food
1998 58% 2004 98%
Milk quality: processing dairies pay premium for CLDDP milk,
because compositional and keeping quality reliable
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Crop residuesWeeds
FeedMills
P ou l t r y - - - - - - - - - Ducks
Bi o- d i ge st e r
Livestock
Feed
Cat t le - - - - - - - Goats
Meat Mi lk Cook ingFuel
L igh t i ng
Pond
M anur e
Draught
Duckweed /Aquatic Weeds
Fish
Fertilizer
Sludge
PestControl
Poultry/Duck feed
Eg gs Meat
Fodder
PaddyHo r ticu l t u r e
Grameen Poor Peoples Fish-Crop-Livestock Farming System
Outputs
Loanpackages
Simple visionWell integrated
Complex execution
GMPF-UNDP-FAO Community Livestock & DairyDevelopment project (BGD/98/009)
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GMPF-UNDP-FAO Community Livestock & Dairy Development project (BGD/98/009).
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Both countries have
school milk programmesBangladesh Pilot programme Based on imported milk
powder, centrally recombined& distributed (packed in UHTcontainers)
potential to distort localmarkets?
Mongolia national programme -300,000
children (piloted 2006/started2007)
public-private sector
partnerships local milk provided by local
herder-smallholders Locally processed & delivered
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What next? Scaling up: both countries have large locally funded
programmes to scale up the models Bangladesh: largely through NGOs & private sector, incl.
Grameen-Danone social dairy ventures
Mongolia: under National Dairy Programme (2007-2015)
Improved dairy stock: both countries receiving
support from small FAO TCP projects: Bangladesh: will start 2008
Mongolia: started Jan. 2008
Dairy cow feeding & capacity building: Largely through outreach training under both National
Dairy Training Centre programmes
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Dairy development coordination
(strategies, policies, programmes) Bangladesh:
Government, NGOs & private sector pursue separate
agendas Government supervises dairy cooperatives (Milk Vita) NGOs and private sector left largely to own devices Bangladesh does not have a dairy policy, plan or
programme
Mongolia: Government-private sector partnership Government policy facilitates: legislation, standards,
inspection, tax incentives
Private sector lobbies & implements through Dairy SteeringGroup of Mongolia Food Producers Association Mongolia has 10-yr dairy development programme (2007-
2016)
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Comparative lessonsIf smallholder dairying works in such harsh & different environments,
it should work in most between situations where marketsdemand quality products & smallholders produce milkcompetitively & access markets!
Success came from: building on existing structures & involving private & NGO sectors adapting and tailoring modern dairy technologies and systems to
the local situation adopting a complete cow to consumer st r at eg y : focusing on
quality & profitability for each link in the chain having public-private/NGO sector partnerships to fine tune the
model & spread the risks associated with innovation & start-up using the success to influence policy & having a p lan for
sustainable scaling up
In these processes, committed people (stakeholders) are moreimportant than geography, climate or polictics
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More information?Bangladesh: Muham m ad Mus ta fa Hussa in FAO Terminal Report (published 2007): www.fao.org
Also lists all the key documents, guidelines, manuals etc,including the CLDDP m o d e l
Lessons Learned Study: Bangladesh - smallholder milkproducers, nutrition, incomes, jobs (2007)
Mongolia: Tset sgee Ser - Od FAO Terminal report (published 2007): www.fao.org
Also lists key documents, guidelines, manuals etc, includingthe Mongo l i a da i r y cha in m ode l
Lessons Learned Study: Mongolia - small milk producers, thekey to dairy industry revival
www.mongolia-dairy.mn
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Asian milk for health and wealth!
healthy people
wealthy smallholders
Bangladesh
Mongolia
Dhonabhad Bayaar Laa
Thank you!
Brian Dugdill (February 2008)