IGIDR-IFPRI -Promoting Livestock for Accelerated and Inclusive Growth, P S Birthal, NCAP

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Indira Gandhi Institute for Development Studies(IGIDR), and the International Food Policy Research Institute (IFPRI) on
‘Harnessing Opportunities to Improve Agri-Food Systems’ on July 24-25 , 2014 in New Delhi.
The two day conference aims to discuss the agricultural priority of the government and develop a road map to realise these priorities for improved agri food systems.

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IGIDR-IFPRI -Promoting Livestock for Accelerated and Inclusive Growth, P S Birthal, NCAP

  1. 1. LIVESTOCK FOR ACCELERATED AND INCLUSIVE GROWTH Pratap S Birthal National Centre for Agricultural Economics and Policy Research, New Delhi IGIDR-IFPRI workshop on ‘Harnessing Opportunities to Improve Agri-Food Systems’ July 24-25, 2014
  2. 2. Background  Target of 4% growth in agriculture  How to accelerate agricultural growth?  Area expansion, price increases, technology, diversification  Can diversification toward animal production accelerate growth?  Smallholders (<2ha):  Size of land holding (0.6ha)  Can such tiny pieces support their livelihood and come out of poverty?  Exit from agriculture or Diversify towards activities that generate more income such as horticulture and animal production?  Will smallholders benefit from livestock- driven growth? 2
  3. 3. How does livestock contribute to agricultural growth and poverty reduction? Food and nutrition Energy in agriculture, fertilizers and domestic fuel Regular cash income Insurance and banking function Equity: Inter- household and intra-household 3
  4. 4. Organization? The way forward to convert challenges into opportunities? Challenges in livestock development? Livestock be an engine of agricultural growth and a pathway out of poverty? Opportunities for livestock sector to grow? 4
  5. 5. Opportunities? Changing food basket: share of animal products in food expenditure increased from 20.3% in 1993-94 to 26.1% in 2011-12 in RURAL, and from 26% to27.5% in URBAN segment Income growth and urbanization By 2020 demand for milk is expected to be 156 Million tons, and of meat and eggs to be 13 Million tons Share of livestock products in agricultural exports increased from 3.7% during 1991-95 to 8.9% in 2005-10. Buffalo meat is the main export product
  6. 6. Exports of Buffalo meatvs BasmatiRice (US$Million) 0 1000 2000 3000 4000 5000 6000 1987-88 1988-89 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Basmati Rice Buffalo Meat
  7. 7. India’s share in globalbovine meatexport (QTY) 0% 5% 10% 15% 20% 25% 30% 35% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Australia Brazil EU 27 India New Zealand US
  8. 8. What turned India largest exporter? International factors: • Appreciation of major exporting countries vis-à-vis exporting countries making exported meat costly. • Reduction in producer subsidy in EU • Mad cow disease in late 1990s in Europe, and in the early 2000s in US • EU restriction on Brazilian imports for safety reasons • India is close to key markets of South East Asia and Middle East ; low shipping cost. Domestic factors • India supply ‘HALAL’ slaughtered meat a desired requirement in Islamic countries. • Low cost of production hence low price • There is no practice of using hormones, antibiotics or any other chemicals for fattening. • Indian buffalo meat is lean and blends well with other value-added products. • Indian buffalo meat is low in fat and cholesterol and is free from radiation. • Disease free (Rinderpest, mad cow disease, program on FMD). Traditional markets: Malaysia, Philippines, UAE, Jordan, Oman, Kuwait, and Iran. New markets: Vietnam, Saudi Arabia, Syria, Thailand, Angola, Algeria, Congo and Egypt. Major destinations now are: Vietnam, Malaysia, Thailand and Egypt..
  9. 9. Indianbuffalomeat pricevis-a-visworldbeef price(US$/t) 0 500 1000 1500 2000 2500 3000 3500 4000 4500 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 India World
  10. 10. Livestock Generates Agricultural Growth (% annual growth) Crops Livestock Fisheries Forestry Agriculture % share in agricultural GDP TE1982-83 72.1 18.8 2.8 6.3 100 TE1992-93 69.2 22.4 3.8 4.6 100 TE2002-03 67.2 24.4 4.5 4.0 100 TE2010-11 65.1 26.5 4.7 3.8 100 % annual growth 1980-81 to 1989-90 2.71 5.3 6.6 -0.05 3.2 1990-91 to 1999-00 2.76 3.9 5.1 1.27 3.0 2000-01 to 2010-11 2.65 3.9 3.4 1.90 3.1 1980-81 to 2010-11 2.76 4.3 5.1 1.10 3.1 10
