ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(77)540
Vol.1977/0172

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)540 final .
Brussels .31October 1977 »
NUTRITIONAL AND DEVELOPMENTAL PERSPECTIVES
FOR DAIRY PRODUCTS INTHE THIRD WORLD
(Communication from the Commission tothe Council )
01.1(77 )540final .

SUMMARY
Thepresentnoteillustrates theimportanceofdairyproductsto
theeconomiesofdevelopingcountries,andthegrowingawarnessinthose
countriesofthenecessityformodernizingtheirdairysectors.Itfurther
demonstrates therolefoodaidcanplayinstimulating dairydevelopment,
anditsuggeststhatthereisaneedformorerationalapproachbythe
Communitytowardsitsfoodaidindairyproducts.Thenoteconcludesby
statingthatadesirableCommunitypolicyrequires,first,anannualvolume
offoodaidindairyproductsofnotlessthan150,000tonsofskimmilk
powderand45,000tonsofbutteroil;second,anassurancethatthisvolume
willbemaintainedduringthecomingyears;and,third,aneworientation
ofCommunityaidtowardsspecificprojectsintherecepientcountries.
f
ThepresentnotewillbepresentedfordiscussionintheCouncil
bydifferentgroupsofMinisters,includingAgriculture,ForeignAffairs,
andDevelopment .ItwillalsobesubmittedtotheParliament.

-1-
I.Dairy products andnutritional needs
1.Theworld food crisis ,aphrase that acouple ofyears ago
evoked images ofbloated bellies ,matchstick armsandoutstretched hands
isseldom mentioned today .Thereason ofcourse isthat thecrisis has
goneaway,atleast forthemoment *Nevertheless ,thefarwider Crisis
ofchronic malnutrition remains asserious asever .
2.Lack ofprotein iswithout question themost serious
qualitative deficiency inthenutrition ofthedeveloping countries .
Thehuman intake ofsuch abasis foodstuff asmilk varies so
widely between therich andthepoor .Itranges from 300kgperyear
ofliquid milkequivalent inindustrialized countries toaslittle as
50kginthedeveloping world asawhole ,andtomuch lessthan that in
- (1)most ofAfrica ,andofeast Asia .
Probably ,asmany as10million people dieeach year forthat
reason ,andthis figure isforecast toincrease .
Thedeficiency ofdairy protein inthedeveloping countries
isestimated at4million tons ofskim mikl powder equivalent ,i.e. about
equal tototal world production .Over onehalf ofthechildren inthe
Third World suffer invarying degrees from general malnutrition ,and
fromprotein deficiency inparticular .These figures weigh heavily on
theconscience ofthebetter offintheworld .They also show how
inadequate thepresent food supply efforts are.
Further ,protein deficiency hasserious socio-economic
consequences inthat itresults inmassesof under-nourished people who
cannot give theappropriate contribution toeconomic progress oftheir
countries .
(1)Bycontrast ,percaput figures ofcereals forhuman consumption -
another basic foodstuff -arealmost ashigh indeveloping countries
(88kg)asindeveloped ones (99kg)ifrice isexcluded ,andthey
arehigher ,143kgasagainst 114kg (inthe developed countries )
ifrice isincluded . .

