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Evaluation of Sustainability of Smallholder Dairy Production Systems in the Highlands of Mexico During the Rainy Season
Abstract and Figures
A sustainability evaluation was undertaken with 22 smallholder dairy farms in the highlands of Mexico; following the IDEA method in the agroecological, socioterritorial, and economic scales (all scales are out of 100). Sustainability was highest for the agroecological scale (59/100), intermediate for the socioterritorial scale (53/100), and lowest on the economic scale (43/100). The sustainability of a farm is the lowest score of the three scales. In most farms, the lowest was the economic scale. A cluster analysis led to the identification of five distinct groups: Cluster 1 defined two farms not related to others, cluster 2 farms (4) were those with high agroecological scores, cluster 3 farms (8) were most representative of the area, cluster 4 included two farms with low socioterritorial and economic sustainability scores, and cluster 5 was made up of the remaining six farms with the highest economic sustainability score, but limited by the agroecological and socioterritorial scales. In all farms, there is a high reliance on bought-in inputs. Therefore, given the limited resources of these systems, the better option is to limit the number of cows to those that can be fed mostly with the production of the farm, which increases the economic sustainability. The IDEA method is a useful tool for sustainability assessment of small-scale dairy systems.
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... In Mexico, over 88% of all farms with cattle are categorised as small-scale dairy systems (SSDS) (INEGI 2018). Small-scale dairy systems typically have a low hectarage and herds between three and 35 cows and are considered 'small' (Fadul-Pacheco et al. 2013). The sale of milk is the main source of income, and these farms base their operation on family labour (Fadul-Pacheco et al. 2013), thereby aiding families in rural areas in overcoming poverty (Espinoza-Ortega et al. 2007). ...
... Small-scale dairy systems typically have a low hectarage and herds between three and 35 cows and are considered 'small' (Fadul-Pacheco et al. 2013). The sale of milk is the main source of income, and these farms base their operation on family labour (Fadul-Pacheco et al. 2013), thereby aiding families in rural areas in overcoming poverty (Espinoza-Ortega et al. 2007). ...
... Small-scale dairy systems represent 80% of all dairy farms around the world (17 million farms), and farm 35% of the arable land in Latin America producing 67% of milk production in the region (FIDA 2019). The economic scale of SSDS is the limiting factor in the sustainability and longevity of these farms, hindered by high feeding costs that reduce their profitability (Fadul-Pacheco et al. 2013;Prospero-Bernal et al. 2017). Prospero-Bernal et al. (2017) demonstrated that by implementing grazing of cultivated pastures in SSDS in the highlands of central Mexico, feeding costs were reduced, profitability increased, and sustainability of the small-scale farm improved. ...
An on-farm participatory study was undertaken to assess changes over seasons on the availability, botanical and morphological composition, and nutritive value of herbage from two pastures in small-scale dairy systems in the highlands of central Mexico. One pasture (TF-33) was originally sown with tall fescue, while the second pasture (KY) was naturally invaded by Kikuyu grass; both associated with white clover and over-sown in winter with annual ryegrass. Sampling was every 28 days for a year. Variables were sward height, net herbage accumulation, soil cover, tiller density, chemical composition, and in vitro digestibility. A split-plot design was used. Sward height was greater for KY. There were no differences (p > 0.05) for herbage accumulation. TF-33 was 53% live tissue, 30% dead tissue, and 17% other plant material, whilst KY was 50% live tissue, 30% dead tissue, and 18% other plant material. TF-33 showed a higher leaf to stem proportion, while stem was higher in KY. Kikuyu grass and annual ryegrass performed better when associated with TF-33 than in KY pasture. Seasonal changes significantly affected sward height, herbage mass and net herbage accumulation, whereby TF-33 performed better than KY in winter. The multispecies association of diverse grasses and legumes may be complementary at different times of the year due to plasticity among species, and is a feasible option for small-scale dairy systems.
... Small-scale dairy systems (SSDS) contribute more than 35% of production in Mexico (Hemme et al., 2009); they have persisted over time and generate a constant income. They are characterised by herds of 3 to 35 cows plus replacements, by farming activities carried out in small farms (Fadul-Pacheco et al., 2013), and by family labour-based production. They have proven to be an option to overcome rural poverty . ...
... The economic scale of sustainability is the most vulnerable aspect of these systems, given the high production costs. Feed is the major component of these costs (Fadul-Pacheco et al., 2013;Prospero-Bernal et al., 2017), as a result of the use of large amounts of commercial concentrates, straws, and stubble (Martínez-García et al., 2015), which represent up to 70% of a farm's expenses . ...
