Dairy products are mainly produced in developed countries, but production in developing countries is growing at a rapid pace. According to the FAO, dairy consumption in developed countries is stable with an average of 200 liters/person/year compared to an average of 45 liters/person/year in developing countries. These products represent a diversified and segmented market with various consumers. Like for most agricultural products, prices paid to farmers are very low. This is one consequence of the growing power of supermarkets and concentration in the processing sector, especially at the distribution and retail level. The development of strong cooperatives and better producer-processor relationships and strategic alliances could be one way of improving farmers’ returns. Product quality is crucial within dairy markets, and this implies the development of specific standards. Additionally, dairy producers in developing countries are facing two majore challenges: how to meet standards in international markets for dairy products and how to address the impact of import surges of dairy products within domestic markets. 

Established in 1963, the IFAP Group on Dairy Products made a proposal for the creation of an International Dairy Products Council in 1964. These proposals were finally achieved in 1979 with the creation of an International Dairy Products Arrangement in the Global Agreement on Tariffs and Trade (GATT). The Group held its first World Dairy Producers Summit in Toronto, Canada in June 1987, and it held its first World Dairy Producers Round Table on Trade in Vancouver, Canada in November 1999.

IFAP activities concentrate on how to improve producers’ returns and strengthen their involvement ongoing work on standards development at an international level.

In September 2009, IFAP has signed the Global Dairy Agenda for Action highlighting the producers’ and industry commitments to making a positive contribution to the global action in addressing climate change (for further information www.dairy-sustainability-initiative.org).

Since the 1970s, the international prices of commodities, including milk, have declined and both farmers in developing countries as well as developed countries have suffered from that. However due to their high dependency on a limited number of commodities, the reduction of agricultural commodity prices in developing countries, particularly in African countries, is one of the biggest causes of poverty.

The main challenge for farmers is how to get a better price in international markets. This price collapse is generally characterized by an oversupply and therefore would imply long-term solutions to address supply-demand management, inherent price volatility, high degrees of market concentration and a development-friendly outcome to the Doha Round of negotiations at the WTO (in particular addressing tariff escalation and export subsidies issues). These responses could be efficient if only in the meantime at national level, diversification is promoted in most of commodities dependent countries.

Commodity issues have always been a central part of the work of IFAP, from its beginnings in 1946. IFAP supported the establishment of the International Wheat Agreement in 1948, and throughout the 1950’s up to the 1970’s a central part of IFAP’s advocacy work was to press for international commodity agreements. IFAP also pressed the GATT to include consultations and negotiations on commodities as early as 1969.

There are many commodity problems that are common to all producers, such as low international prices, commodity support programs, measures to empower farmers in the market, traceability, etc. IFAP therefore created a Commodities Conference with a plenary session that is linked to meetings of the IFAP Executive Committee every year (usually in May). The 1st IFAP Commodities Conference was held in the USA in 1995.

The main objectives of the IFAP dairy group are to:

• to primarily respond to the needs of IFAP’s members based on the recommendations made by the Dairy products, as well as other identified challenges in commodities markets.
• to ensure that farmers are fully involved in the on-going debates on long-term solutions of problems in the milk and dairy products markets. For that, IFAP would seek to strengthen its collaboration with specialised commodities organisations as well as international organisations, research institutes and non-governmental organisations working on milk and dairy products.
• to ensure that relevant information is available to all members and that it would serve as a platform for discussion and information sharing among members.