-2-
3.Itwouldbenaivetopretendthatincreasedmilkconsumption
alonecansolvetheproblemofmalnutrition whichisessentially a
reflectionofpovertyandunderdevelopment .Alsoarecentviewamong
nutritionists isthatthemaindietarydeficiencyinthedeveloping world
istheenergy(calorie)gap,andthatwhenenergyintakesareinsufficient ,
partofdietaryproteinisusedtoprovideenergy.
Hence,theargumentrecentlyadvancedthatthereisnoneedfor
alargescalefoodaidinmilkpowder.Thisargumentisofcoursefallacious.
Infact,thetwoproblemsco-exist,andinmanycasesthemajor
needcontinuestobeforproteinsratherthancalories.Thisisparticularly i
trueinsituations where,becauseofthelowproteincontentofsomebasic
foods,e.g.cassava,thesheervolumeoffoodrequiredtosatisfytheprotein
(
requirements afterenergyrequirements havebeenmetisbeyondthecapacity
ofhumanstomachstoabsorb.Thisoftenhappenswithyoungchildren,with
youthgenerally,andwithpreghantandlactating women.
4.Furthermore,whilethereisnosinglefoodwhichcanbyitself
satisfyallthenutritional requirements ofhumanbeings,ofallthefoodstuffs
knownmilkcomeclosesttobeinganalmostcompletefood,especially when
reinforcedwithvitamins,asinmostpresentfoodaidprogrammes.
Finally,skimmilkpowder,hasproved .itsworthoveranumberof
years.Itspriceislowinrelationtoitshigh(36%)proteincontent.
Itcanbeusedbothinareconstituted formand/orasacomponentinthe
manufacture oflowfatmilkandofdifferenttypesoffoodproducts.It
transports andstoreswell,anditsuseintheproductionoflowfatmilk
usuallyallowsforareductionintheretailpriceofliquidmilk-an
importantadvantageinmanydevelopingcountriesinwhichretailpricesof
wholdmilkareprohibitively high.

-3-
II.Dairy development potential andachievements
5.Oftotal world liquid milk production ,which isover 430
million tons p.a.,theindustrialized countries account forabout 80persen**
Hence ,percaput production ofmilk insuch countries isabout tentimes ss
high asthat indeveloping countries .Furthermore ,milk production in
developed countries hasfprseveral years tended toexceed commercial outlets .
Bywayofcontrast ,only afewdeveloping countries have been able
toraise local milk supplies atafaster rate than that oftheir population
growth .
6.Dairy development ,because ofitscomplex interconnections ,
requires time fortheir achievement .Itisobviously more difficult in
tropical andsub-tropical environment (e.g. tse-tse flyinAfrica )than it
isinhumid temperate zones ,andinsome developing countries milk production
atreasonable prices canberuled outaltogether onecological grounds .
Ontheother hand ,there aremany areas inthedeveloping countries where
milk canbeproduced atcosts fully comparable tothose inmany developed
countries .
Inall the three continents ofthe Third World there are successful
examples ofthedevelopment ofefficient milk production ,asweel asofthe
establishment ofmodern milk marketing system .Thepresent dairy industries
ofseveral latin American countries caneasily becompared with those of
Southern Europe inthe1960 's.InAfrica ,thesuccess stories include Kenya ,
and inAsia :India ,SriLanka andKorea .
7.Theencouragement ofdairy development schemes hasbeen an
increasing concern ofanumber ofgovernments andUNspecialized agencies .
Tothis endtheInternational scheme forthecoordination ofdairy
development (ISCDD )wassetupunder FAOauspices in1970 ,with aview to
identifying andsponsoring projects covering alldairy activities ,from
milk production tomarketing ,andrequiring external assistance inthe
form ofexpertize andequipment todeal with pre-investment problems for
dairy livestock improvement ;technical andfinancial support towards
improvements oftheInfrastructure ofdairy industry ;andfood aid.
/

