Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
A Living from LivestockPro-Poor Livestock Policy Initiative
PPLPI Steering Committee MeetingFAO Headquarters, Rome27-28 June 2006
David Roland-HolstJoachim Otte &
Saule Kazybayeva
Modelling the Poverty Modelling the Poverty Impacts of Livestock Policy Impacts of Livestock Policy Change: Evidence from Change: Evidence from Vietnam and SenegalVietnam and Senegal
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva2
Contents
1. Introduction2. Livestock and Rural Poor Livelihoods3. Smallholders and Food Supply4. HPAI – Challenge and Opportunity from a
Major Animal Disease Risk5. Conclusions
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva3
Introduction
• Livestock’s potential to improve livelihoods of the rural poor depends on complex economic linkages and behavior.
• In recognition of this, a special research component of PPLPI is dedicated to elucidating the economic fundamentals of smallholder livestock production.
• The goal of this work is support more effective pro-poor policies at all levels.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva4
Integrated Poverty Assessment for Livestock Policy (IPALP) - Schematic Overview
CountryCountry
MethodMethod
FocusFocus
MacroMacro
MesoMeso
MicroMicro Data D
evelopment
Data D
evelopment
Static
Analysis
Static
Analysis
Policy S
imulatio
n
Policy S
imulatio
n
VietnamVietnam
SenegalSenegalPeruPeru
For each country, a toolkit and training module can be produced for capacity development.......
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva5
2. Livestock and Rural Poor Livelihoods
• With the benefit of improved sector data and detailed microeconomic surveys, we are seeing again and again the importance of livestock to smallholder livelihoods.
• The challenge before us is to translate livestock dependence into a sustained source of income growth.
• In most of the cases examined so far, improving the terms for smallholder participation in food markets offers the best means of doing this.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva6
West Africa: National Livestock Dependence
Averages(27.5%, 28%)
Source: Cheik Ly, 2006OECD
GuineaLiberia
Ivory Coast
Mauritaina
Cape Verde
Mali
NigerBurkina
SenegalGuinea-BissauGambia
Sierra Leone
GhanaBenin
Togo
Nigeria
0
20
40
60
80
100
0 20 40 60 80 100 Livestock in Total GDP, 2000 (percent)
Liv
esto
ck in
Tot
al G
DP, 1
990
(per
cent
)
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva7
Senegal: Poverty Headcounts
0
10
20
30
40
50
60
70
80
90
Kolda
Dakar
Ziguinch
orDiourb
elSan
t-Louis
Tamba
counda
Kaolac
k
Thies
Louga
Fatick
Nationa
l
LDI
Pov
erty
Hea
dcou
nt P
erce
nt
$1/day National Poverty Line
NationalAverages
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva8
Vietnam: Poultry Income
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
.00 .20 .40 .60 .80 1.00
Cumulative Population Share
Cum
ulat
ive
Inco
me
and
Poul
try
Rev
enue
Total IncomePoultry IncomeEquality
Poultry incomeis far more equitablydistributed thantotal income !
Sample of 600/65,000 representative households, rural and urban income quintiles for each of 60 provinces. (VHLSS:2002)
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva9
Vietnam: Pig Income
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
.00 .20 .40 .60 .80 1.00
Cumulative Population Share
Cum
ulat
ive
Inco
me
and
Pig
Rev
enue
Total IncomePig IncomeEquality
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva10
Microeconomic Fundamentals
There are three ways to improve the balance sheets of farmers:
1. Increase output 3. Reduce Cost2. Increase price
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva11
Vietnam: Generic Livestock PromotionAll Livestock
0
5
10
15
20
25
30
35
40
45
50
0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000
Household Income per Capita
Perc
ent C
hang
e in
Hou
seho
ld In
com
e
← Poorer Richer →
All Livestock: Simulated 7% annual productivity growth 2005-2015
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva12
3. Smallholders and the Food Supply
• In most developing countries, the majority of rural income arises from marketing food products.
• Livestock’s contribution to this income depends on complex market supply chains extending from the farm gate to urban and even foreign households.
