Emissions from dairy sector going unaddressed: IATP report

There has been intense scrutiny in the past few years of the greenhouse gas emissions (GHGs) emitted by industrialised sectors such as coal-dependent power, automobile and aviation. There is one industry, however, which is emitting a staggering amount of GHGs, but is largely still under the radar – the global milk dairy industry.

A new report by the Institute for Agriculture and Trade Policy (IATP), released this week, revealed that the emissions levels of this industry are rising rapidly. According to the report, the total combined GHG emissions of 13 of the world’s largest dairy corporations rose by 11% between 2015 and 2017. Some of them reported an emission rise of 30%.

In 2017, these companies together emitted more GHGs than two of the top 20 fossil fuel emitters, BHP and ConocoPhillips.

The study states that this rise in emissions occurred during a dramatic crash in global dairy prices between 2015-2016. The crash can be attributed to the increase in production by giant corporations, which in turn created an oversupply of dairy in the markets, pushing prices below the cost of production. This forced several medium- to small-scale farmers to take on mounting debt and farm incomes decline drastically in four of the major dairy-producing regions of Europe, USA, New Zealand and India. This problem has only been compounded with the COVID-19 pandemic, which has forced farmers to bear the production risks, while corporations remain largely unscathed. There have been several reports of farmers being forced to dump milk on the streets in recent times with the closing of markets and corporations refusing to buy milk.

Source: IATP Report Milking the Planet

One of the main reasons why the sector’s GHG emissions continue to rise, according to the study, is that none of these companies are forced by law to publish or verify their climate emissions. They do not have to submit plans that can help limit global warming to below 1.5 degrees Celsius. In fact, only a handful of them actually publish their emission levels, while none of them have committed to reducing these levels either through their supply chains or from the animals themselves.

India’s dairy cooperative giant, Amul, was the most impacted by the price crash in the global dairy market, according to the report. The crash in 2014 forced a decision to halt exports by Amul and other major Indian mil producers. Instead, about 75% of the milk powder slated for exports was converted back to liquid milk and sold in the domestic market. This, according to the report, caused Amul’s milk annual intake to rise from 6.5 million tonnes to 9.3 million tonnes between 2015 and 2017. The report goes on to note that the glut of supply in the domestic market at the time has contributed to the contraction of small-scale dairy farmers with 1-2 cows operating predominantly in the rural and unorganized sector. The proportion of dairying households in the country with small farmers 7 points from 52% to 45% between 2000 to 2016 while proportions of households owning larger herds have increased. Even as milk production has expanded, the report states that small farmers are being squeezed out for the market due to rising costs of fodder and feed.

According to the report, the current trends in India’s dairy industry is also bringing about an increase in associated emissions. Amul’s increase in milk intake between 2015 and 2017, the study claims, led to a 43% increase in associated GHG emissions. Export subsidies of 20% on certain dairy products in 2016 has since led to a stabilization and expansion of dairy exports.  The report signals that trends in the Indian market signal a movement towards a highly capitalized industrial system of dairying. In high-income dairy producing countries, this trajectory has “led to rising emissions, farm loss, farm debt and rural disintegration,” the authors write.

“Two years after we reported our first estimates, our second study shows that the dairy industry remains unaccountable. This means that governments must regulate powerful corporations that control the milk supply and oblige them to foot the bill for environmental and public health impacts, rather than villainising farmers trapped in the system,” says Shefali Sharma, director of IATP Europe and author of the report.

The study provides a clear solution to the problem. It states that governments must take hard-hit rural communities into account when drawing up policies. Mega dairies, which are flooding the markets, are pushing out small-scale farmers and hurting rural economies, the study states. India is one of the regions headed in this direction, according to the study, with the government planning to increase its milk processing capacity by 2025 with policies that support a ‘highly capitalised industrial system of dairying’.

Schemes that support supply management are the need of the hour, according to the study, because they help prevent overproduction, balance supply and demand, thereby stablilising prices.

“Even as industrialized countries are tasked to raise their climate ambitions, dairy corporations continue to expand in power and production, while rural communities suffer. And yet, policies that offer the most promise in stopping over production and ensuring fair prices to producers are the same ones that can help reduce emissions. Governments can and must redirect public funds to enable farmers to dairy in a way that preserves their livelihoods and the planet,” Sharma said.