-4-
Sincetheinceptionofthescheme,FAOhasparticipated inthe
preparation orreviewofdairydevelopment plansin33countries and
sponsored anumberofinformaldonormeetingstodiscussandcommit
theassistance required.TheWorldfoodprogramme hasalsobeen
associatedwiththeimplementation ofthescheme.
8.Developing countries havebynowfullyrealizedthe
nutritional andeconomicadvantagesofdevelopingtheirdairysectors.
Manyofthemareintheprocessofimplementing arationalpolicy
towardsthatobjective,whichcoverstwomainelements,i.e.the
development ofdairyplantsandassociatedactivities ontheonehand,
andthecreationofnutritional projectsforthemostvulnerable groups
oftheirpopulation ontheother.Thistendencyisreflectedinthe
largenumberofrequestsforaidinskimmilkpowderandbutteroil
addressedtotheCommunity,whichcurrentlyamounttoapproximately
300,000tonsperannum.Itisalsoreflectedinthenatureofgovern­
mentrequestsfordirectCommunityaidinskimmilkpowder,whichinthe
caseofnutritional projectsincreasedfrom55,000tonsin1976to
62,000tonsfor1978,andinthecaseofdairydevelopment projects,from
32,000tonsto62,000tons.Asregardsbutteroil,requestsforCommunity
aidhavealsoshownarisingtendencyinrecentyears.
9.Themostimportantexampleofthisdevelopment isOperation
FloodsinIndia.Thisprojectwhichstartedin1970hasprovedtobenot
onlythelargestprojectofthistype,butalsooneorthemostcomprehensive
ruraldevelopment projectsundertaken anywhere.Ithasbeenextremely
successful thankslargelytoitsbrilliant management anditsequally
brilliantinitialconceptinvolving,forthefirsttime,largemassesof
smallfarmersinadairydevelopment project.Uptothen,dairyprojects
ofthistypehadtobeconfinedtosmallnumbersoflarge,relativelyrich
farmers,inordertoqualifyforsupportfromworldbankinginstitutions .

Apartfromassuringasteadyflowofmilksuppliestofourmajor
citiesinIndiaandlayingthefoundations ofamoderndairyindustryin
thatcountry,theprojectcountsamongitsprincipalpracticalachievements
thetwicedailypaymentformilkthroughouttheyeartosome2million
smallfarmers;virtuallyfreeandquicklyavailableartificialinsemination
andveterinaryservices;technicaladviceonmattersrelatingtoanimal
husbandryandcroppingpatterns;continuoussupervisionforthevillage
co-operative societies;initialsuppliesofequipmentforeachsociety
(e.g.butterfattestingequipment,chemicalsandmilkcans);organizing
andcontractingthetransportofmilkfromthevillagestothemilkplant,
etc.
Thisprojectismainlyfinancedthroughthefundsgeneratedby
thesalesofdairycommoditiesprovidedbyfoodaidprogrammes from
developedcountries.Thisseemstobeaveryefficientwayofutilization
ofthisformofaid,whichistoberecommended-fromtheCommission's
pointofview-inthecaseofcountrieswheresuchdairydevelopment
projectsareimplemented orenvisagedandfeasible,likeTanzania,Ghana,
EgyptorevenverysmallonesasSao-TomeePrincipeandGuinea-Bissau .
10.Accordingtosuchanorientation,theCommissionhasjust
(1)submittedtotheCouncilacommunication warmlysupportingCommunity's
participation inthesecondphaseofOperationFlood,whichisdueto
startin1978.
(1)COM(77)541final

ROLEANDCONSTRAINTS OFFOODAID
11. AsjustdescribedintheIndiancase,bothskimmilkpowder
andbutteroil canbeusedtoassistinthedevelopment ofthelocal
milkproduction anddairyindustry.Byreconstituting skimmilkpowder
plusbutteroilintoliquidmilk,governments havebeenoperatingotherwise
underutilized dairyplantsatfullcapacity,thusbridgingtheinitial
gapbetweenlocalrawmilksuppliesanddemand.Thesaleproceedshave
thenbeeninvestedinthemodernization oflocalmilkproduction and
marketing,whichinduecourseshouldallowthefoodaidtobephased
out.
Foodaidisconsequently justifiednotonlybecauseof
balanceofpaymentsandnutritional considerations ,butalsobecauseof
theparticularroleitcanplayinoverallruraldevelopment ;itcontributes
tocreateemployment,tohelpintensify anddiversifyagriculture,to
teachskillsandtoraiseeducational standards,andtoimprovethe
incomesofmarginalfarmersandoflandlessagricultural workers.
12. Thereareofcourseimportantconstraints onsuchuseof
foodaid,atleastintheshortrun.Sincethetypicalpatternoften
isformilktoheproducedonruralareasandconsumedinhighpopulation -
densityurbancenters,andinviewoftheperishable natureofmilk,
appropriate distribution systemshavetobedevelopedormodernized
inbothruralandurbanareas.Thenecessaryinfrastructure ofdairy
supportingactivities mustbeestablished onandoffthefarms,including
thecreationofanadequatefarmtomarketroadnetwork,ofretailoutlets
fordairyinputs,ofassemblycentersequippedwithcooling,sanitary
andgradingfacilities,ofaviableextensionserviceandeasilyavailable
credittofarmers,andofawholesystemofeconomicincentives to
increaseproduction andimprovethequalityofdairyproducts.
Consequently ,inordertohaveanimpactatall,dairy
foodaidmust,fromtheplanningstageonwards,becombinedand
integratedwithotherinputsandvariousformsoftechnicalassistance .

