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That needs to shift

Interview with Shefali Sharma (IATP) on the effects of the dairy industry on climate and nutrition.

iz3w: The World Bank has invested 1.8 USD in big players of the dairy industry in the last decade. Why is this done? What is the purpose?

Shefali Sharma: The World Bank’s core responsibility is to support development in developing countries. As such, the idea is presumably to help rural areas in developing countries enhance their livestock sectors. In reality, however, the private sector arm of the World Bank called the International Finance Corporation, exacerbates problems endemic to markets. For instance, the biggest problem with the livestock sector is  the enormous power that large meat and dairy companies have over rural producers. They swallow up small companies, decreasing the number of slaughterhouses, making farmers dependent on whatever low prices these companies offer. As they become more powerful, they are even more successful at preventing environmental or public health regulations that might penalize them for their mass production, mass pollution model.

It’s scandalous that pubic tax payer money from the World Bank goes to Minerva (major beef company sourcing from the Brazilian Amazon and the Cerrado), Dutch dairy giant, Arla Foods or China’s feed producing giant, New Hope. These companies don’t need public money? Far from it. They need to be held accountable for all the environmental and social costs of their business model.


How do you see the role of dairy farming in general on the nutrition situation in countries with difficult nutrition situations?

Countries with problems related to malnourishment and undernourishment have significant structural problems that have little to do with how much dairy production exists in the country. India is a perfect example of this. It is by far the largest producer of milk in the world. Every global corporation wants a piece of that market. And yet, there are serious problems related to nutrition there that have nothing to do with the scale of production—it is all about the type of safety net state and the federal governments provide to rural communities, how human rights and social justice is handled in the country, whether the public food distribution system works and who it benefits. Same with regions such as sub-Saharan Afria—dairy can be a very important source of nutrition, but that means rural areas need basic support for their livelihoods, which is usually farming of crops and or livestock. Here, we have to look at the type of conditionalities the World Bank, the IMF, and EU and the US as major donors have imposed on these countries to allow agriculture to thrive without going directly into the hands of global capital. 

Does it make a difference (on the climate impact and nutrition situation) whether milk products are produced by relatively small farms or by the big dairy industry?

In our Milking the Planet report, we show that the shift towards ever larger farms has put so many farmers out of business in both the Global North and the South as well as tremendously increased emissions. Larger farms produce far more milk, more emissions and lower milk prices globally. This puts small producers out of work. When you have no income, it affects your nutrition and well being. We advocate for supply management policies that can limit milk production, increase rural incomes and reduce emissions. Do we think it would result in far less milk that equates to a lack of dairy protein—absolutely not. Once again, supply management has to work in tandem with social policies that ensure food security and nutrition for those who are in need. The EU and many other industrialized countries over consume dairy—that needs to shift.


Is the big dairy industry an important employment factor in the Global South?

Big dairy is mechanized, so how can it be an important source of employment in the global South where  millions of people, often women, are agrarian dairy producers. Big dairy shrinks the number of people that produce while increasing production—those with the capital to invest in high producing cows and the infrastructure that comes with a mass production model survive, those who cannot have to look elsewhere. Often, it also leads to greater indebtedness to invest in all this infrastructure while milk prices tumble to really low levels due to overproduction. The biggest challenge for big dairy is that dairying in many parts of the Global South is in the informal sector and disconnected from global markets—this is where buffalo milk and local milk production is an important source of nutrition and livelihoods for people. Here, we need to see governments step in and support these communities to ensure these markets thrive and are not destroyed by Big Dairy.


What can you tell us about working conditions in the dairy industry worldwide? Are they similar to the meat industry? Do they vary a lot between countries of the Global South?

I think the working conditions in the dairy sector are very different than the meat industry—machines do a lot of the processing, whereas you need workers doing a lot of assembly line work for the processing of meat. Having said that, I have not looked into the working conditions in the dairying sector so am not the best person to answer this question.


Does the veneration of the cow in India have any effect on how cattle is held and how the dairy industry functions compared to other countries?

Cows in India are not treated badly per se as you would think in terms of confined spaces etc, though we are seeing the rise of big dairies in India too. However, there is a feed and fodder problem in India. You see a lot of very skinny cows and undernourished cattle. There are a lot of reasons for this, including severe inequality, bad agrarian policies for the poorest of rural producers. Those that have cows, especially women who own 1 or 2 cows, the average for many dairy producers in India, do take care of their cows. It’s a vital safety net for these women. And cooperatives like Amul have done a lot to integrate these women into their supply chain and to ensure that they have incomes. So, it is a complex picture. There is a mix of private dairies, cooperatives like Amul that are sort of nationalized and other independent dairies with a really social cooperative model, but it is all in a state of flux and changing.


Is the damage that the dairy industry does to the climate comparable to the impact of the meat industry on greenhouse gas emissions worldwide?

That is an excellent question. We found in our Milking the Planet study that just 13 dairy companies match the UK’s entire emissions. That is pretty significant! We also found in our joint report with the NGO GRAIN in 2018, that five meat and dairy companies’ emissions combined exceeded that of Shell or Exxon or BP in one year. Two out of these five were dairy companies: Fonterra and the Dairy Farmers of America. We have some of the largest dairy processing companies and emitters headquartered here in the EU: Le Groupe Lactalis, Arla, Friesland Campina, Danone, DMK Deutsches Milchkontor. They are all here.

What would you suggest to change the situation to the better?

We need to start by getting governments to accept that these companies need to be regulated and held accountable for their emissions. Passing on the costs to farmers and expecting farmers to change while the industrial model demands the status quo is unacceptable. These companies have to internalize the cost of making these changes in what they pay farmers and how they invest in their supply chains. Governments have to ensure that they create a plan for a Just Transition out of mass production so that rural dairy producers do not suffer. Right now, governments don’t even demand that these companies publish the number of animals they have in production. Without basic transparency about how many animals are in these companies’ supply chains, how can we set baselines for reducing emissions? Some very basic accountability is lacking at this point and we need much more than that for the climate and environmental challenges we face.

We have a Farm to Fork strategy now—how bold will it be? It is a significant opportunity to shift how we produce. We are still struggling with the CAP negotiations. Things as they stand will not deliver a transformative change, but this needs to change. And National CAP strategic plans have to demonstrate this willingness to tackle these tough climate and environmental issues and help shift the money to support the transition.  We also need supply management to increase rural incomes as I said above and social policies that ensure adequate nutrition.


Shefali Sharma is the Director of the European Office of Institute for Agriculture and Trade Policy (IATP)

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