The Importance of Dairy in the World How to assess the economic benefits of dairying

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1 The Importance of Dairy in the World How to assess the economic benefits of dairying Conference on Benefits of Dairy for Emerging Economies Véronique PILET CNIEL (Fr)

2 The Importance of Dairy in the World Assessment of the economic benefits of dairying in terms of: Production data Trade data Consumption data Employment data Two case studies Kenya India The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 2

3 PRODUCTION The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 3

4 Analysis of production data from FAO World situation in 2010 (most recent year available) Gross production in billion USD Total Agriculture Milk 292 Share of milk in total agriculture 8.9% The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 4

5 Analysis of production data from FAO Development since Index basis 100 in 2000 Agriculture Milk Milk = 8.5 % to 10.5 % of agriculture The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 5

6 Share of milk in total agricultural production - situation in 2010 according to countries Analysis of production data from FAO no data < 5% from 5 to 10% from 10 to 15% > 15% Share > 20% The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. New Zealand Finland Luxembourg Estonia Switzerland Latvia % of GDP* * NZIER

7 TRADE The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 7

8 Analysis of trade data from FAO World trade in 2010 Estimate based on exports in billion USD Agricultural products Milk products 64 (5.9%) (Aggregate containing milk, cream, butter, cheese, whey, buttermilk, milk powder, yoghurt, casein but excluding lactose and infant formula) Milk products + lactose & infant formula 69 (6.4%) The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 8

9 Analysis of trade data from FAO Development since Index basis 100 in 2000 Agricultural products Milk products + lactose + infant formula Milk products Milk products = 6% to 7% of agricultural products The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 9

10 Share of dairy products in total agricultural exports (% based on value) FAO 2010 > 0 to 5% 10 to 20% 5 to 10% > 20% 0 or no data The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 10

11 Analysis of trade data from FAO Some countries with an important share of dairy products in their exports of agricultural products in 2010 Share of dairy products in exports of agric. products (%) > 20 Dairy exports (billion USD) Austria (1.3 / 11%) Denmark (2.5 /15%) France (7.4 / 12%) The Netherlands (7.8 / 10%) Germany (9.1 / 14%) Belarus (1.5 / 49%) Ireland (2.9 / 28%) New Zealand (7.9 / 48%) FAO 2010 The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 11

12 CONSUMPTION The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 12

13 Analysis of consumption data Apparent consumption levels across the world Canada 246 Russia 238 Mexico 113 United States 274 EU 287 Algeria 125 Iran 99 India 98 China 33 Japan 69 Rep. of Korea 55 Philippines 11 World average 104 kg / capita CNIEL / IDF, FAO Food Outlook, PRB Brazil 167 Argentina 242 Sth Africa 63 Less than 50 kg 100 to 200 kg Indonesia 13 Australia to 100 kg Over 200 kg The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 13

14 GNI per capita (x 1000) Analysis of human consumption data 100 Human dairy consumption and income/inhabitant 90 Rep. of Korea Japan Consumption (kg/per capita) CNIEL / FAO, World Bank Lithuania Kazakhstan Albania The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 14

15 EMPLOYMENT The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 15

16 Analysis of employment in the dairy sector Current estimates of the number of people working on dairy farms Wide variations among the 27 country sample Labour force in dairy / agriculture = 3% on average CNIEL / IDF, Worldbank, national sources The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 16

17 Analysis of employment in the dairy sector Current estimates of the number of people working in the dairy processing industry Wide variations among the 28 country sample Up to (Russia), (China), (Egypt) workers in dairy processing = 8% of the industrial labour force CNIEL / IDF, Worldbank, national sources The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 17

18 Analysis of employment in the dairy sector Notion of multiplier: Another number of clear interest is the employment impact of an industry. The employment multipliers are the number of jobs created by increasing annual industry sales by one million dollars. (US Dairy markets and Outlook, May 2004) e.g. in the USA Employment multiplier Number of jobs Dairy farming Dairy farming + processing industry USDA/NASS; Bureau of Economic Analysis; National Milk Producers Federation The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 18

19 TWO ILLUSTRATIONS The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 19

20 Illustration: the case of Kenya Dairy Kenya at a glance: J.Atherton 42 million people, rural population 76% 5 million milking cows (2 million goats; 1.5 million sheep) Annual milk production is about 4 billion litres of which 45%-65% marketed, of which 30%- 50% formally 2000 medium/large farmers Around smallholders, with between one and three cows, produce 80% of Kenya's milk waged jobs at farm level Ministry of Livestock and Fisheries Development, the Kenya Agricultural Research Institute (KARI) and the International Livestock Research Institute (ILRI); Tegemeo Institute of Agricultural Policy and Development; World Bank 2011; FAO The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 20

21 Illustration: the case of Kenya Dairy Kenya at a glance: Processing and marketing of milk generates a further jobs (70% in the informal sector) Women involved in dairying, men in marketing and processing High liquid milk consumption 27 processors - the New KCC, Nestlé, Githunguri Dairies, Brookside ILRI/Brad Collis Value added of agriculture = 23% of GDP; Dairy = 4 to 8% of Kenya's GDP Trade: self-sufficient Ministry of Livestock and Fisheries Development, the Kenya Agricultural Research Institute (KARI) and the International Livestock Research Institute (ILRI); Tegemeo Institute of Agricultural Policy and Development; World Bank 2011; FAO The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 21

22 Illustration: the case of India ILRI/ FAO Giampiero Diana Dairy India at a glance: 1.2 billion people, rural population 70% About 78 million dairy farms, mostly small/marginal/landless farmers (1-2 cows) 43 million milking cows; 37 million buffaloes (30 million goats) Annual cow milk production is about 59 billion litres = 9% of world milk production Annual buffalo milk production is about 67 billion litres = 67% of world milk production of which 20% is collected and processed 45%-65% marketed, of which 30%-50% formally IDF World Dairy Situation 2012; National Dairy Board India; Delhi Institute of Economic Growth; FAO; Comtrade The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 22

23 Illustration: the case of India Dairy India at a glance: village coops comprise 14.5 million members and sell 22 million litres liquid milk a day 9 private dairies process 400 million litres a year (Nestlé, Hatsun Agro; VRS Foods; Tirumala; Heritage Foods; Sterling Agro; Bhole Baba Dairy; Dynamix; Parag Milk Foods) 2 main coops process 10 billion litres (Gujarat Co-op Milk Marketing Federation; Karnataka Milk Federation) Agriculture = 15% total GDP; Livestock = 24% of agricultural GDP = 4% of national GDP; milk & milk products = 16% - 17% Agri output value Trade: self-sufficient IDF World Dairy Situation 2012; National Dairy Board India; Delhi Institute of Economic Growth; FAO; Comtrade The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 23 CNIEL

24 CONCLUSION Importance of dairying On the global scale Especially for a number of emerging countries National economies Social development Emerging countries have played, and are still playing, a major role in the growth of dairy output as well as that of demand The Importance of Dairy in the World, Conference 6, Véronique Pilet, Cniel (Fr), 7 Nov. 24

25 Thank you for your attention

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