Dairy Methodology

We’re pleased to release the Smallholder Dairy Methodology>> developed in partnership with the Food and Agriculture Organization (FAO), the International Livestock Research Institute, and the Ministry of Agriculture of Kenya. By linking productivity gains to greenhouse gas emissions (GHG) reductions and impacts toward the Sustainable Development Goals, the methodology unlocks new streams of finance for smallholder dairy producers and channels funds for developing countries to meet their own climate and development objectives. These impacts can in turn be leveraged by companies seeking to meet growing demand for dairy products while cutting GHG emissions.

About 150 million small-scale dairy households—equivalent to 750 million people—are engaged in milk production globally. Many of these smallholder producers live in developing countries, where their activities have a direct bearing not only on the livelihoods of their own families, but also on employment, food security and nutrition for their communities.

While providing an important source of income, smallholder dairy production can also have negative effects on the environment and climate by emitting greenhouse gases, giving rise to land use changes, consuming water and nutrients, and polluting water sources via fertiliser leakage.

Despite its major socioeconomic and environmental impacts, the livestock and dairy sector in developing countries has had little access to climate finance, in part due to the absence of methodologies that envelop practices to reduce emissions and deliver sustainability impacts under standards that allow these efforts to be measured, reported and verified.

Small-scale interventions lead to big impacts

Our innovative Smallholder Dairy Methodology allows smallholder dairy producers to access new streams of climate finance by improving management practices and technologies that demonstrate reduced GHG emissions and sustainable development benefits for their communities. Enabling interventions at the smallholder scale through a rigorous, standardised framework allows their impacts to scale up to the country level, thereby making broad and meaningful contributions to climate security, poverty alleviation, gender equality, sustainable consumption and life on land.

“Investing in productivity improvements in smallholder dairy systems is an efficient way to simultaneously achieve GHG emission reductions and ensure food security. With this methodology, climate finance can now have a role in smallholder dairy development, which is a major development from where we were a few years ago,” says Henning Steinfeld, Chief of the Livestock Information, Sector Analysis and Policy Branch of FAO. “This is great news for the dairy sector because this methodology will help to channel finance to projects that have real impacts on the livelihoods of millions of smallholder dairy farmers.”

Investing in low-emissions growth for developing countries

Transparency and accountability are essential for driving the investment needed to achieve the transformative climate goals established by the Paris Agreement. As a tool for measuring, reporting and verifying emissions reductions in the dairy sector, this methodology boosts investor confidence by ensuring that finance toward climate and sustainability initiatives in the dairy sector puts developing countries on a trajectory toward low-emissions growth.

Brendan Smith, Gold Standard’s Technical Director for Land Use, underscores the need for verifiable, science-based outcomes in taking climate action, “The private sector’s ability and willingness to shift finance flows to climate-compatible investments and resilience strategies depends on how confident they are that outcomes are real and verified, and that the countries they operate in are taking serious measures to achieve their climate targets,” Smith said. “This methodology gives both the dairy sector and private sector assurance that they can effectively develop projects and reduce emissions from the dairy sector,” Smith added.

The smallholder Kenyan dairy sector will be the first country to pilot the methodology, which is also at the core of the country’s Nationally Appropriate Mitigation Action (NAMA) for its dairy sector. The activities planned under the NAMA include assistance and incentives to the private-sector to invest in low-emission, gender-inclusive dairy advisory services aimed at facilitating on-farm adoption of improved production practices and technologies. This is expected to enable investments in energy efficiency and renewable energy technologies in milk collection, chilling and processing; and supporting adoption of household biogas technology. The dairy NAMA will reach 227,000 dairy producing households across the country and is expected to yield an additional 6.6 billion litres of milk per annum, reaching over 30 million consumers. Through the promotion of renewable energy (biogas), the NAMA is also expected to provide additional benefits in the form of reduced labour and health burden of fuel wood collection especially for women.

According to Robin Mbae (deputy director of livestock production, State Department of Livestock in Kenya), “solid baseline data, a sound MRV methodology, and robust co-benefits are key elements to launch the NAMA and secure stakeholder support.” “The dairy NAMA will also be integrated with Kenya’s Nationally Determined Commitment (NDC) as a post-2020 instrument for achieving Kenya’s commitment towards reducing GHG emissions,” added Mbae. Over the 10-year implementation period, the expected total emission reductions from the implementation the NAMA are 8.8 million tonnes CO2 eq.

This demonstrates the power that lies in assurance of impacts for interventions that at the intersection of the climate and development agendas. Certainty of impacts attracts investment. Investment begets positive social and environmental impacts. The virtuous cycle continues.

Access the full methodology here>>

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