Smallholder dairy in Vietnam competitiveness framework for Asian
Vietnam's dairy industry is relatively young, having only started in the 1980s. Today, most of Vietnam's milk is produced by up to 20,000 smallholders, and the country's herd is around 110,000 dairy cattle with a total milk production of about 220,000 tonnes per year.
All 4 provinces where the four studied models are located have experienced a herd increase by two to four times between 2001-2007. Three of the models have operated for 25 years and one for 12 years. The key reason for these models to be still operating despite low profitability during some years is likely to be that smallholder dairy developed there in a gradual manner. Many initial weaknesses were solved 'on-the-job' rather than artificially corrected and that enabled the models to reach a favourable balance of its strengths and weaknesses.
Models that have been set up from 2000 onwards have experienced serious difficulties if not almost complete failure during their first years. The difficulties may be a combination of several weaknesses that were similar to the ones met by the older models. However, the new models started in a period when production costs was high but milk price was low.
Difficulties of new models include,
1) Low milk production
2) Insufficient support services
3) Lack of learning from successful models
The article also touches on options for improvements and expansions for smallholder dairy models, as well as replication of successful models.
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Article made possible through the contribution of Food and Agriculture Organisation of the United Nations.