O Background: The implementation of polyphytic pastures composed of grasses and legumes is an important component of agricultural systems in temperate zones, since grazing pastures which can reduce feed costs— are a viable option for small-scale dairy systems (SSDS). Objective: To evaluate the continuous grazing of dairy cows in Festulolium pastures associated with annual and perennial ryegrass and with clover in two farmrs. Methodology: Two experiments were carried out. The first experiment was established in the municipality of Almoloya of Juárez using eight cows that were divided into two groups of four; the cows grazed on two pastures with Festulolium associated with annual ryegrass and they were fed with 3.6 kg DM/cow/day of commercial concentrate, for 16 weeks. The second experiment was carried out in the Northwest of State of Mexico; six multiparous cows grazed on two pastures, under a cross over design arrangement; one pasture features Festulolium cv Spring Green and the other, annual ryegrass. Milk and body condition ere measured every 3 and 12 d, respectively. Variables from both experiments were analyzed using a split-plot experimental design. Results: Neither experiment recorded significant differences for the net accumulation of forage, the height of the pastures, and their chemical composition (P>0.05). No significant differences between treatments (P>0.05) were recorded regarding the yields and chemical composition of the milk. Study Limitations/Implications: The study of mixed pastures can be an alternative for feeding grazing cows, helping to reduce costs in SSDS. Findings/Conclusions: Festulolium/annual ryegrass pastures with white clover are a viable forage alternative for small-scale dairy systems.
... Por lo tanto, en cuanto a la tecnología, se requieren mejoras en los aspectos de alimentación del ganado y opciones de manejo ambiental con diferentes combinaciones adecuadas de cultivos forrajeros para estos sistemas, que les permita enfrentar y adaptar sus estrategias de alimentación a posibles escenarios por el cambio climático como escasez de lluvias y regímenes pluviales erráticos (Thornton et al., 2009). La alimentación de los hatos representa el mayor rubro de los costos de producción (Espinoza-Ortega et al., 2007;Fadul-Pacheco et al., 2013). Resultados de estudios sobre la sustentabilidad de SPLPE, confirman que la escala económica es la principal área de debilidad particularmente debido a los altos costos de alimentación del ganado. ...
p>Small-grain cereals are promoted as forage alternatives that may substitute for other traditional crops when short cycle forages are required for cattle feeding. The objective of the work was to assess in vitro the nutritive quality, ruminal fermentation kinetics and digestibility by the gas production technique of forage from common oat ( Avena sativa cv. Canadiense) = AC, black oat ( Avena strigosa cv. Saia) = AN, Triticale ( ×Triticosecale Wittm. cv. Criollo) = T, and rye ( Secale cereale of national production) = C. The forage crops were sown in 250 m<sup>2 </sup>plots, harvested and sampled 72 days after sowing in a completely randomised design with five replicates. Both oat species (AC and AN) had significantly higher crude protein and neutral detergent fibre contents (P<0.05) compared to T and C. In vitro gas production showed a higher fermentation rate for black oat and common oat, with no differences for in vitro digestibility (P>0.05) for the evaluated forages. There were also no differences in the estimated ME content (P>0.05). Results indicate that black and common oats are forages with a better nutritive quality when harvested at a similar time compared to triticale and rye forage.</p
... SSDS in Mexico are heterogeneous in both technological and agro-ecological terms, so that there is an ample variation on the productivity of each farm (Camacho-Vera et al., 2017). In the central highlands of Mexico, small-scale dairy farms with access to some irrigation base the feeding strategies of their herds on small areas sown to temperate ryegrass/white clover cut-and-carry cultivated pastures (Fadul-Pacheco et al., 2013), similar to SSDS in southeast Asia (Moran, 2005). This herbage is a high quality component of diets (Martínez-García et al., 2015). ...
