Dairy consumption is increasing globally, and this presents an opportunity for farmers in developing countries. Small-scale dairy farmers need to produce high-quality dairy if they are to realize their full potential in this growing, formalized market.

Why? Joining the global market

At present, small-scale farmers in developing countries are not benefiting much from the rise in global dairy consumption. This is because they aren’t able to sell enough of their dairy on the formal market, where the greatest opportunities lie. With investments, small-scale farmers can produce high-quality milk and broaden their sales market. This helps provide a more stable family income, as well as improved food safety, sustainability and animal welfare.

  • Consumption

    Dairy consumption continues to increase, particularly in non-Western countries. It’s not just milk and milk products that are being consumed more: demand for cheese and butter is also increasing. This inevitably means that dairy production needs to increase.

    Increased dairy consumption has led to increased dairy production in these non-Western countries, but they have not been able to adequately take advanatge of this trend. Non-Western countries have plenty of dairy farmers and cows. However, they operate on a small scale and are often part of a household. They operate at a low level of efficiency, which means their environmental impact is relatively high. Increased production and lower livestock mortality rates would greatly reduce that impact. It would also benefit animal welfare and family incomes.

    It’s important that small-scale farmers in non-Western countries be able to produce high-quality milk. Dairy production is a lucrative business. Profit per kilo of milk is relatively high, which provides a high daily income. Providing small-scale farmers with access to the formal market would act as a strong stimulus to the local economy. That’s why it is important from a sustainability and development point of view that dairy farms be able to professionalize.

  • Farming

    Dairy farms in developing countries need to professionalize their work. As well as providing a stable income to farming households, professionalization strengthens the position of women and improves the sustainability of the dairy sector as a whole.

    Dairy production on household farms is a part-time activity and, as part of the household work, is largely the responsibility of women. Milk production is usually low, with a high animal mortality rate. By applying better techniques like fodder production, vaccination programmes, and better input services for feed, semen and medication, family farms would be able to benefit from increased production levels. Working on hygiene and refrigeration simultaneously can improve the quality of dairy output, and help farmers access the formal market and achieve a stable family income.

    Small-scale farmers in developing countries supply their milk to informal markets where prices are sometimes higher than in the formal market. Farmers are usually only able to supply their milk once a day. Sales are also inconsistent over the course of a year as a result of fasting periods, for example, or over-production during periods of fertility. But access to the formal market requires stability as a seller. That’s why small-scale dairy companies need to professionalize and improve their quality.

  • White milk

    Being able to produce safe, clean milk is a fundamental condition of access to formal markets for small-scale farmers. The export of dairy products and ingredients (such as milk powder and condensed milk) from Western countries is growing, but that growth can’t continue indefinitely.

    Western imports will not be able to meet future demand. Given that most dairy farm businesses are based in developing countries, that’s where the future of dairy production must be.

    The formal dairy sector is dominated by large dairy enterprises, which are often a mix of national enterprises and multinationals. The reason is because they prioritize quality and make no concessions when it comes to food safety and dairy quality. But it's difficult for small, local farmers to comply with the high standards set by the formal market for dairy products. Small dairy businesses in developing countries will only be able to access the formal market if they can offer genuinely safe, pure milk at a good price.

    At the same time, consumers also need to be able to trust milk sourced from non-Western countries. The Melanine scandal in China showed that confidence in a domestic market can be shattered and that many still place their trust in imported dairy. That’s why it is important for dairy producers in other countries to strengthen their position by producing and selling good milk, and that they properly communicate its quality.

    There’s another benefit to “clean” milk: it reduces waste, enables farmers to supply their milk twice daily, 365 days a year, and is better for the environment. High-quality milk keeps longer and can be used to manufacture other dairy products, such as butter and cheese.

Challenges Damage to people & the environment

Change from within the dairy market can improve the livelihoods of people on family farms, and have environmental benefits. The growing demand for dairy poses challenges in developing countries. In order to become self-sufficient and limit imports from Western countries, dairy farmers need to be able to comply with the high quality and sustainability standards of the formal market.

  • People

    Food Security & Raw Milk

    Raw milk in developing countries is of a poor quality, which carries food safety risks. The milk may contain significant bacterial growth, usually antibiotic residues, and pesticides and aflatoxins are often also present. Bacteria reduces the shelf-life of the milk. This and the presence of other residues means the milk can seldom be processed into other high-quality dairy products.

    There is a lack of expertise on refrigeration, and also insufficient volumes and capital to gain it. There’s also much room for improvements in hygiene during milking and transportation. Quality controls are inadequate and this has direct consequences on public health. Volatile markets, technological gaps and a shortage of expertise all limit the dairy sector. Family farms will only be able to develop if farmers are willing to professionalize in terms of their output and quality, and produce genuinely clean, safe milk. Proper development includes income, food security and sustainability.

    Improved dairy quality and productivity translate directly into increased family income and improvements in the position of women. Safe, white milk also provides a healthy source of protein for children of farming families.

  • Environment

    Environment & Sustainability

    Dairy production places high demands on land and animals, and has environmental repercussions. Milk processing is water intensive, and inefficient production results in a relatively high level of water use and CO2 emissions per kilo of milk.

    Average production levels are far below the genetic potential of the cows, particularly when local breeds have already been cross-bred with more productive animals. Dairy production is often focused just on household use and sales on the local market, which means many resources and a lot of the milk produced go to waste.

