The Role of Livestock in Sustainable Rural Development, Poverty Reduction, and Food Security
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http://www.fao.org/ag/againfo/home/en/ This website represents a major source of information on livestock sector policies and institutions in developing countries, and contains the outputs produced by the 2001-2010 FAO Pro-Poor Livestock Policy Initiative (PPLPI). Indeed, the importance of policies and institutions in sustaining inclusive and pro-poor growth of the livestock sector cannot be overstated, but for long the value of policies and institutions – and of livestock sector policies and institutions in particular – have been marginally appreciated, which resulted in less-than effective public and private sector investments. © FAO: http://www.fao.org
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The Role of Livestock in Sustainable Rural Development, Poverty Reduction, and Food Security
- 1. A Living from Livestock Pro-Poor Livestock Policy Initiative The Role of Livestock in Sustainable Rural Development, Poverty Reduction, and Food Security International Symposium on ‘Sustainable Land Use and Rural Development in Mountainous Regions of Southeast Asia’ Hanoi, 23 July 2010 J. Otte, D. Roland-Holst & Nguyen Do Anh Tuan
- 2. A Living from Livestock Pro-Poor Livestock Policy Initiative Overview • Context: Global poverty and food insecurity • Viet Nam: Development trends 1996 – 2005 • Rural Viet Nam: Agriculture and livestock • Research and policy implications • Conclusions
- 3. A Living from Livestock Pro-Poor Livestock Policy Initiative The Two ‘Worlds’ 'Developing' 'Developed' Human Population, 2005 1.1 bn 5.5 billion 'Developing' 'Developed' GDP, 2005 US$ 35 trillion US$ 10 trillion US$ 32.000 per person US$ 1.800 per person
- 4. A Living from Livestock Pro-Poor Livestock Policy Initiative Income & Agricultural Populations 100 Annual per capita income in USD ppp Proportion of economic population in agriculture (%) China India 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 0 20 40 60 80 Indust LAC MENA S.Asia EA&P SSA EE&CA
- 5. A Living from Livestock Pro-Poor Livestock Policy Initiative Developing Country Incomes (2005) 1.40 1.16 2.66 0.25 0 1 2 3 4 5 6 Source: Chen & Ravaillon, 2008 Billion people $2-$13 (49%) $1.25-$2 (21%) < $1.25 (26%) US Poverty Line Intl Poverty Line ‘Extreme’ Poverty 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% >$13 $2 - $13 $1.25 - $2 <$1.25 Source: PovNet, 2010 22% 1% 27% 50% Viet Nam Incomes, 2006
- 6. A Living from Livestock Pro-Poor Livestock Policy Initiative Heterogeneity Prevails !! 0% 20% 40% 60% 80% 100% SSA S A sia EA& P M EN A LAC Rural Urban Location of ‘Extreme’ Poor 0 200 400 600 800 1,000 1,200SSA S-A sia EA& P M EN A LAC EE& C A <$1.25 $1.25-$2 $2-$13 >$13 Income Distribution by Region Million people 75% 75% 40% 20% 20% 10% Source: Chen & Ravaillon, 2008
- 7. A Living from Livestock Pro-Poor Livestock Policy Initiative Food is the Poor’s Main Concern 50%ofWorldPopulation 80% App. 75% of the Food Insecure live in rural areas, 50% are smallholder farmers !!
- 8. A Living from Livestock Pro-Poor Livestock Policy Initiative Bottom 3 Quintile Markets Water ICT Health Transport Housing Energy Food $2.9 trillion 1 2 3 Asia & ME Latin America Africa East Europe $2.24 Food Market Size ($ trillion) $0.20 $0.25 $0.21 Source: WRI 2007
- 9. A Living from Livestock Pro-Poor Livestock Policy Initiative Allocation of One Additional $ 0 5 10 15 20 25 30 35 40 45 50 SSA S A sia EA& P M EN A LAC EE& C A Cereals Meat&Milk F&Vs Other USD cents for food groups
- 10. A Living from Livestock Pro-Poor Livestock Policy Initiative Summary 1 • The ‘developing world’ is poorer than we often realize (‘paved road bias’). • Heterogeneity prevails – one size will not fit all (e.g. emerging ‘middle class’ in EA&P). • The poor predominantly live in rural areas and food and agriculture are central to their livelihoods.
