Globally, the dairy sector is probably one of the most distorted
agricultural sectors: producer subsidies are in place in many developed
countries, encouraging surplus production, export subsidies are paid by
governments to place the excess production on the world markets, and
tariff and non-tariff barriers are erected both by developed and
developing countries to protect their dairy sector from 'unfair'
competition. These market distortions are having significant and
different impacts on producers and consumers in developing and developed
countries, which are however extremely difficult to quantify.
This paper is the first volume of a study on the impacts of global dairy
trade on developing countries, giving an overview of global dairy
production, consumption, industry structure, trade, applied policies and
Different developments are occurring in the global dairy sector at the
moment: Production in developed countries is falling (together with the
number of dairy cows and farms), while productivity is rising.
Simultaneously milk production in developing countries is growing
strongly and numbers of cows are increasing. This development is
mirrored in consumption. Dairy consumption levels in developed countries
are constant or falling, whereas in many developing countries, foremost
in East and Southeast Asia and driven by population growth and growing
per capita incomes, dairy consumption is rapidly increasing. With
consumer demand in developing countries rising faster than domestic
production, global dairy trade volumes are increasing as well with
import demand of developing countries being the major driver.
In the second volume of the study, the dairy sectors of six developing
countries (Bangladesh, Jamaica, Peru, Senegal, Tanzania and Thailand)
will be analyzed in order to identify the impacts of (subsidized) milk
powder imports on milk producers and consumers.
A four page executive summary is available in addition to this paper.
PPLPI, FAO, Rome, Italy, viii+49 pp.