This is the second part of a study on the global dairy sector and
developing countries. The first part provided an overview of the global
dairy sector, its development trends over the past twenty years and the
main international dairy trade flows as background information and
overall context. This part aims to address the question of whether and
to what extent dairy sectors in developing countries have been harmed by
the practice of some OECD countries to dispose of surplus milk powder by
'dumping' it on the world market.
The paper adopts a case-study approach and six countries, Thailand,
Bangladesh, Tanzania, Senegal, Peru and Jamaica were selected for a
detailed analysis of their dairy sector. The individual country studies
review national dairy production, consumption and trade; marketing and
processing; dairy policies and finally provide a qualitative assessment
of the likely impact of milk powder imports on the dairy sector. The
study concludes by summing up the findings on the likely effects of milk
powder imports in each of the six countries.
While subsidised milk powder imports in some cases are likely to have
contributed to difficulties of dairy sector development, in none of them
do they appear to have been the major constraint. As in developing
countries climatic conditions for dairy production are often
unfavourable for high-yielding breeds, production volumes are low and
long-distance distribution costs high while demand for dairy products,
particularly from urban centres substantially exceeds domestic
production, dairy product imports mainly serve to bridge the gap between
domestic demand and production, particularly in the lean season.
The claim of 'dairy dumping' appears to frequently be mis-used an
opportune explanation for slow development and lack in competitiveness
of domestic dairy sectors that frees policy makers from the necessity to
address home made obstacles for dairy development. A forward looking
strategy for national dairy production should focus on improving
competitiveness of production and processing and prevent concentration
of a few large companies that control the whole sector.
A two page executive summary is available in addition to this paper.
PPLPI, FAO, Rome, Italy, vi+82 pp.