  11. 11. Average Value of Output of Livestock vis-à- vis Foodgrains , (Rs billion at 2004-05 prices) Livestock Milk Foodgrains Rice Wheat 1980s 870 563 1201 527 311 1990s 1300 883 1539 704 446 2000s 1864 1278 1685 771 510 11
  12. 12. Livestock Cushions Agricultural Growth: Fluctuation in the of Output of Livestock and Crops 12
  13. 13. Inclusiveness: % share of marginal farm households 1981-82 1991-92 2002-03 Rural households 41.2 48.3 48.4 Land 11.7 15.5 24.1 Livestock Cattle 30.0 47.3 53.4 Buffaloes 27.9 35.8 50.3 Small ruminants 38.6 46.2 62.4 Pigs 56.0 49.9 76.8 Poultry 48.8 54.9 63.8 13
  14. 14. Inclusiveness: poverty regressions Dependent variable : Poor=1 otherwise =0 Dependent variable: Log absolute poverty gap Coeff. t-stat Marginal effect Coeff. t-stat Log per capita income -1.272 -45.660 -0.265 -0.319 -15.520 Proportion of income from crops -1.214 -22.480 -0.253 -0.333 -9.400 Proportion of income from livestock -1.726 -20.210 -0.360 -0.448 -6.990 Controls: Education and social group No. of observations 45094 14826 Chi2 3900.12 415.33 14
  15. 15. Livestock and environment • Negative externalities – Over-grazing, deforestation, water pollution – Methane emission from livestock: 12 million t • Positive externalities – Recycling of agricultural byproducts and residues save 40 million ha – Substitution of fuel wood by dung cake saves 1.6 million ha – Use of dung as manure saves 1.2 million t of NPK – Tractors required to substitute 57million draught animals 5.5 million ; saving of diesel : 13.1 million t 15
  16. 16. Concerns?  Deceleration in yield growth of all types of dairy animals: Number-driven growth cannot be sustainable in the long run  There is an yield gap from 40-50%  Breeding: AI 20%, success rate is poor  Feed and fodder scarcity: 11% in dry fodder, 35% in green fodder and 28% in concentrate feed  Decline in common grazing lands in quantity as well as quality  Poor livestock delivery systems despite having more than 50 thousand veterinarians excluding para-vets and 55 thousand institutions
  17. 17. POLICIES FOR SUSTAINABLEGROWTH
  18. 18. Public spending on livestock TE1992-93 TE2000-01 TE2008-09 Total spending (Rs million,2004-05 prices) 37396 41561 47261 % of total agricultural spending 13.6 9.9 4.6 Public spending as % of livestock VOP 3.6 2.8 2.3 Composition of public spending (%) Dairy development 41.5 38.6 25.0 Veterinary services and animal health 23.7 24.1 29.1 Cattle and buffalo development 14.0 11.7 10.5 Sheep and wool development 2.7 2.4 2.0 Piggery development 1.8 0.5 0.4 Poultry development 3.1 2.4 2.4 Fodder development 0.9 1.0 1.0 Direction and administration 4.2 8.7 19.1 Research, education and extension 2.2 3.0 3.0 Others 5.8 7.6 7.5 18
  19. 19. Credit and insurance • Share of livestock in agricultural credit has hardly ever exceeded 5% • Livestock credit is treated as term credit • Only about 30 million bovine heads are insured, of which 25% are insured under IRDP programs • Bias in insurance against low-producing dairy animals
  20. 20. Marketing: Dairy cooperatives 1980-81 1990-91 2010-11 No. of societies 13284 63415 144246 Members, million number 1.75 7.48 14.46 Milk procured, million tonnes 0.94 3.54 9.56 Milk procured, % 2.96 6.57 7.84 20 NDDB
  21. 21. Unbalanced growth of cooperatives % of output procured States Share in total milk procured Share in milk produced Private plants 10-30% Gujarat (31%) Maharashtra (15%) Karnataka (25%) TN (13%), Kerala (12%) 66% 27% Maharshtr a (23%) Karnataka (5%) <7% A P (5%), Rajasthan(6.2%), Bihar (3.5%), M P (2.3%), Orissa, (4.5%) W B (3.1%) 19% 34% Weak Uttar Pradesh (2%), Punjab (3.2%), Haryana (2.5%) 10% 34% Strong (55%) NDDB 21
  22. 22. National Dairy Plan  Genetic enhancement through AI:  Increase number of high genetic merit bulls and import of exotic purebred bulls or equivalent embryos.  Increasing the annual production of high quality semen to 100 million doses to improve AI coverage from 20 per cent to about 35 per cent.  Doorstep AI delivery services  Feed and nutrition:  Awareness about the balanced ration  Improve supply of certified / truthfully labelled fodder seeds.  Conservation of green fodder through silage for use in fodder deficit areas. Marketing  Strengthen existing dairy cooperatives  Promoting Producer Companies. 22
  23. 23. ThankYou

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