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Global Poverty and Food Security
   challenges: the Equity pillar


           Discussion notes from a brainstorming by
Tom Randolph, Shirley Tarawali, Steve Staal, Nancy Johnson, Mario
            Herrero, Jemimah Njuki and Carlos Sere


 ILRI-World Bank High Level Consultation on the Global Livestock
                        Agenda by 2020

                    Nairobi, 12 - 13 March 2012
Presentation Outline
     Objective: Consider mega-trajectories and their
     implications for the equity dimensions of our strategies

1.   What is changing

2.   Implications for the role of livestock in addressing
     poverty and food insecurity

3.   Implications for equity-driven investment in livestock
     R&D
What is changing?
   Familiar drivers of growing demand for animal-
    source food
      Population growth
      Urbanization, changing diets
      Increasing incomes
   Familiar pressures on growth of supply
        Land constraints, land grabs
        Competition for feed production (food, biofuel)
        Lagging productivity growth
        Concerns about livestock ‘bads’
   Potential for exacerbating food insecurity
      Larger fluctuations in supplies, prices
      Reversal of long-term price decline?
Potential shapers
   The rise of food-based nutritional strategies
      Limitations of single nutrient approaches (the next
       binding constraint hiding behind the current one)
      Growing recognition of strategic nature of animal
       source foods
   Recognition of environmental benefits of
    intensification in smallholder systems (Rio 20+)
   Concerns of the well-fed dictating the options for
    the underfed and constraining investment in
    livestock development
   Dynamism and deepening of private sector
    activity
   Opportunities offered by domestic/regional vs
    international markets
Smallholder trajectories?
    Will it be:

   Leap to larger-scale production and
    supermarketization quickly washing away
    smallholders everywhere
      Brazil model, land grabs
      Policy bias, concern for biosecurity
      Private sector takeover

    OR will it be:
   Longer-term transitions for much of the
    smallholder sector
      Size of smallholder sector as hidden reality
      Labor:capital cost ratios continue to favour
       smallholders
Dairy farm trends

   No evidence of consolidation…

   Numbers of dairy farms in developing countries
    continue to grow: annual increases of 0.5-10%
    in most developing countries

   No measurable increase in dairy herd size in
    developing countries


                              (2000-2005: IFCN)
Smallholders supply over half,
  even for monogastrics




                   Source: ILRI estimates
Transition can still be slow --
example of pork in Vietnam
Share of large-scale modern sector in pig production
                                                       14%

                                                                                                              Base simulation
                                                       12%
                                                                                                              High income growth
                                                       10%
                                                                                                              High tech growth in modern
                                                                                                              sector
                                                       8%
                                                                                                              No tech growth in traditional

                                                       6%                                                     No tech growth in maize


                                                       4%                                                     High income elasticity of
                                                                                                              modern
                                                                                                              High income elast and tech
                                                       2%                                                     growth in modern
                                                                                                              Worst case for traditional
                                                       0%                                                     sector
                                                             0   1   2   3   4    5     6   7   8   9   10
                                                                                 Year                   Source: Minot et al. 2010I
Smallholder trajectories?
    Tentative conclusion:
   A large portion of developing country production
    of animal source foods comes from smallholder
    systems and will continue to do so in much of
    Africa and South Asia

   There is and will continue to be considerable
    variation across specific situations and countries
    in the transition to larger-scale commercial
    systems

   But this view is certainly not shared by all and
    needs more evidence!

   What are the other views?
Part 2
     Implications for the role of livestock in
     addressing poverty and food insecurity
     Consider two main scenarios:

1.   Acknowledge continued major role of the
     smallholder sector and enhance its potential as
     a transition
      support commercialization of smallholder/
         informal sector

2.   Assume smallholder sector cannot compete
      promote livestock as an adaptation or exit
        strategy for rural systems undergoing rapid
        structural change
Support commercialization of
            smallholder/informal sector
   Focusing on smallholder-based value chains
    offers win-win-wins
     Sheer size for impact
     Addressing large productivity gaps could strengthen
      inherent competitiveness
     Improves local availability and accessibility of strategic
      animal-source foods
     Promotes broad-based employment and growth,
      reducing social disruption during transition
     Intensification can reduce environmental impacts
     More natural transition to specialisation, larger-scale
      production, formal-sector food systems
   But need to understand potential trade-offs
     Supply response capacity
     Cost of providing public services to support
Livestock for livelihoods and adaptation

   Where small-scale systems cannot compete, focus
    on livestock as a social protection strategy
     Provides asset instrument
     As backyard, part-time activity, can bolster household
      food security during exit process
     Special role in pastoral and politically sensitive hotspots

     less emphasis on productivity-enhancing
    technologies driven by market incentives, but more
    on protecting assets in low-input systems
     Relies largely on public investment
     Requires coordination across sectors, bundling with other
      types of interventions
     Landscape approaches offer useful framework for
      analysis
Is it one or the other?
   Livestock for economic empowerment or for
    household economics?

