Dairy Marketing Modernization as a Means of Nutritional Improvement: Some Developmental Considerations

Abstract

IMPROVEMENT in human nutrition is increasingly cited as an objective of international assistance programs. Successes in expanding foodgrain production have allowed consideration of the composition of food intake and human effectiveness in physical and mental activity. Nutritionists of both the agricultural and medical schools exhibit a strong attachment to milk consumption, with sound biological and pathological reasoning. Agricultural economists concerned with the level and distribution of rural income justify dairy development with reference to high income and price elasticity of demand for dairy products and labor intensity of the enterprise. Unfortunately, bulkiness and perishability of the product impede realization of these gains. Reliance on international transfer of transport and processing technology in India has resulted in a generally poor economic performance. While geographically expanding market access, modernized fluid milk marketing systems are not competitive with old established milk marketing systems and fail to achieve wide distribution of nutritional benefit to segments of the population in greatest need. Transfered capital-intensive processing and packaging systems have been supplemented with labor-intensive procurement and distribution arrangements. Resulting improvement in labor productivity has been minimal despite extremely large increased investment per unit of labor employed. Reliance on the reconstitution of concessional nonfat milk powder imports to improve plant utilization and nutritional performance is hazardous owing to instability of supplies. Unavailability of supplies would seriously jeopardize the existing modern systems. Dependence on foreign equipment and financial support aggravates the resolution of conflicting objectives in public sector enterprises, particularly with respect to increasing milk consumption in low-income communities and achieving public and private employment objectives. Capital-intensive technological innovation in marketing systems in many less developed countries poses a greater employment threat than such innovations in agricultural production. Displaced agricultural labor may be of the disguised form or likely shift to agricultural trade. Displaced labor from the long-established traditional marketing systems may enter the urban labor pool. The competition that causes rapid innovation in the European and United States food processing equipment industry does not prevail in developing countries, with the consequence that individual firms may recommend transfer of newly obsolescent equipment, thus extending production runs. Under these circumstances firms may be reluctant to support recommendations to developing countries with appropriate examination of technical and organizational requirements. Institutional innovations are required to ensure that national and international aiding institutions, in cooperation with private industry, are oriented to servicing current needs in developing country agricultural markets rather than engaging in the creation of demand for new food forms and technologies. Past programs in dairy development have assumed a high degree of transferability of food consumption habits and preferences. Ready acceptance of such changes is not characteristic of communities in need of nutritional improvement. Certain countries, such as Cyprus and Lebanon, have achieved large increases in per capita milk consumption through dairy product imports. Dairy development for import substitution in these countries could reduce milk consumption among low income groups, with resultant deterioration in nutritional status accompanied by a narrow distribution of consequent agricultural income gains.