The developing world’s
smallholder livestock sector
Board of the International Federation for Animal Health,
Brussels, 25 April 2013
Jimmy Smith

The global livestock sector
 Total animals:
17 billion
 Asset value:
$1.4 trillion
 Employs:
1.3 billion people
 Uses:
1/3 of the earth’s
ice-free surface

0
50,000
100,000
150,000
200,000
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Milliontons
Developing
Developed
Where is the growth?
Gains in meat consumption in developing countries
is outpacing that of developed countries and this is expected to continue

Four of the five highest value global
agricultural commodities are livestock products
4
Source: FAOSTAT, 2010 data

Growing Incomes are a key catalyst to demand growth
for livestock products
0
20
40
60
80
100
120
140
0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000
Percapitameatconsumpion(kg/year)
Per capita GDP (US$ PPP)
US
Japan
Chi
Ind
Bra
Rule of thumb:
Growth in demand for
Animal source foods
begins to levels off
when incomes
exceed $10,000.

Percentage increase in demand
for livestock products
0
20
40
60
80
100
120
Developing Countries Developed Countries
Meat
Milk
Eggs
2000 to 2040
IFPRI-ILRI IMPACT model results
Far higher growth in demand will occur in developing countries

Global food production: From where?
Herreret al. 2009
Developing-country
mixed crop-livestock
systems, predominantly
smallholders, supply the
large proportion of
livestock products

By 2040, 70% of global beef and milk will be produced
in developing countries by smallholders in transition
40
45
50
55
60
65
70
75
80
85
90
2000 2040
Beef
Pork
Lamb
Poultry Meat
Eggs
Milk
IFPRI-ILRI IMPACT model results
%

Source: (Steinfeld et al. 2006)
Large productivity gaps between rich
and poor countries are not closing
Some developing country regions have gaps of up to 430% in milk
411
1021
517
4226
397
1380
904
6350
Africa Latin America South Asia Industrialized
Countries
Milk
(kg/cow/yr)
1980 2005

Animal disease remains a key constraint
Young Adult
Cattle 22% 6%
Shoat 28% 11%
Poultry >50% 30%
Source: Otte & Chilonda; IAEA
Annual mortality of African livestock
Around half due to preventable or curable diseases

0
1
2
3
4
5
6
7
8
Billion$lostyearly
South Asia
Africa
Annual losses from selected diseases –
Africa and South Asia
Estimates from BMGF
Africa
South Asia

Modeling gains from dairy technology interventions -
Value of change in milk yield and herd growth
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
Genetics Feed Animal
Health
Herd
Mgmt
Percentincreaseduetointervention
Reducing disease can increase milk yields up to 350% -
greater than improving feed, genetics or management
Source: ILRI 2010

Smallholder livestock keepers
are competitive
1. East African dairy
 In Kenya, 1 million smallholders keep the largest dairy herd in Africa
(larger than South Africa)
 The lowest-cost milk producers globally are found in Uganda
 Small-scale Kenyan dairy producers get above-normal profits of 19-28%
in addition to non-market benefits (finance, insurance, manure,
traction) of a further 16-21% (source: SDP-ILRI, 2005)
 Small- and large-scale poultry and dairy producers in Kenya have the
same levels of efficiency and profits (source: Omiti et al., 2004)

2. Vietnam pig industry
 95% of production is by producers
with fewer than 100 animals
 Pig producers with 1-2 sows have
lower unit costs than those with more
than 4 sows (ILRI 2010)
 Models show industrial pig production
could grow to meet no more than 12%
of national supply in the next 10 years
 Smallholders will continue to provide
most of the country’s pork for years to
come
Smallholder livestock keepers
are competitive (cont.)

Key points related to
smallholder competitiveness
 Smallholders will continue to supply most of the
livestock products in most developing countries
 There will be different trajectories of livestock growth,
with strongest dynamics in Asia
 In many regions,
smallholders will increasingly
commercialize their
operations
 Demand for
animal health
inputs will increase
16

Increasing opportunities for
animal health inputs
17
As smallholder producers in the developing world
continue to commercialize, they increasingly pay
to reduce their animal disease burdens.

Potential 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)
 Enlightened self interest for poor and rich alike:
Research on some disease of the South (e.g., African swine fever) can reduce
threats of those diseases moving to the North
due to climate change and increased trade

Challenges for private-public partnerships
Different animal health models and trading systems:
− Need to understand demand for inputs and then test product
applications
− Need innovative, low-cost products that meet smallholder
needs
− Need new delivery systems that match smallholder settings
and infrastructure
--Risk based rather than hazard based food safety regulations
--Commodity based trade

Key messages
 Demand for livestock source foods is growing faster in
the in the developing than the developed world
 Smallholder producers are now and will continue to be a
large part of the supply response for decades to come
 Animal health constraints are binding in developing
countries
 As smallholder systems modernize, their need for
animal health and other inputs will grow
 New opportunities exist for synergies between private
and public investments in animal health

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