-7-
13.Thismakesallsuchprojectsespeciallyvulnerabletosudden
changesinthesuppliesoffoodaidinputs.
Unfortunately ,thevolumeoffoodaidindairyproductshas
shownasharpfluctuation inrecentyears.Theresultinginstability
ofsuppliescreateddifficultproblemsfortheeffectiveutilization
offoodaidbythececipientcountriesandbyinternational organizations .
Anumberofprojectshadtoberetarded.
Duetothissituationitisimportantthatthesupplyoffood
aidfortheseprojectsbedealtwithonamorecontinuousbasis.
IV.COMMUNITY AIDINDAIRYPRODUCTS;NEEDFORAMORERATIONAL APPROACH
14.Theresponsible attitudeofthedeveloping countries shownin
theirhandlingofdairydevelopment problems,andtheirunquestionable
needforcontinuing largequantitiesoffoodaidinthisconnection,
canandshouldbematchedbyacorresponding effortonthepartof
theCommunity.
TheCommunityhassofarfollowedagenerous,andmuch
appreciated policyindairyfoodaid.Itseffortinthisfieldwas
particularly valuableduringtheperiod(late1960'stomid-1970's)
whentheCommunity wasvirtuallytheonlysourceoffoodaidinskim
milkpowderonanysignificant scale.
Nevertheless ,theexistingpolicyoffersascopefor
improvements inthreemaindirections,relatingtothegeneralorientation
oftheoveralleffort,itscontinuity anditssize.
15.AsalreadyindicatedinpartII,Communityfoodaidindairy
productsoughttobeprogressing beyondmerebalanceofpayments
supports,towardsdirectassistancetospecificprojects,inparticular
thoseofnutritional anddevelopmental character.Itisamainfeature
intheproposed1978programme,whichhasalreadybeensubmittedtothe
Councilandthismustbethegeneralguidelineforthefuture.
Byadoptingthisorientation,theCouncilwillensureahighly
effectivefoodaidIndairyproducts,andgivetangiblesupporttothe
sensibledairypoliciesthatdevelopingcountriesarecurrentlyevolving.

