Creating a livestock sector with global
competitor advantages in East Africa
Amos Omore
International Livestock Research I...
Key messages
• Trends show global and Africa’s livestock
industry is growing rapidly
• Significant opportunities exist for...
The global & EA’s livestock sector is growing rapidly
Livestock dominate list of highest value commodities:
4 of top 6 globally and 3 of top 6 in Africa
Highest value
commoditi...
Percentage growth in demand
for livestock products: 2000−2030

5
Based on anticipated change in absolute tonnes of product...
Economic opportunities in the livestock sector
The 4 billion people who live
on less than US$10 a day
(primarily in develo...
Drivers of livestock growth: more, richer
people and urbanization
Population growth
Over 9 billion people
to feed globally...
ILRI Spearheading a
New Way Forward
Significant opportunities for Africa’s livestock sector
Per cent growth in consumption of livestock
products between 1995 and 2005

FAO, 2012
Extraordinarily high increases in demand
for animal-source foods in Africa expected
• By 2050, the meat and milk markets a...
Africa is a net importer of animal-source foods
Africa total meat trade

• Production will not
keep pace with
consumption ...
Future livestock sector
markets and opportunities
• Developing, not developed, countries (Africa significant)
• Starting p...
East Africa is well placed to exploit these opportunities

ILRI Spearheading a
New Way Forward
Regional GDP Gains to 2015 from Growth in
Selected Commodity Sub-Sectors (US$ million)

Source: ASARECA/IFPRI Report #150
More opportunities in milk than in beef and
other meats
Milk
Oilseeds
Cassava
Sorghum_Millet
Vegetable_Fruits
Beef
Maize
B...
But there are still huge production and productivity
gaps: No EA country appears in the big league!
Volume of milk produce...
More opportunities in local & regional markets
Brazil, Argentina and India much more
competitive in the meat trade: They l...
Smallholders who dominate the livestock sector
are often competitive with bigger producers
• At least 80% of East Africa’s...
Aggregate welfare effects of removing trade
barriers

• Non-tariff barriers and transport costs in EAC hinder
effective su...
Research solutions are needed
to transform East Africa’s livestock sector
East African research-based livestock successes:
FEEDS
• 70% of production cost – FEED
• 70% of feed – CROP RESIDUES

• Po...
East African research-based livestock successes:
BREEDS
• Imported ‘improved’genotypes
often unsuccessful in many areas

•...
East African research-based livestock successes:
HEALTH
• Animal health becomes more
important with improved genotypes
• R...
New investments and reforms are needed
to take these successes to scale
Both investments and reforms
needed in Africa’s livestock sector
• Live up to CAADP targets to employ agriculture-led grow...
Examples of private-public synergies
Joint public-private testing of innovations:
• Innovative franchise models are provid...
Acting now, together and coherently,
we can create a competitive and sustainable
livestock sector in East Africa
Africa’s livestock agenda:
A right now opportunity window
• Partnerships − including R&D, investment,
private and public s...
An example of acting together:
Tanzania Dairy Development Forum
Key messages
• Trends show global and Africa’s livestock
industry is growing rapidly
• Significant opportunities exist for...
Thank you
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Creating a livestock sector with global competitor advantages in East Africa

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Presented by Amos Omore at the Agribusiness East Africa Conference, Dar es Salaam, Tanzania, 28-29 January 2014


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Creating a livestock sector with global competitor advantages in East Africa