p>Black oat ( Avena strigosa cv. Saia) silage (BOS) as an alternative forage for the dry season in small-scale dairy systems was evaluated against maize silage (MSL) at 6.0 kg DM/cow/day. Treatments were evaluated through on farm participatory livestock research: T1=100 BOS, T2=66:34 BOS:MSL, T3=34:66 BOS:MSL, and T4=100 MSL fed to milking dairy cows that also received 4.5 kg DM/cow/day of a commercial compound dairy concentrate and 2.2 kg DM/cow/day of cut-and-carry pasture. Eight Holstein cows were allotted to a replicated 4X4 Latin Square design, with 14 day experimental periods. Daily milk yields and milk composition were measured during the last four days, and live weight and body condition score recorded on the last day of each period. Feeding costs were determined by partial budget analysis. There were no differences in milk yield (15.9±0.26 kg/cow/day), or milk composition with mean values for milkfat of 38.8±0.86 g/kg, milk protein 32.2±0.38 g/kg, and lactose 46.3±0.22 g/kg. There were also no differences in milk urea nitrogen (MUN) with a mean of 11.8±0.83 mg/dl, live weight 385.6±1.67 kg, or body condition score with a mean of 2.6±0.01. Feeding costs per kg milk were 33% higher in T1 and T2 than T4, with intermediate feeding costs in T3 (T1=0.88, T2= 0.85, T3= 0.74, T4= 0.66 R$/kg). Profit margins and income/feeding costs were all positive. Black oat silage may be an alternative forage in small-scale dairy systems in the dry season when maize silage cannot be cultivated or fails due to climate concerns.</p
... Durante los periodos de escasez de forraje, los productores de los SPLPE de las tierras altas de México se ven en la necesidad de complementar la dieta de sus animales con pajas, subproductos de destilería, altas cantidades de concentrados y forrajes externos a sus unidades de producción (Alfonso-Ávila et al., 2012;Martínez-García et al.,2015). Esta práctica incrementa los costos por concepto de alimentación, lo que afecta la sostenibilidad de estos sistemas en su escala económica (Fadul-Pacheco et al., 2013;Prospero-Bernal et al.,2017); por lo que incrementar la eficiencia productiva con estrategias de alimentación basadas en el uso de forrajes autoproducidos en las unidades de producción es clave para mejorar los índices económicos y con ello la sostenibilidad de los SPLPE (Martínez-García et al., 2015;Prospero-Bernal et al.,2017). En este sentido, prácticas como el uso de ensilados que aseguran una oferta constante de forraje de calidad a lo largo del año, especialmente en épocas críticas, permitirán una intensificación productiva al potencializar la respuesta animal (Mancipe- Muñoz et al., 2021;Plitz et al., 2021). ...
p> Background: In small-scale dairy systems (SPLPE), multi-species pastures and small grain cereal silages have proven to be an option in the face of potential climate change effects and provide quality forage at low costs in periods of forage shortages. Objective: To evaluate the inclusion of a binary silage of barley and rye, compared to a ternary silage of barley, rye and triticale, in the feeding of dairy cows in small-scale dairy systems, in terms of productive and economic performance. Methodology : In the central Highlands of Mexico and with the participation of a small-scale dairy farmer, the inclusion of these silages in the feed of 6 dairy cows was evaluated under a cross-over design. The treatments included 40% silage (T1, binary; T2, ternary), 36% of conventional feeds (cut pasture, maize straw and alfalfa hay) offered by the participating farmer, and 24% of commercial compound concentrate. The variables evaluated were diet composition, feed intake, yield and milk composition, and an economic analysis made considering feed costs. Results : The neutral detergent fiber content was 4.8% lower in T2 ( p <0.05), a treatment that also presented a 3% higher digestibility and a higher metabolizable energy and crude protein content ( p <0.05). This was due to the incorporation of the ternary silage, a higher quality silage compared to the binary silage. Energy corrected milk production was higher in T2 ( p =0.05), in response to the higher intake and higher digestibility of this treatment. Feeding costs were similar for the inclusion of the two silages and the implementation of the ternary treatment represented an increase of 0.8% in margins over feed costs with compared to the use of the binary silage. Implications. The use of small grain cereal mixtures silages are feasible in small-scale dairy systems to ensure a constant supply of medium quality forage, which together with moderate supplementation can generate high yields and economic income. Conclusions : The inclusion of ternary silage of small grain cereals of barley, rye and triticale, and moderate supplementation with commercial concentrate (24%) and other conventional feeds (36%), is a viable alternative as a feeding strategy in small-scale dairy systems during the dry season maintaining high milk yields and a high profit margin for these systems.</p
... Por lo anterior, los productores hacen uso de suplementos concentrados, los cuales se pueden adquirir como alimentos balanceados comerciales, o mezclas de concentrados energéticos y proteicos que pueden ser elaborados en las propias unidades de producción (Alfonso-Ávila et al., 2012;Martínez-García et al., 2015). La dependencia de alimentos balanceados comerciales de alto costo representa el principal componente de los costos de alimentación en los sistemas de producción de leche en pequeña escala, que limitan la rentabilidad y viabilidad de forma que la escala económica es el principal limitante de la sostenibilidad de estas unidades de producción (Fadul-Pacheco et al., 2013;Prospero-Bernal et al., 2017). Lo anterior hace necesario evaluar suplementos de menor costo a partir de ingredientes de fácil adquisición por los productores para la elaboración de suplementos concentrados en sus propias unidades de producción. ...
