Diving into Iraq's dairy sector: sector scan, market figures and promising opportunities
The dairy sector is historically important in Iraq and the demand for domestically produced dairy products is high. Since a few years, the country attempts to modernize this sector and rebuild the needed infrastructure and institutions. Private investors started new large scale projects, several with involvement of Dutch agribusiness. Therefore, the Consulate General of the Kingdom of the Netherlands in Erbil asked VetEffecT to develop a sector scan.
The study aims to provide an overview of the dairy ecosystem and to identify challenges and opportunities for Dutch enterprises for trade and collaboration. Because the dairy sector of Iraq is mostly concentrated in the Kurdistan Region of Iraq (KRI) due to its favourable climatic conditions and the prominent government and investment support, the study especially focusses on KRI.
The resulting report provides a concrete list of opportunities for Dutch companies in the last chapter. It starts with an exploration of the dairy sector’s historical significance and provides data on livestock populations, dairy production, and markets. Furthermore, the report explores farm management, animal health, the policies and players in the sector, the industry, and sustainability considerations.
Key highlights of the report:
- Market Insights: As of 2023, the Iraqi dairy market is valued at approximately $1.4 billion, with projections indicating a compound annual growth rate (CAGR) of 6.33%, potentially reaching around $5.819 billion by 2029. This demand is primarily driven by a young population and a growing preference for domestically produced dairy products such as milk, cheese, and yogurt.
- Production Challenges: At present, local dairy production fulfils only around 10% of the demand for fresh milk. Key challenges identified include a heavy reliance on imports, water scarcity, insufficient infrastructure, and limited access to advanced agricultural technologies. The report suggests there is considerable room for enhancing local feed production and veterinary services.
- Animal Health and Welfare: Examination of current situation relating to animal health and welfare reveals an urgent need for enhanced health services and veterinary education within the region. Recent advancements in animal welfare laws indicate positive progress in this domain.
- Sustainability Considerations: Environmental challenges such as water scarcity, climate change, and soil degradation are increasingly significant. The report underscores the importance of adopting sustainable agricultural practices, including techniques for water conservation and soil management, to ensure the longevity of the sector and individual dairy projects.
- Opportunities for Collaboration: The report identifies various opportunities for collaboration between Dutch companies and local dairy stakeholders, particularly in areas such as modern farm infrastructure, veterinary services, and genetic improvement of livestock. But also in the area of organization within the value chain. The application of efficient production methods and robust supply chain practices could provide substantial benefits to the KRI dairy sector.
Conclusions and recommendations:
Despite existing challenges, there is substantial potential for growth of the dairy sector in Iraq, in particular in the KRI. Dutch companies could endeavour opportunities in the field of veterinary care, sustainable practices, feed, or farm and processing technologies. VetEffecT recommends not to seek to build conventional high tech farms, but to integrate modern climate smart solutions and management approaches.
To promote the long-term viability of dairy production in the KRI, according to VeTeffecT, the following issues are priority:
- Training for farmers to enhance their knowledge of animal health, farm and hygiene management, dairy production methodologies, and water efficiency.
- Local additional feed production to diminish reliance on imports and enhance self-sufficiency, on condition of long term water availability.
- Investment in upgrading infrastructure related to milk collection and processing.
- Public-private partnerships that could advance local dairy development initiatives.
Dutch dairy sector companies are well positioned to help facilitate a transition to a dynamic, sustainable dairy sector in Iraq that meets local consumption demands while adhering to international standards and creates economic opportunities for the community.
Download the full report below to explore the findings and recommendations in detail. Enjoy reading!