  1. 1. Creating a livestock sector with global competitor advantages in East Africa Amos Omore International Livestock Research Institute, Dar es Salaam, Tanzania Agribusiness East Africa Conference, 28-29 January, 2014 Serena Hotel, Dar es Salaam, Tanzania
  2. 2. Key messages • Trends show global and Africa’s livestock industry is growing rapidly • Significant opportunities exist for East Africa’s livestock sector • Research solutions are needed to transform the livestock sector • More investments are required to take successes to scale • Acting now, together and coherently, we can create a sustainable livestock sector with global competitor advantages in East Africa
  3. 3. The global & EA’s livestock sector is growing rapidly
  4. 4. Livestock dominate list of highest value commodities: 4 of top 6 globally and 3 of top 6 in Africa Highest value commodities globally: Highest value commodities in Africa: Source: FAOSTAT, 2013
  5. 5. Percentage growth in demand for livestock products: 2000−2030 5 Based on anticipated change in absolute tonnes of product comparing 2000 and 2030 FAO, 2012
  6. 6. Economic opportunities in the livestock sector The 4 billion people who live on less than US$10 a day (primarily in developing countries) represent a food market of about $2.9 trillion per year. (Hammond et al. 2007) • Consumption of meat and milk in developing countries is forecast to increase faster than that for any crop product. (IAASTD 2007) • 17 billion domestic animals • Asset value $1.4 trillion • Employs 1.3 billion people Rosegrant et al. 2009
  7. 7. Drivers of livestock growth: more, richer people and urbanization Population growth Over 9 billion people to feed globally by 2050 Income growth 5 of the 20 fastest-growing economies in the world are in eastern Africa. Urbanization Africa’s current population of 1.1 billion is expected to double, to 2.3 billion, by 2050, and over half will live in urban areas.
  8. 8. ILRI Spearheading a New Way Forward Significant opportunities for Africa’s livestock sector
  9. 9. Per cent growth in consumption of livestock products between 1995 and 2005 FAO, 2012
  10. 10. Extraordinarily high increases in demand for animal-source foods in Africa expected • By 2050, the meat and milk markets are projected to increase 145 and 155%, respectively, over 2005/07 levels. • Over this period, Africa’s increase in volume of meat consumed will be on par with that of the developed world and Latin America. • Gains in the size of Africa’s milk markets will be stronger than in any other region except South Asia. • Annual growth rates in both meat and milk consumption are projected to be higher in Africa than in any other regions, excepting meat in South Asia. • In both volume and value, beef, milk and poultry will provide business opportunities for Africa’s livestock producers, sellers and investors.
  11. 11. Africa is a net importer of animal-source foods Africa total meat trade • Production will not keep pace with consumption growth 2000 1800 1600 Quantity (Tonnes) 1400 1200 Imports 1000 Exports 800 • Africa expected to continue being a net importer of animalsourced foods • Global trade share: 3% 600 400 200 0 1961 1970 1980 1990 2000 2010 • Intra-regional trade (2009): 10% Calculated from FAO data (FAOSTAT, 2013)
  12. 12. Future livestock sector markets and opportunities • Developing, not developed, countries (Africa significant) • Starting point is the smallholder producers • Transforming the sector to meet demand in environmentally sustainable and healthy ways: – Use and take to scale research-based successes in > technology (feeds, breeds, health) to push productivity > markets to pull productivity – New business models
  13. 13. East Africa is well placed to exploit these opportunities ILRI Spearheading a New Way Forward
  14. 14. Regional GDP Gains to 2015 from Growth in Selected Commodity Sub-Sectors (US$ million) Source: ASARECA/IFPRI Report #150
  15. 15. More opportunities in milk than in beef and other meats Milk Oilseeds Cassava Sorghum_Millet Vegetable_Fruits Beef Maize Bananas Coffee_Tea Potatoes_Sweetpotatoes Rice Wheat_Barley Beans_Peas Poultry Sugar 0 100 200 300 400 500 600 The region dominates production Africa’s milk (40%), beef (23%) and mutton (26%) in 2007 Source: ASARECA/IFPRI Report #150
  16. 16. But there are still huge production and productivity gaps: No EA country appears in the big league! Volume of milk produced in 2011(>10 million tonnes) Average production/cow EU-27 Israel India Denmark Netherelands USA Spain China Belgium Brazil EU Italy Russia South Africa New Zealand Russia Turkey China Pakistan Egypt India Argentina Nigeria Ukrain - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,00010,000 11,000 12,000 0 10 20 30 40 50 60 70 80 90 100110120130140150160 Surce: IDF/FIL dairy Situation report, 2012
