View
144
Download
3
Category
Preview:
Citation preview
A Living from LivestockPro-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
A Living from LivestockPro-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
A Living from LivestockPro-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$ 10trillion
US$ 32.000per person
US$ 1.800per person
A Living from LivestockPro-Poor Livestock Policy Initiative
Income & Agricultural Populations
100
Annual per capita income in USD ppp
Proportion of economic population in agriculture (%)
ChinaIndia
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
A Living from LivestockPro-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
A Living from LivestockPro-Poor Livestock Policy Initiative
Heterogeneity Prevails !!
0%
20%
40%
60%
80%
100%
SSA
S Asi
a
EA&P
MEN
A
LAC
Rural Urban
Location of ‘Extreme’ Poor
0
200
400
600
800
1,000
1,200
SSA
S-Asi
a
EA&P
MEN
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
A Living from LivestockPro-Poor Livestock Policy Initiative
Food is the Poor’s Main Concern
50%
of
World P
opula
tion
80%
App. 75% of the Food Insecurelive in rural areas, 50% are
smallholder farmers !!
A Living from LivestockPro-Poor Livestock Policy Initiative
Bottom 3 Quintile Markets
Water ICT Health
Transport Housing Energy
Food
$2.9trillion
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
A Living from LivestockPro-Poor Livestock Policy Initiative
Allocation of One Additional $
0
5
10
15
20
25
30
35
40
45
50
SSA
S Asi
a
EA&P
MEN
A
LAC
EE&C
ACereals Meat&Milk F&Vs Other
USD cents for food groups
A Living from LivestockPro-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.
A Living from LivestockPro-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 >$13
Million
Incomes
0
10
20
30
40
50
60
70
80
90
1994 1996 1998 2000 2002 2004 2006
Rural Urban
Million
Demography
22% 27%
A Living from LivestockPro-Poor Livestock Policy Initiative
Per Capita Consumption of Meats
0
5
10
15
20
25
30
Pork Poultry Beef
1995
2005
kg / capita
Viet Nam, consumption bymeat type
0
10
20
30
40
50
60
70
80
90
Viet Nam China D'ped
kg meat / capita
Viet Nam, meat consumptionvs. China and developed world
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam: Livestock Production
Growth in domestic production has been remarkable:
• Pork 120%
• Poultry 133%
• Beef 25%
• Milk 220%
over a decade!!!0
500
1,000
1,500
2,000
2,500
Pork Poultry Beef Milk
1993-1995
2003-2005
‘000 MT
A Living from LivestockPro-Poor Livestock Policy Initiative
-600
-500
-400
-300
-200
-100
0
100
200
2000 2001 2002 2003 2004 2005 2006 2007
Poultry Meat
Pigmeat
Ovine Meat
Milk
Viet Nam: Livestock Trade Balance
Yet trade balance in livestock products has deteriorated!!!
Million US$
A Living from LivestockPro-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%
A Living from LivestockPro-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.
A Living from LivestockPro-Poor Livestock Policy Initiative
Income Sources in Rural Viet Nam
9%
18%
11%
62%
Agriculture Wages
Self-employm Other
Source: Maltsoglou 2004
A Living from LivestockPro-Poor Livestock Policy Initiative
Livestock Ownership in Viet Nam
0
20
40
60
80
100
Ma
jor
Urb
an
Mid
dle
Urb
an
Sm
all U
rba
n
No
rth
ern
Mo
un
tain
Re
d R
ive
r
De
lta
No
rth
Ce
ntr
al
Co
ast
So
uth
Ce
ntr
al
Co
ast
Ce
ntr
al
Hig
hla
nd
s
So
uth
ea
st
Me
ko
ng
Riv
er
De
lta
% Households Owning Livestock
Source: 1998 VLSS
Urban Rural
A Living from LivestockPro-Poor Livestock Policy Initiative
Livestock Ownership in Viet Nam
0
20
40
60
80
Ma
jor U
rban
Mid
dle
Urb
an
Sm
all U
rba
n
No
rth
ern
Mou
nta
in
Re
d R
ive
r
De
lta
No
rth
Ce
ntr
al
Co
ast
So
uth
Ce
ntr
al
Co
ast
Ce
ntr
al
Hig
hla
nd
s
So
uth
ea
st
Me
ko
ng
Riv
er
De
lta
Ducks/Geese
Chicken
Pigs
Cattle
Herd / Flock Composition
Urban Rural
Source: 1998 VLSS
Nu
mb
ers
A Living from LivestockPro-Poor Livestock Policy Initiative
<1 ha 1 - 2 ha >2 ha
< 1TLU 1 -2 TLU > 2 TLU
Viet Nam’s SmallholdersSource of Livestock Production
by farmsize
by flocksize
96%
40%
30%30%
A Living from LivestockPro-Poor Livestock Policy Initiative
Livestock: The Economic Perspective
• More income from natural resourcesthrough:• 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 labourresources
• Balance seasonal labourdemand 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
A Living from LivestockPro-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. subsistence0
200
400
600
800
1,000
1,200
1,400
1,600
Typ
e 1
Typ
e 2
Typ
e 3
Typ
e 4
Typ
e 5
Other
Wages
Self-empl
Livestock
Crops +
An
nu
al
ho
us
eh
old
in
co
me
in
US
D
35%
10%
17%
33%
6%
Source: Maltsoglou 2004
A Living from LivestockPro-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 2002Percent of respondents
A Living from LivestockPro-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
A Living from LivestockPro-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.
A Living from LivestockPro-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
A Living from LivestockPro-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 Unitper 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)
A Living from LivestockPro-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 ChickenAttributes
Source: Ifft et al., 2008
A Living from LivestockPro-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
A Living from LivestockPro-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
A Living from LivestockPro-Poor Livestock Policy Initiative
Poultry Market Imperfections
High Mortality
Low Input Quality
Low SPS Standards
Low Bargaining
Power
Moral Hazard
Distrust,
Adverse Selection
A Living from LivestockPro-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
A Living from LivestockPro-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.
A Living from LivestockPro-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
Recommended