16.Itshouldalsobegenerallyacceptedthattheerraticfluctuations
infoodaidavailability constitute amajorproblemforitseffective
utilization bytherecipientcountries.^Whateveritsmerits,foodaid
indairyproductsisforrecipientcountriesnotaneasyformof
developmentassistance.Theprojectsthatcanabsorbthistypeoffood
aidcannotusuallybecreatedquickly,andoftenramajorpre-condition
oftheircreationisareasonableassuranceofthecontinuityoffood
aidsupplies.
17.TofulfillthedescribedgoalsofCommunityfoodaid,the
Commissionconsidersthatacontribution ofatleast150,000tonsof
skimmilkpowderand45,000tonsofbutteroilisnecessaryinthe
comingyears,thesetwofigurescorresponding tothelowerlimitsof
ranges<150,000tonsto175,000tonsformilkpowderand45,000tons
to65,000tonsforbutteroil)alreadyindicatedbytheCommissionin
thecontextofitsearlierpluri-annual planningproposals.
.Anyallocations belowthislevelwouldbetotallyinadequate
inrelationtothesizeandnatureoftheneedsofthedeveloping
world,toitsimmediateabsorptioncapacitywhichhasbeensubstantially
increasinginthecaseofspecificprojects,andtothequantitiesof
aidfromotherdonors.
FOODAIDANDSURPLUSDISPOSALS
18.Ithasbeenarguedthatitwouldbewrongtooffersucha
largequantityofskimmilkpowderasfoodaid,becausethiswould*
confirmthesurplusdisposalcharacterofaid.Theremighthavebeen
moresubstanceinthisargumenthadtherenotactuallyexistedastrong
needinthethirdworldformuchhigherquantitiesthanthosethatwere
everoffered,orhadtheskimmilkpowdersurplusesbeendeliberately
producedinordertoprovidefoodaid.Neither,ofcourse,hasbeen
thecase.
Infact,eventhoughfoodaidbeganwiththeagricultural
surplusesoftheUSA,andeventhoughsomeofitsimpetustodaycomes
fromthedairysurplusesoftheCommunity,foodaidhasinrecentyears
acquiredsomethingofanexistenceofitsown. !

-9-
Thus,intheUnitedStates,fooddonationsareincreasingly
regardedasanacceptedpartoftheAmericanoverallaidefforts.Also,
thefigureof10milliontonsofcerealshasbeenadoptedbythe
international communityasaminimumfoodaidtargetatatime(1974)
whentherewerenocerealsurpluses.Further,netfoodaidgrantsand
loansbyOECDmemberstatesin1970represented only9percentofthe
totalnetofficialdevelopment assistance;in1973-75thecorresponding
proportion became16percent.
19.Furthermore,muchasonemaydeploretheexistenceof
structural surplusesofdiaryproductsintheCommunity,theyare
notgoingtodisappearfromonedaytoanother.Thus,thecurrent
levelofCommunitystocksinskimmilkpowderisabout1milliontons.
Inaddition,theprospectsforthenextfewyearsindicatethatout
ofatotalproductionof2milliontonsofskimmilkpowderp.a.,about
500,000tonswillconstitute asurplusoverandabovethevolume
requiredtomeettheexpectedrequirements oftheCommunityforhuman
(
consumption andfortheessentiallivestock (feedingofcalves)needs.
Aboutonehalfofthatsurplusisexpectedtobeexported
commercially .Uptonow,remainingquantities havebeenusedbothfor
foodaidandpigfeeding.Ithastobenotedthatthecostofpig
feedingrepresents asmuchas75percentofthecostoffoodaid
(includingseatransport)withoutcountingthestoragecosts.Allowing
forstoragecosts,thecostofpigfeedingcanequalorevenexceed
thatoffoodaid,shouldskimmilkpowderbestoredforaperiodlonger
than2.5years.
IV.CONCLUSIONS
20.Developingcountriesarewellawareofthevalueofdairy
productsinthebattleagainstmalnutrition ,andoftheeconomicand
socialbenefitsofdairydevelopment.Theyarethereforeintensifying
theireffortstoimplementnationaldairypolicies;butforthisthey
needexternalassistance,andinparticularthegiftofcommodities .
\ ;

-10-
TheyLooktotheCommunitytoassistthemintheireffortsinviewofits
positionastheirlargestpotentialsupplier.TheCommunityhasan
interestandaresponsibility tofaceuptotheseexpectations .
21.Todoso,theCommunityneedsitselftosetuparationalfood
aidpolicyin>dairyproducts.Thisimplies,first,anewemphasison
utilizationofdirectaidinspecificprojectsinthedeveloping
countries;second,anannualvolumeofaidofatleast150,000tons
ofskimmilkpowderand45,000tonsofbutteroiI;andthird,an
assurancethatthisvolumewillbemaintainedduringthecomingyear.
.Bearinginmindtheexistingstructuralsurplusofproduction
overforeseeableeffectivedemand,suchapolicyiswellwithinthe
Community'sreach.