    Using new technologies, such as in the refrigeration of milk, as well as focusing on animal welfare, can lead to a greater volume of high-quality milk being produced. That milk will have a longer shelf-life and be more suitable for processing into other dairy products such as cheese. More high-quality milk means fewer emissions per kilo, which makes dairy production more sustainable.

Track record Increasing production

  • 2019

    In 2019, we expanded our dairy initiatives to new locations and farmers. In Bangladesh, we inaugurated the dairy component of our Sustainable Agriculture, Food Security and Linkages (SaFaL) II programme in Bangladesh, with 80% of participants adopting at least ten good practices and technologies. Through our FOSEK and Oromia projects in Kenya and Ethiopia, we trained 11,000 coffee farmers to diversify into dairy this year. Under the Kenya F4APK project, more than ten million litres of milk were aggregated through cooperatives, and in Tanzania, 140 farmers (36% women) were trained in animal husbandry and business skills as part of the Dairy-2025 project.

  • 2018

    Commissioned by the World Bank, Solidaridad developed a holistic vision to create a competitive and climate-smart dairy sector in East Africa by increasing integration within the value chain. In line with this vision, we worked with more than 23,000 farmers in Bangladesh to offer support in business development. We also worked with private partners to develop a programme for medium-sized dairy farms in Myanmar, as well as launching a dairy innovation programme in Tanzania.

  • 2017

    In Bangladesh, Solidaridad has continued to make progress with 17,000 farmers and their families by building capacity, developing market linkages and engaging new SMEs as service providers. This is the starting point for further development of the sector through businesses such as dairy hubs and commercial dairy farms formed by groups of farmers.

  • 2015
    As part of the SaFaL programme in Bangladesh, we have reached agreements for setting up 15 regional Milk Collection Centres through the BRAC dairy enterprise, including services for input supply such as feed, medicines and semen.

  • 2014
    The delivery of refrigeration facilities in Kenya, enabling dairy farmers to improve sales.

  • 2013
    In Bangladesh, training in farm management provided to 15,000 smallholders has led to increased milk production in cows and lower animal mortality rates. These training sessions will be continued in 2015 and 2016 so that more smallholders can generate increased profits per cow.

Solution We bring people together

The position of family farms in developing countries will only change if the supply chain changes. Development programmes often focus on increasing milk production at the farmer level. What we do, however, is bring supply chain actors and farmers together and encourage them to come up with innovative solutions. We also support farmers as they work to produce more and better milk, from refrigeration to processing, including a focus on improving input services and government interventions.

  • Farmers

    Efficient farm management is the foundation of sustainability within family farms. In Bangladesh, training in farm management provided to 17,000 smallholders has led to greater and safer milk production and lower animal mortality rates. This not only has positive implications for income, gender and food safety, but also has environmental benefits such as less spoilage and reduction of CO2 emissions.

    Improving sustainability also requires us to look beyond cattle breeds and feed. Animal health and vaccinations, the provision of sufficient clean drinking water and housing all need to be considered. That’s why we have worked with Dutch Farm Experience to develop a learning method and tool to provide businesses with comprehensive development guidance and support. This enables both parties to work together on identifying key challenges, what the businesses can solve themselves, and where they still need help from our programme.

    By continuing to professionalize and collaborate, farmers can invest in refrigeration technologies, making their milk cleaner and safer. Producing quality dairy opens access to a broader sales market, so family farms can sell their milk twice a day, 365 days a year, rather than just once a day. This provides a stable and direct source of household income.

    “Meeting increased demand for high-quality dairy products by increasing exports from Western countries is a short-term solution. In the longer term, countries need to increase production and improve the safety and reliability of their milk, leading to higher local incomes and greater food security. This requires professionalization along the entire chain involving farmers, national and international supply chain partners, and governments.”

    Global Programme Manager, Dairy Solidaridad

  • Change the supply chain

    It’s important to work with family farms and local partners to improve sustainability in developing countries. In order to ensure a sustainable future in the dairy industry, we deliberately work with national companies and multinationals and try to build a bridge between small-scale farmers and the large, global organizations like Danone, Unilever and Friesland Campina.

    These supply chain actors control the milk market and set high standards for milk quality. Our goal is to build a long-term relationship between companies in the formal market and the family farms. Competing with international imported milk will enable developing countries to become self-sufficient in this sector. This is good for farmers, but also has positive economic impacts on the country as a whole.

    Our programmes try to improve the quality systems of these small businesses. By investing in refrigeration technologies and input supply, small-scale farmers can comply with the quality standards of the formal market and participate in the production chain. We work not just on the demand side of this formal market, but also focus on the farmers themselves. We do this by working on their management of cattle, hygiene and sustainability. We work as an equal partner, not as an instructor. We also support farmers in cooperating and lobbying for better services and quality systems. In doing so we prefer to engage in a fully comprehensive approach with fewer farmers rather than working less effectively with many farmers.

Impact Expanding across the globe

Following the successful implementation of the SaFaL programme in Bangladesh and smaller programmes in Kenya, Solidaridad is now working on programmes in India, Myanmar, and Ethiopia. There are opportunities to develop programmes in other countries in Asia, Africa and South America with funding from governments, foundations and companies.

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We believe we can improve the position of family farms in developing countries by supporting them and providing tools to enable them to access the formal market. Join us in driving the changes that matter to farmer families and dairy businesses, and to those who consume milk and dairy products.


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  • Contact Information

    Catharinus Wierda

    International Programme Coordinator, Dairy

    't Goylaan 15, 3525 AA Utrecht, The Netherlands