p> Background. Native grasslands are a resource utilized for livestock feeding due to their low cost and mainly during the rainy season. However, native grasslands do not meet the nutritional requirements of dairy cows. Consequently, commercial supplementation with a high cost is used. Objective. The objective of this study was to evaluate the effect of a supplement mixture of canola and ground corn ears compared to a commercial concentrate during the rainy season. Methodology. Ten cows on continuous grazing for 9 h/d were used following the management of the participating farm in a double cross-over experimental design for animal variables, and a split plot design for the grassland evaluation. Results. There were no significant differences (P>0.05) for animal variables, with mean milk yields of 13.5 kg/cow/day, 35.7 g/kg for milk fat, and 32.0 g/kg for protein content. There were also no differences (P>0.05) for grassland height and herbage mass, nor for chemical composition, with crude protein content of 100.4 g/kg DM, and 526 g/kg DM of in vitro digestibility. Chemical composition of concentrates was similar, but the experimental concentrate had lower cost. Implications. Given the scenario of rising prices of concentrates, an alternative to the producer is preparing its own concentrate, with corn harvested in the production units and some ingredient that is high in crude protein. Conclusions. It is concluded that the experimental concentrate made on farm resulted in the same performance as a commercial concentrate, which may reduce feeding costs.</p
... Los SPLPE se definen por hatos de 3 a 35 vacas lecheras más sus reemplazos, en unidades de producción con dotaciones pequeñas de tierra agrícola, fundamentados en la fuerza de trabajo familiar, con una gran dependencia de insumos externos, que limitan la escala económica de su sostenibilidad (Fadul-Pacheco et al., 2013;Prospero-Bernal et al., 2017). ...
p> Background. Grazing pastures in small-scale dairy systems reduces feeding costs in these farms in the highlands of central Mexico. Tall fescue ( Lolium arundinaceum ) is a temperate climate grass resistant to hydric deficit, extreme temperatures, and high stocking rates, which make it attractive for these systems. However, many varieties are susceptible to endophyte infection that may cause toxicosis in cattle, which has not been studied in Mexico. Objective . To evaluate grazing of tall fescue pastures of K31 variety susceptible to endophytes, compared to perennial ryegrass ( Lolium perenne ) cv. Bargala pastures, both associated with white clover ( Trifolium repens cv. Ladino). Methodology. An on-farm experiment was undertaken with a participant farmer with six Holstein cows with similar number of calvings, stage of lactation, and milk yields (kg/day). Treatments were BGL: grazing for 8 h/day on a perennial ryegrass cv. Bargala pasture and K31: grazing for 8 h/day of a tall fescue cv. K31 pasture. Cows were also supplemented with 4.6 kg dry matter of a commercial concentrate (18% crude protein) and 5 kg fresh basis of chopped green maize forage. A double cross-over design was applied, with three 14 day each experimental periods. Results. There were no significant differences (P>0.05) between treatments in chemical composition of pastures or supplementary feeds, nor between animal production variables. Implications. The comparison of tall fescue vs ryegrass pastures as alternative temperate pasture to reduce production costs in small-scale milk production systems. Conclusions. It is concluded that both grasses have similar performance in these systems.</p
... Feeding costs in small-scale dairy systems account for 70% of the total production costs because these systems depend heavily on external inputs (Martínez-García et al., 2015), limiting their sustainability, so that reducing feeding costs through quality forage based diets was identified as a priority identifying the production and conservation of forages as silages as opportunity areas to improve their productivity and profitability (Fadul-Pacheco et al., 2013). ...
Small-scale dairy systems require feeding strategies to improve their productivity and sustainability. These systems in central Mexico mostly sell their milk to local artisan cheese makers. Cow diets influence milk and dairy products composition; therefore, the objective was to evaluate the effect on physicochemical characteristics, sensory appraisal, and economic performance of cheese made with milk from cows fed different levels of sunflower silage (SFSL). Treatments were the inclusion of SFSL in the forage DM component of diets (T0 = 0% SFSL; T20 = 20%; T40 = 40%; and, T60 = 60%). Physicochemical composition was analysed by analysis of variance in a completely randomised design and the sensory assessment of the cheese was with a hedonistic five-point scale and the results were analysed by means of descriptive statistics and a radar graph. Partial budgets were used for economic analyses. There were significant differences (P < 0.05) for all physicochemical variables (moisture content, cheese yield, protein, fat content, and pH) of the cheese, with higher values for yield, protein, and fat content in the treatments that included SFSL. Sensory assessment values were in the average perception range of judges. Treatments that included SFSL had lower production costs, higher margins over costs, and higher returns/costs ratios. The inclusion of sunflower silage at 40 and 60% of the forage component of diets for dairy cows in small-scale dairy systems had positive effects. Yields of cheese as well as protein and fat content were higher. There were positive sensory attributes that meant acceptance by consumers, lower production costs, and higher incomes from cheese making.
... SMPSs have a potential for development towards sustainable models based on the improvement of their production processes through the management of their feeding strategies. Such as the implementation of grazing, intensive and continuously, in grasslands which are the basis of livestock feeding (Fadul-Pacheco et al., 2013;Camacho-Vera et al., 2017;Plata-Reyes et al., 2018). ...