   Will be a mix, depending on the context, product

   But within a given context, the main objective and
    associated strategy should be clear

   Better evidence will be needed to argue for a
    stronger focus on the smallholder/informal sector
    vs larger-scale commercial agriculture

   Do we have this right: are these the two main
    strategies for using livestock for poverty reduction?
Part 3
    Implications for equity-driven investment
                in livestock R&D
    Better targeting for smallholder commercial
     development versus social protection
       More focus on what is needed to get producers and
        value chain actors over the threshold into more efficient
        market orientation
       More clarity on the social protection objective

    More focus on appropriate gender (or other target
     group) strategies tailored to each approach

    Clear role for research, including generating data
     to know which is appropriate and where
Involving the right partners

   Further supports strategic role of private sector,
    but also NGO/CBOs
     Shift from farming systems to business solutions
     Not just technology uptake, but also stimulating micro-
      small-medium enterprise business development


   Requires getting public policies right and the
    appropriate public investments funded to attract
    private investment
     Not just livestock --- also pro-poor infrastructure
      development
     Need to work with stakeholders to generate the
      appropriate livestock data
Aligned with current trends?

Growing smallholder/informal livestock
commodity value chains:
  Increasing emphasis on value chain R&D, but often as
   only one component of integrated interventions
  But continued bias towards large-scale, ‘modern’
   formal-sector models
  How to ensure investments are truly inclusive and pro-
   poor? Bottom of the pyramid, or one step up, e.g.
   target successful farmers, entrepreneurs?

Livestock for social protection:
  Interest in livestock insurance schemes
  Mitigating environmental impacts, loss of AnGR, poor
   biosecurity
For discussion

   Is it useful to view the use of livestock for
    poverty reduction as falling into these two basic
    categories? What others need to be
    considered? (e.g. trading out of poverty)
   If ‘growing smallholder value chains’ is an
    appropriate paradigm, what is needed to align
    investments and policies better? Is a better
    business case needed?
   Would this argue for a ‘pathways out of poverty’
    2.0 that highlights the two strategies?

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Global poverty and food security challenges: The equity pillar