- 11. A Living from Livestock Pro-Poor Livestock Policy Initiative Viet Nam: Demography & Incomes 0 10 20 30 40 50 60 70 80 90 1994 1996 1998 2000 2002 2004 2006 <$1.25 $1.25 - $2 $2 - $13 >$13 Million Incomes 0 10 20 30 40 50 60 70 80 90 1994 1996 1998 2000 2002 2004 2006 Rural Urban Million Demography 22% 27%
- 12. A Living from Livestock Pro-Poor Livestock Policy Initiative Per Capita Consumption of Meats 0 5 10 15 20 25 30 Pork Poultry Beef 1995 2005 kg / capita Viet Nam, consumption by meat type 0 10 20 30 40 50 60 70 80 90 Viet Nam China D'ped kg meat / capita Viet Nam, meat consumption vs. China and developed world
- 13. A Living from Livestock Pro-Poor Livestock Policy Initiative Viet Nam: Livestock Production Growth in domestic production has been remarkable: • Pork 120% • Poultry 133% • Beef 25% • Milk 220% over a decade!!!0 500 1,000 1,500 2,000 2,500 Pork Poultry Beef Milk 1993-1995 2003-2005 ‘000 MT
- 14. A Living from Livestock Pro-Poor Livestock Policy Initiative -600 -500 -400 -300 -200 -100 0 100 200 2000 2001 2002 2003 2004 2005 2006 2007 Poultry Meat Pigmeat Ovine Meat Milk Viet Nam: Livestock Trade Balance Yet trade balance in livestock products has deteriorated!!! Million US$
- 15. A Living from Livestock Pro-Poor Livestock Policy Initiative Sources of Domestic Demand Growth for Livestock Products, 1995-2005 • Population growth: 16% • From 73.3M to 85.0M • Per capita demand growth: • Milk = 180% • Poultry meat = 104% • Pork = 97% • Beef = 16%
- 16. A Living from Livestock Pro-Poor Livestock Policy Initiative Summary 2 • Over the past decade, Viet Nam has made terrific economic progress. • With respect to provision of livestock products, Viet Nam is victim of its own success. • Major growth potential in domestic (rather than export) market.
- 17. A Living from Livestock Pro-Poor Livestock Policy Initiative Income Sources in Rural Viet Nam 9% 18% 11% 62% Agriculture Wages Self-employm Other Source: Maltsoglou 2004
- 18. A Living from Livestock Pro-Poor Livestock Policy Initiative Livestock Ownership in Viet Nam 0 20 40 60 80 100 MajorUrban MiddleUrban SmallUrban Northern Mountain RedRiver Delta NorthCentral Coast SouthCentral Coast Central Highlands Southeast MekongRiver Delta % Households Owning Livestock Source: 1998 VLSS Urban Rural
- 19. A Living from Livestock Pro-Poor Livestock Policy Initiative Livestock Ownership in Viet Nam 0 20 40 60 80 MajorUrban MiddleUrban SmallUrban Northern Mountain RedRiver Delta NorthCentral Coast SouthCentral Coast Central Highlands Southeast MekongRiver Delta Ducks/Geese Chicken Pigs Cattle Herd / Flock Composition Urban Rural Source: 1998 VLSS Numbers
- 20. A Living from Livestock Pro-Poor Livestock Policy Initiative <1 ha 1 - 2 ha >2 ha < 1TLU 1 -2 TLU > 2 TLU Viet Nam’s Smallholders Source of Livestock Production by farm size by flock size 96% 40% 30% 30%
- 21. A Living from Livestock Pro-Poor Livestock Policy Initiative Livestock: The Economic Perspective • More income from natural resources through: • Access to common land resources • Utilization of ‘waste land’ not suitable for crops • Utilization of crop by- products • Increase in output of crop production by nutrient cycling (and pest control) • More income from family labour through: • Better use of heterogeneous labour resources • Balance seasonal labour demand for crop farming • Use of labour for processing of primary products (value addition) • Free labour for more productive purposes (draught animals) Diversification and stabilization of household incomes = reduced vulnerability
- 22. A Living from Livestock Pro-Poor Livestock Policy Initiative Rural Household Typology Rural household ‘types’ ‘Diversified’ (<25% ag inc) 1. with market-oriented agriculture 2. with agriculture for home consumption ‘Agriculture’, 3. market-oriented 4. semi-market-oriented 5. subsistence 0 200 400 600 800 1,000 1,200 1,400 1,600 Type1 Type2 Type3 Type4 Type5 Other Wages Self-empl Livestock Crops + AnnualhouseholdincomeinUSD 35% 10% 17% 33% 6% Source: Maltsoglou 2004
- 23. A Living from Livestock Pro-Poor Livestock Policy Initiative Spatial Heterogeneity 1 2 3 4 5
- 24. A Living from Livestock Pro-Poor Livestock Policy Initiative Reasons for Improved Standard of Living 0 10 20 30 40 50 60 70 More income from wages More income from fisheries More enterprise income More income from forestry Higher cropping intensity More farm land More profitable crops More income from livestock Higher crop yields Source: IFPRI 2002 Percent of respondents
- 25. A Living from Livestock Pro-Poor Livestock Policy Initiative Viet Nam Household Multipliers 0.0 0.5 1.0 1.5 2.0 2.5 Services Manuf. Textiles Crops Fr & Veg Lstk Proc Lstk Primary
- 26. A Living from Livestock Pro-Poor Livestock Policy Initiative Summary 3 • Most rural households in Viet Nam keep livestock and livestock play a complex role in the rural economy. • Smallholders are the backbone of Viet Nam’s livestock sector. • Livestock development potentially has large primary and secondary household income effects.