  17. 17. More opportunities in local & regional markets Brazil, Argentina and India much more competitive in the meat trade: They land beef in importing countries at costs < 50% than the most competitive African countries (Rich, 2009) High perishability, lack of cold chains and poor infrastructure make livestock products uncompetitive in the region High feed costs and seasonality must be overcome to meet high quality standards Market share (%): Informal raw milk markets Uganda Tanzania Kenya 80% Exploit local demand 85% 90% 95% 100%
  18. 18. Smallholders who dominate the livestock sector are often competitive with bigger producers • At least 80% of East Africa’s current livestock production comes from the smallholder sector. • In many cases, East Africa’s smallholder producers can compete well with larger livestock producers. • Smallholders are expected to continue to dominate East Africa’s livestock production for generations to come. • The challenge is how to continue to meet the growing demand for livestock from the smallholder sector, and do so sustainably.
  19. 19. Aggregate welfare effects of removing trade barriers • Non-tariff barriers and transport costs in EAC hinder effective supply response to local & regional demand • Removal of tariffs within EAC doubled dairy trade to 11% in a decade Source: Gelan & Omore (2013)
  20. 20. Research solutions are needed to transform East Africa’s livestock sector
  21. 21. East African research-based livestock successes: FEEDS • 70% of production cost – FEED • 70% of feed – CROP RESIDUES • Potential huge demand for grain for MONOGASTRICS • Opportunities: – Improved crop residue quantity and quality – Improved use of crop residues with other feed resources – Use of sorghum and other alternates to maize for monogastrics
  22. 22. East African research-based livestock successes: BREEDS • Imported ‘improved’genotypes often unsuccessful in many areas • African breeds have huge potential: − Appropriate breeding and selection − Introduction of cross-breds Example • ‘Hairless’ worm-resistant red Maasai sheep are now, in the face of climate change, being restocked by Maasai communities.
  23. 23. East African research-based livestock successes: HEALTH • Animal health becomes more important with improved genotypes • Research solutions for animal diseases: − Vaccines (e.g. East Coast fever) − Diagnostics • In Uganda, where pork consumption is skyrocketing, projects are enhancing the pig value chain and helping the country’s ensure the safety of its pork products.
  24. 24. New investments and reforms are needed to take these successes to scale
  25. 25. Both investments and reforms needed in Africa’s livestock sector • Live up to CAADP targets to employ agriculture-led growth to achieve MDG1 of halving poverty and hunger o Pursue 6% average annual sector growth at national level o Allocate 10% of national budgets to the agriculture sector • Investments as well as policy and institutional reforms that target markets are needed. • These can ensure that the business opportunities generated by the growing demand for animal-sourced foods translate into widespread benefits for the population. • Research, development, investment, businesses and farmers themselves need to be better aligned and connected. • To meet the growing demand, we’re going to have to do things differently.
  26. 26. Examples of private-public synergies Joint public-private testing of innovations: • Innovative franchise models are providing smallholders with access to agro-vets (‘Sidai’ in Kenya) • New low-cost, pen-side diagnostic tools are providing diagnostics for smallholder settings • New mobile phone systems are helping farmers monitor the health and reproduction of their animals (‘iCow’ in Kenya) • Index based livestock insurance is reducing risk for pastoralists using banking, insurance and IT from private sector innovation • ”East Africa Dairy Development (EADD) project is connecting farmers to service providers and new business opportunities through a hub model • R&D partnerships under “Maziwa Zaidi” to adapt ‘hub model’ for marginalized groups in Tanzania
  27. 27. Acting now, together and coherently, we can create a competitive and sustainable livestock sector in East Africa
  28. 28. Africa’s livestock agenda: A right now opportunity window • Partnerships − including R&D, investment, private and public sectors − are essential. • Start with the smallholder producer. • Transform the sector to meet demand in environmentally sustainable and healthy ways. • Use and take to scale research-based successes in: − Technology (feeds, breeds, health) − Markets − New business models If we don’t act soon, importers will.
  29. 29. An example of acting together: Tanzania Dairy Development Forum
  30. 30. Key messages • Trends show global and Africa’s livestock industry is growing rapidly • Significant opportunities exist for East Africa’s livestock sector • Research solutions are needed to transform the livestock sector • More investments are required to take successes to scale • Acting now, together and coherently, we can create a sustainable livestock sector with global competitor advantages in East Africa
  31. 31. Thank you

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