  • 1. Global Poverty and Food Security challenges: the Equity pillar Discussion notes from a brainstorming by Tom Randolph, Shirley Tarawali, Steve Staal, Nancy Johnson, Mario Herrero, Jemimah Njuki and Carlos Sere ILRI-World Bank High Level Consultation on the Global Livestock Agenda by 2020 Nairobi, 12 - 13 March 2012
  • 2. Presentation Outline Objective: Consider mega-trajectories and their implications for the equity dimensions of our strategies 1. What is changing 2. Implications for the role of livestock in addressing poverty and food insecurity 3. Implications for equity-driven investment in livestock R&D
  • 3. What is changing?  Familiar drivers of growing demand for animal- source food  Population growth  Urbanization, changing diets  Increasing incomes  Familiar pressures on growth of supply  Land constraints, land grabs  Competition for feed production (food, biofuel)  Lagging productivity growth  Concerns about livestock ‘bads’  Potential for exacerbating food insecurity  Larger fluctuations in supplies, prices  Reversal of long-term price decline?
  • 4. Potential shapers  The rise of food-based nutritional strategies  Limitations of single nutrient approaches (the next binding constraint hiding behind the current one)  Growing recognition of strategic nature of animal source foods  Recognition of environmental benefits of intensification in smallholder systems (Rio 20+)  Concerns of the well-fed dictating the options for the underfed and constraining investment in livestock development  Dynamism and deepening of private sector activity  Opportunities offered by domestic/regional vs international markets
  • 5. Smallholder trajectories? Will it be:  Leap to larger-scale production and supermarketization quickly washing away smallholders everywhere  Brazil model, land grabs  Policy bias, concern for biosecurity  Private sector takeover OR will it be:  Longer-term transitions for much of the smallholder sector  Size of smallholder sector as hidden reality  Labor:capital cost ratios continue to favour smallholders
  • 6. Dairy farm trends  No evidence of consolidation…  Numbers of dairy farms in developing countries continue to grow: annual increases of 0.5-10% in most developing countries  No measurable increase in dairy herd size in developing countries (2000-2005: IFCN)
  • 7. Smallholders supply over half, even for monogastrics Source: ILRI estimates
  • 8. Transition can still be slow -- example of pork in Vietnam Share of large-scale modern sector in pig production 14% Base simulation 12% High income growth 10% High tech growth in modern sector 8% No tech growth in traditional 6% No tech growth in maize 4% High income elasticity of modern High income elast and tech 2% growth in modern Worst case for traditional 0% sector 0 1 2 3 4 5 6 7 8 9 10 Year Source: Minot et al. 2010I
  • 9. Smallholder trajectories? Tentative conclusion:  A large portion of developing country production of animal source foods comes from smallholder systems and will continue to do so in much of Africa and South Asia  There is and will continue to be considerable variation across specific situations and countries in the transition to larger-scale commercial systems  But this view is certainly not shared by all and needs more evidence!  What are the other views?
  • 10. Part 2 Implications for the role of livestock in addressing poverty and food insecurity Consider two main scenarios: 1. Acknowledge continued major role of the smallholder sector and enhance its potential as a transition  support commercialization of smallholder/ informal sector 2. Assume smallholder sector cannot compete  promote livestock as an adaptation or exit strategy for rural systems undergoing rapid structural change
  • 11. Support commercialization of smallholder/informal sector  Focusing on smallholder-based value chains offers win-win-wins  Sheer size for impact  Addressing large productivity gaps could strengthen inherent competitiveness  Improves local availability and accessibility of strategic animal-source foods  Promotes broad-based employment and growth, reducing social disruption during transition  Intensification can reduce environmental impacts  More natural transition to specialisation, larger-scale production, formal-sector food systems  But need to understand potential trade-offs  Supply response capacity  Cost of providing public services to support
  • 12. Livestock for livelihoods and adaptation  Where small-scale systems cannot compete, focus on livestock as a social protection strategy  Provides asset instrument  As backyard, part-time activity, can bolster household food security during exit process  Special role in pastoral and politically sensitive hotspots  less emphasis on productivity-enhancing technologies driven by market incentives, but more on protecting assets in low-input systems  Relies largely on public investment  Requires coordination across sectors, bundling with other types of interventions  Landscape approaches offer useful framework for analysis
  • 13. Is it one or the other?  Livestock for economic empowerment or for household economics?  Will be a mix, depending on the context, product  But within a given context, the main objective and associated strategy should be clear  Better evidence will be needed to argue for a stronger focus on the smallholder/informal sector vs larger-scale commercial agriculture  Do we have this right: are these the two main strategies for using livestock for poverty reduction?
  • 14. Part 3 Implications for equity-driven investment in livestock R&D  Better targeting for smallholder commercial development versus social protection  More focus on what is needed to get producers and value chain actors over the threshold into more efficient market orientation  More clarity on the social protection objective  More focus on appropriate gender (or other target group) strategies tailored to each approach  Clear role for research, including generating data to know which is appropriate and where
  • 15. Involving the right partners  Further supports strategic role of private sector, but also NGO/CBOs  Shift from farming systems to business solutions  Not just technology uptake, but also stimulating micro- small-medium enterprise business development  Requires getting public policies right and the appropriate public investments funded to attract private investment  Not just livestock --- also pro-poor infrastructure development  Need to work with stakeholders to generate the appropriate livestock data
  • 16. Aligned with current trends? Growing smallholder/informal livestock commodity value chains:  Increasing emphasis on value chain R&D, but often as only one component of integrated interventions  But continued bias towards large-scale, ‘modern’ formal-sector models  How to ensure investments are truly inclusive and pro- poor? Bottom of the pyramid, or one step up, e.g. target successful farmers, entrepreneurs? Livestock for social protection:  Interest in livestock insurance schemes  Mitigating environmental impacts, loss of AnGR, poor biosecurity
  • 17. For discussion  Is it useful to view the use of livestock for poverty reduction as falling into these two basic categories? What others need to be considered? (e.g. trading out of poverty)  If ‘growing smallholder value chains’ is an appropriate paradigm, what is needed to align investments and policies better? Is a better business case needed?  Would this argue for a ‘pathways out of poverty’ 2.0 that highlights the two strategies?