- 27. A Living from Livestock Pro-Poor Livestock Policy Initiative Research & Policy Implications Ways to help poor farmers: 1. Increase output – demand and productivity promotion 2. Increase price – value creation and quality 3. Reduce costs – market access, information
- 28. A Living from Livestock Pro-Poor Livestock Policy Initiative Scope for Productivity Increase 0 25 50 75 100 125 150 175 200 Type 1 Type 2 Type 3 Type 4 Type 5 Viet Nam: USD/Livestock Unit per year Agricultural households • Type 3: Commercial (17% of rural households) • Type 4: Semi- commercial (33% of rural households) • Type 5: Subsistence (6% of rural house- holds)
- 29. A Living from Livestock Pro-Poor Livestock Policy Initiative Ha Noi Consumer Preferences 0 10 20 30 40 50 60 70 80 Local Chicken Crossbred Chicken Industrial Chicken Regular Price High Price Price by Chicken Type (VND ‘000) 0 1 2 3 4 5 Price Taste Disease risk Regular Supply Ranking of Chicken Attributes Source: Ifft et al., 2008
- 30. A Living from Livestock Pro-Poor Livestock Policy Initiative Willingness to Pay for Safety 52%69%74%93%Industrial 66%70%87%92%Cross Bred 74%89%91%99%Local 12,500 VND 10,000 VND 5,700 VND 5,000 VND TYPE Approximately 10% of current price Source: Ifft et al., 2008
- 31. A Living from Livestock Pro-Poor Livestock Policy Initiative Market Access Physical Market Access
- 32. A Living from Livestock Pro-Poor Livestock Policy Initiative North Viet Nam Poultry Flows Poultry Farmers Itinerant Village Traders (farmgate) Retailers Wholesalers Local/Community Market Neighbors/Villagers (farmgate) 47% 15%38% (64%) CONSUMERS (18%)(18%) 73% 27% (19%) (54%) (27%) Other intermediaries 93% 7% Source: Tung & Costales 2007
- 33. A Living from Livestock Pro-Poor Livestock Policy Initiative Poultry Market Imperfections High Mortality Low Input Quality Low SPS Standards Low Bargaining Power Moral Hazard Distrust, Adverse Selection
- 34. A Living from Livestock Pro-Poor Livestock Policy Initiative Summary 4 • Significant scope for productivity increase in most smallholder households. • Urban households exhibit high willingness to pay for local, traditionally raised poultry / livestock varieties and safety certification. • Market participation by smallholders is plagued by high access costs and information failures
- 35. A Living from Livestock Pro-Poor Livestock Policy Initiative Conclusions 1 • Because of its high value (-added) livestock can make a substantial contribution to poverty reduction and economic growth. • Heterogeneity prevails and ‘pro-poor’ livestock development policies need careful targeting. • In a dynamic export-oriented economy, an essential way to promote rural livelihoods is by improving the terms of domestic urban market access for small farmers.
- 36. A Living from Livestock Pro-Poor Livestock Policy Initiative Conclusions 2 • Governments need to realize that smallholders are resource efficient and resilient, and that they currently constitute the backbone of the agriculture sector (rather than regarding them as ‘unproductive and backward’) • Policy suggestion: twin-track approach to livestock sector development: • support ‘industrial’ sector for volume & import substitution • support ‘smallholder’ sector for value, resource use optimization, & rural development / poverty alleviation
- 37. A Living from Livestock Pro-Poor Livestock Policy Initiative