Objective. To evaluate the botanical composition of grasslands of kikuyu (Cenchrus clandestinus) compared to tall fescue (Lolium arundinaceum cv. Cajun II), each one in association with white clover (Trifolium repens cv. Ladino), in two independent experiments conducted during two seasons, autumn 2018 and winter 2019. Methodology. Two independent experiments under small-scale milk production system (SMPS) were established in the municipality of Aculco, State of Mexico, during autumn 2018 and winter 2019. The botanical composition of grasslands under intensive continuous grazing by breeding cows was evaluated. One grassland planted with tall fescue cv. Cajun II and the other invaded by kikuyu; each grassland was associated with white clover cv. Ladino. The botanical composition of both experiments was analyzed using a complete randomized experimental design. Results. The kikuyu grassland recorded significant differences (p<0.05) with a higher proportion of forage during the winter 2018. Whereas the tall fescue cv. Cajun II grassland recorded a proportion of forage (p<0.05) higher than its proportion of dead tissue during autumn 2019. Study Implications: The study of the botanical composition of mixed grasslands destined for livestock grazing allows to identify, propose and define strategies for forage production facing agroclimatic and management conditions in order to generate a better and higher forage yield. Conclusions: The proportion of kikuyu was higher than that of tall fescue cv. Cajun II during the two seasons and years evaluated. This highlights the adaptability of kikuyu grass under agroecological conditions such as the absence of rains and high temperatures, coupled with the high stocking densities of the milk production systems in the study region.
La méthode idea est une méthode globale d'évaluation de la durabilité des systèmes agricoles. Largement testée et éprouvée sur le terrain, elle constitue un outil de formation et d'autoévaluation qui montre les faiblesses techniques et les voies de progression possibles. Elle se compose de trois séries d'indicateurs simples et facilement compréhensibles qui caractérisent les systèmes agricoles dans leurs dimensions agroécologiques mais aussi sociales et économiques. Cette édition actualisée et enrichie des nombreux retours de terrain, permet la compréhension et l'analyse de la durabilité des systèmes agricoles dans la diversité de leurs milieux et de leurs combinaisons techniques.
The sustainability of 30 dairy farms was evaluated using IDEA method "Indicators of durability of farms". Based on statistical methods (PCA, ACH), the three scales of sustainability (agro-ecologic, socio-territorial, and economic) have been characterized for the surveyed farms and has allowed to build groups. "Production system" typology is relevant for describing farms by agro-ecological and economical scales. The socio-territorial scale gives the limiting sustainability value for most farms. Inside this scale, the main way of progress relies on employment and services improvement (services, contribution to employment and collective work). Economically, sustainability is determined by the level of efficiency and depends on financial independence. Socio-territorial scale is the only one which is not linked to production system and is based on farmer's way of life. On the other end, global sustainability evaluation of farm as well as creating collective references mean to be able to analyze links between the three scales of sustainability.
It is estimated that, throughout the world, almost 150
million farm households are engaged in milk production,
the majority of them in developing countries where annual
growth rates in milk consumption averaged 3.5 to 4.0 percent
in the decade 1995-2005. This is at least double the growth
rates of 1.4 to 2.0 percent for major staple foods over the
same period. Therefore, if properly directed, dairy sector
development could serve as a powerful tool for reducing
poverty.
With this in mind, the aim of the present publication is to
provide an overview of the global dairy sector and the forces
shaping its development with a focus on the characteristics
of, and implications for, ‘typical’, mostly smallholder, dairy
farming systems in developing countries.
Status and trends in the global dairy sector
Based on milk equivalents (ME), average per capita global
milk consumption amounts to about 100 kg of milk per year,
with very significant differences between countries/regions.
Per capita consumption in Western Europe is in excess of
300 kg of milk per year compared with less than 30 kg (and
even sometimes as little as 10 kg) in some African and Asian
countries. In the past, increases in global milk demand have
been mainly driven by population growth, whereas nowadays
they are increasingly also fuelled by rising per capita milk
consumption in some highly populated developing countries.
Increasing income levels are expected to raise the demand for
milk and dairy products by more than 1.8 percent per annum.
Should increases in milk production not follow suit, dairy
prices will rise significantly over past levels.
South Asia and EU-25 are the most important dairy regions,
accounting for 44 percent of global milk production. In
the period 2002 to 2007, world milk production grew by
13 percent, or by an average of 15 million tons of energycorrected
milk (ECM) per year – mainly through production
increases in China, India and Pakistan. Overall, therefore,
developing countries, which rely predominantly on
smallholder dairy production systems, have increased their
share in world milk production.
Milk is likely to become one of the most volatile agricultural
commodities owing to: (a) the strong influence that small
changes in the quantities available internationally have on
world market prices; (b) the length of time required for milk
production to increase in response to rising prices; and (c) the
delayed reaction of consumer demand to changing dairy
commodity prices.
A key determinant of milk prices is the cost of feed, which
directly affects milk production through increased production
costs and, indirectly, higher land values. Demand for grain, an
ingredient of dairy rations, is driven by the need for food, feed
and fuel of a growing world population. Higher incomes in
developing countries raise the demand for food derived from
livestock, leading to more demand for animal feed. Higher
energy prices and policies that promote bio-fuels lead to an
increased use of crops for energy production and, thereby,
push up the prices of feed and land. The Organisation for
Economic Co-operation and Development (OECD) and
the Food and Agricultural Policy Research Institute (FAPRI)
forecast that, in the long term, feed price levels will increase
to about 50 percent above those of 2002-2006.
The milk:feed price ratio is one of the main factors
determining the choice of dairy production system. The
highest milk:feed price ratio (more than 2.5) is seen in North
America, where, as a likely consequence, the most intensive
milk production systems are found. Farming systems with
lower milk yields, making little use of compound feed, are
generally observed in countries with a milk:feed price ratio of
less than 1.5.
Very few countries are self-sufficient with regard to milk. The
main milk-surplus countries are Argentina, Australia, New
Zealand, USA, Uruguay and countries of the European Union
(EU) and Eastern Europe. The main milk-deficit countries are
Algeria, China, Japan, Mexico, the Philippines and Russia. Over
the period1990-2004, global milk exports increased from
4.4 to 7.1 percent of production, while the share delivered to
formal milk processors increased from 14 to 24 percent.
International competitiveness of ‘typical’
dairy farms
Farms representative of various dairy farming systems in
Bangladesh, Cameroon, China, India, Morocco, Pakistan, Peru,
Thailand, Uganda and Viet Nam were subjected to detailed
technical and economic analyses. For industrialized countries,
similar analyses were conducted for farms in Germany, New
Zealand and the USA.
Milk returns account for 55 to 95 percent of the returns of all
farm types analysed and range from US$12 to US$36/100 kg
of ECM. Non-milk returns range from US$2 to 38/100 kg ECM.
Non-milk returns were very low for the farms in India whereas
they were very high in Germany and Morocco.
Average milk production costs in the three industrialized
countries covered by the study stand at US$31.4/100 kg, or 56
percent above the average production cost of US$20.2/100 kg
calculated for the ten developing countries while the average
price of milk in the three industrialized countries (US$31.2/100
kg) is only 30 percent higher than that in the developing
countries (US$24.0/100 kg). Thus, the overall profitability of
milk production appears to be higher in developing than in
industrialized countries, which may be one of the reasons
why developing countries are increasing their shares in global
dairy production.
© IFCN 2008 7
Given the major differences in agricultural wage rates
between industrialized and developing countries, it could be
assumed that in the latter farms have a labour cost advantage.
However, this was found not to be the case when comparing
labour costs per litre of milk, mainly because countries with
higher salaries also tend to have a significantly higher level
of labour productivity. Per litre of milk, the labour costs of
a nine-cow dairy farm in Punjab, India, are similar to those
of a 350-cow farm in the USA. The main cost advantage of
smallholder dairy farming lies in the use of low(er)-cost feed
and the overall ‘low-tech’ approach to milk production. Cows
fed on crop residues, such as straw, are significantly lower-cost
producers of milk than high-yielding, grain-fed dairy cows.
Given the rapid increases in feed prices over the recent
past, it is important to consider how this trend affects the
competitiveness of small-scale dairy farmers in developing
countries. As these smallholder dairy systems normally use
much less compound feed per kilogram of milk than dairy
farms in industrialized countries, rising feed prices increase
the cost of milk production in the latter to a larger extent
than in the low-yield systems predominating in developing
countries. Thus, as feed prices increase, ‘typical’ smallholder
dairy farms become more cost-competitive.
For dairy farming to remain sustainable, it must be able to
compete for labour on local labour markets. If the ‘return to
labour’ in dairy farming (i.e. the ‘value-added’ per hour of
labour put into dairy farming) is higher than the average local
wage rate, the dairy farming system can pay competitive
wages and should be sustainable from the labour standpoint.
The average return to labour observed in the developing
countries covered by this study is US$0.45/hour, which is
45 percent higher than the average local wage of US$0.31/
hour. In the three industrialized countries covered, the
average return to labour is US$16.30/hour, which is still
22 percent above the average estimated wage of US$13.30/
hour. These figures indicate that it would be possible for
dairy farming to compete on local labour markets in both
groups of countries. However, milk production quickly loses
its competitive advantage when local wages rise faster than
labour productivity.
Conclusions for smallholder dairy development
The various analyses and case studies presented in this
document indicate that:
small-scale milk production not only improves the food
security of milk-producing households but also helps to
create numerous employment opportunities throughout
the dairy chain, i.e. for small-scale rural processors and
intermediaries; and
small-scale milk producers incur low production costs.
Thus, if well organized, they should be able to compete
with large-scale, capital-intensive ‘high-tech’ dairy farming
systems in industrialized (and developing) countries.
Dairy development may therefore serve as a powerful tool
for reducing poverty. Devising a viable dairy development
strategy for smallholders calls for a detailed analysis of strengths,
weaknesses, opportunities and threats posed by the external
environment. The strengths of smallholder dairy systems
are low production costs; high profit margins; low liabilities;
limited liquidity risk; and relative resilience to rising feed prices
– strengths that enable smallholders to serve as a competitive
source of milk supply. However, smallholder milk producers are
also beset by a number of weaknesses: lack of knowledge and
technical know-how; poor access to support services; low capital
reserves and limited access to credit; low (labour) productivity;
and poor milk quality – all of which limit their ability to take
advantage of market opportunities.
Major opportunities for smallholder producers engaged in
dairy production are: (i) growing demand for dairy products
in developing countries; (ii) probable milk price increases;
(iii) potential to increase milk yields through relatively few
additional inputs; (iv) potential to increase dairy labour
productivity; and (v) employment generation in the dairy
value chain (for example, absorbing family labour released by
higher on-farm labour productivity). However, smallholders
in developing countries also face major threats, namely (a)
policy support for (and competition from) dairy farmers in
OECD countries; (b) increased consumer demand for food
safety; (c) environmental concerns (low-yield dairy systems are
estimated to have higher carbon footprints per 100 kg of milk
produced than high-yield systems); (d) increasing local wage
rates; (e) intergenerational discontinuity (children of the betterperforming
farmers leave the system); (f) under-investment
in dairy chain infrastructure; and (g) inappropriate dairy
development policies and investment plans.
Given the increasing ‘interconnectedness’ of global agriculture,
the ability of smallholder milk producers to participate in the
dairy market in a profitable manner will depend not only on their
own competitiveness, mainly determined by production costs,
but also, and to an increasing extent, on the efficiency of the
dairy chains of which they are part. Therefore, recommendations
for smallholder dairy development must include strategies
to increase the competitiveness in all segments of the dairy
chain, namely, input supply, milk production, processing,
distribution and retailing. In other words, to be successful, any
dairy development strategy must be based on the principle of
‘creating value’ in each and every segment of the dairy chain. This
makes formulation of a dairy development strategy a complex
task, involving a large number of stakeholders and requiring
comprehensive analysis and continuous reassessment.
This article explores the relevance of sustainable business development for society and the state. Sustainability of enterprises can be defined as demonstrating the ability to be capable of continuing the same type of business in the lifetime of the next generation. In the case of Swiss dairy farms, this type of sustainability may also depend on the willingness of the government and society to make the necessary financial adjustments. Sustainability indicators for such farms are, therefore, related to ecological and social benefits rather than simply to economic success. To evaluate the role of Swiss dairy farms, a system with economic, ecological and social indicators for measuring their sustainability would be valuable. This approach creates an integration of sustainability life-cycle assessment factors of enterprises, on the one hand, and purely economic business indicators, on the other. The approach developed in this article would be of interest to all sectors that depend on public support.
This contribution examines the extent to which farm size affects the sustainability of dairy farms in Austria. Correlations between sustainability indicators and farm size are calculated on data from accounts voluntarily provided by a network of farms. The results show that in large farms income from agriculture and forestry per unpaid family work unit was higher and the proportion of direct payments in income was lower. Smaller farms, on the other hand, tend to exhibit a higher proportion of diversification and generally contribute more to the regional economy. Moreover, smaller farms tend to provide greater environmental services than larger ones per unit agricultural area. Note, however, that larger farms show higher values of certain environmental indicators, when these are related to the produced output. This study concludes that boosting efficiency and increasing output reflects a trade-off with environmental and social services provided by the agricultural sector.
The on-farm evaluation of three feeding strategies for smallholder campesino dairy herds was undertaken in the highlands of Central Mexico with cooperating farmers: traditional, alternative and intermediate feeding strategies. All three incorporated grazing of cultivated pastures, but concentrate use was 4.0 and 7.0 kg per cow per day in the rainy and dry seasons respectively for the traditional feeding strategy, 3.3 for the alternative feeding strategy in both rainy and dry seasons and 5.0 and 9.0 kg per cow per day in the rainy and dry seasons respectively for the intermediate feeding strategy. Feeding during the dry season was based on maize straw in the traditional strategy, on pasture complemented with maize silage in the alternative feeding strategy, and with some maize silage but mostly maize straw in the intermediate feeding strategy. The trial ran between 25 September 1996 and 24 September 1997, divided by season into four, thirteen-week periods. Milk yields were recorded once per week, and live weight and body-condition score, every 28 days. Three cows per strategy that completed each period were blocked according to stage of lactation and used for the statistical analysis of a split-plot design with feeding strategies as main plots and weeks as split-plots. Overall mean milk yields were 15.5±2.05, 13.4±2.43 and 12.4±2.37 kg milk per cow per day for alternative, intermediate and traditional feeding strategies respectively, with significant interactions (P<0.05) for autumn, winter and summer. The alternative feeding strategy (with over 50% less concentrate) produced milk yields 0.24 and 0.38 higher than the intermediate and traditional feeding strategies in the dry season. In the rainy season, milk yields with the alternative feeding strategy (30% less concentrates) were 0.09 and 0.16 higher than the other two strategies. Margins per day of family labour were: alternative feeding strategy US$36.48 per day, intermediate feeding strategy US$9.22 per day and the traditional feeding strategy US$9.11 per day, although in the case of the last two there were two family members in charge of the dairy herds. Results demonstrate the successful integration of grazed pasture and maize silage for the efficient production of milk, and provide evidence on the productive use of limited campesino land resources in the face of unviable economic conditions for maize grain production.
Small-scale dairy farming has been suggested as a rural development option for Mexican campesino communities. However, there is a lack of information on how dairy farming systems operate. The objective of this paper is to analyse the social, productive and economic characteristics of small-scale dairy production systems in the central highlands in the northwest of the State of Mexico. These three characteristics were analysed on 69 farms using factor and cluster analysis. Five factors accounted for 68% of cumulative variance. Cluster analysis yielded three well-defined groups. A Kruskal–Wallis test was performed on the arable land area and the number of animals, and analysis of variance for milk yield. Economic analysis was undertaken using activity budgets. Results showed the relationships between scale and management methods and their effects on the income for the family. Families in only one of the three groups receive incomes from dairying that were above all Mexican poverty indices. This outcome is explained by the intensification in the management of their herds, which is reflected in higher milk yields, higher incomes and better access to government support schemes. Enhancement of milk production in the area studied needs differential policies which take in to account differences between the groups identified.
The IDEA method ( Indicateurs de Durabilité des Exploitations Agricoles or Farm Sustainability Indicators) is based on research work conducted since 1998 and is one way of giving practical expression to the concept of sustainable farms. Based on 41 sustainability indicators covering the three dimensions of sustainability, this method is designed as a self-assessment tool not only for farmers but also for policy makers to support sustainable agriculture. The scientific approach is based on identifying three different scales of sustainability. The application of the IDEA method is illustrated using French case studies. Linking the IDEA method with the Farm Accounting Data Network is noted as an interesting possibility to assess the sustainability level of different farming systems. The conclusion is that there is not just one farm sustainability model, and therefore the indicators must be adapted to local farming before using the IDEA method. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.
Smallholder livestock keepers represent almost 20% of the world population and steward most of the agricultural land in the tropics. Observed and expected increases in future demand for livestock products in developing countries provide unique opportunities for improving livelihoods and linked to that, improving stewardship of the environment. This cannot be a passive process and needs to be supported by enabling policies and pro-poor investments in institutional capacities and technologies. Sustaining intensification of smallholder livestock systems must take into account both social and environmental welfare and be targeted to sectors and areas of most probable positive social welfare returns and where natural resource conditions allow for intensification. Smallholders are competitive in ruminant systems, particularly dairy, because of the availability of family labour and the ability of ruminants to exploit lower quality available roughage. Smallholders compete well in local markets which are important in agriculturally-based or transforming developing countries. However, as production and marketing systems evolve, support to smallholders to provide efficient input services, links to output markets and risk mitigation measures will be important if they are to provide higher value products. Innovative public support and links to the private sector will be required for the poor to adapt and benefit as systems evolve. Likewise targeting is critical to choosing which systems with livestock can be intensified. Some intensive river basin systems have little scope for intensification. More extensive rain-fed systems, particularly in Africa, could intensify with enabling policies and appropriate investments. In more fragile environments, de-intensification is required to avoid irreversible damage to ecosystems. Attention to both social and environmental sustainability are critical to understanding trade-offs and incentives and to bridging important gaps in the perspectives on livestock production between rich and poor countries and peoples. Two specific examples in which important elements of sustainable intensification can be illustrated, smallholder dairy systems in East Africa and South Asia and small ruminant meat systems in Sub-Saharan Africa, are discussed.