• Our research on these linkages indicates that the terms of this market participation are far from achieving their potential to help the rural poor.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva13
Wages9%
Self-employment
18%
Other11%
Marketed Agriculture
62%
Vietnam: Rural Income Sources
Source: 2002 VLSS
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva14
Linkage Analysis with SAMs
• Multiplier analysis with Social Accounting Matrices (SAMs) offers a convenient way to examine livestock’s linkages across the economy.
• To date, we have developed five SAMs for Vietnam and three for Senegal, working with different aggregations to look at a variety of income-expenditure linkages.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva15
Multiplier Linkages to HouseholdsVietnam (Vn) and Senegal (Sn) Compared
Because of their more diverse linkages to the economy, higher income groups generally enjoy larger multiplier effects.
VnPoultryVnPigVnCattleVnOthLvstkSnLvstk
0
5
10
15
20
25
30
35
40
HRur01 HRur02 HRur03 HRur04 HRur05 HUrb01 HUrb02 HUrb03 HUrb04 HUrb05
Hou
sedh
old
Inco
me
Mul
tiplie
rsPe
rcen
t of V
alue
from
New
Liv
esto
ck D
eman
d
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva16
0
5
10
15
20
25
30
35
40
HRur01 HRur02 HRur03 HRur04 HRur05 HUrb01 HUrb02 HUrb03 HUrb04 HUrb05
Rel
ativ
e an
d Ab
solu
te In
com
e E
ffect
s (p
erce
nt)
Relative Absolute
but livestock income is more important to Senegal’s rural poor.
More livestock income goes to higher income groups,
Senegal: Income Effects from Livestock
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva17
Policy Simulation
• Using simulation models, we can assess a wide variety of policies ex ante.
• Because we develop these models with consistent macro-micro datasets, we can evaluate economywide linkages and detailed incidence such as poverty alleviation.
• Here we look at two generic kinds of scenarios:• Policies targeted to improve livestock production• Policies to improve market access
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva18
Simulations of Producer Support and Trade Liberalization: Senegal
-5
0
5
10
15
20
25
30
35
40
45
HRur01 HRur02 HRur03 HRur04 HRur05 HUrb01 HUrb02 HUrb03 HUrb04 HUrb05
Per
cent
Cha
nge
in A
nnua
l Inc
ome
Higher income groups capture most of the gains from generalist policies.
Three Generic Scenarios:
Prod – Doubling of livestock productivity
KSub – 20% capital subsidy to livestock sector
TLib – Unilateral trade liberalization
Pro-poor policies need targeting.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva19
4. HPAI – Challenge and Opportunity from a Major Animal Disease Risk
• Pathogens associated with livestock pose a challenge to public health and economic security at the national and global levels.
• A dramatic recent example of this is Highly Pathogenic Avian Influenza, which has potentially momentous consequences for human society.
• Smallholder livestock producers can be seriously threatened by conventional measures to fight diseases like this.
• On the contrary, we believe disease risk management can be an opportunity to improve their circumstances.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva20
Risk Management from a Development Perspective
• HPAI presents an unusual opportunity for international cooperation because poor rural households can contribute the global commons of disease prevention.
• Their participation in this effort is unlikely to be voluntary, and indeed should be rewarded if success is to be achieved.
• To make such policies effective, economic analysis of incentives and localized design and implementation are needed.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva21
Percent5
101520253035404550556065707580859095
100
HH Farm Ent. Farm Poultry Ind. Food Process
ExportU
rban HH
Rural H
H
Production Processing Distribution Demand
What Can go Wrong: Resource Flows in the Poultry Sector
Thailand VietnamPercent
5101520253035404550556065707580859095
100
Urb H
HR
ural HH
Production Processing Distribution Demand
Control Points
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva22
Control and Displacement
Percent5
101520253035404550556065707580859095
100
Production Processing Distribution Demand
Urb H
HR
ural HH
Percent5
101520253035404550556065707580859095
100
HH Farm Ent. Farm Poultry Ind. Food Process
Production Processing Distribution Demand
ExportU
rban HH
Rural H
H
There are significant risks that control strategies could permanently displace small producers. This could adversely impact local food security, poverty, and inequality.
Thailand Vietnam
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva23
Vietnam:Household Income Effects of a 50% Cull
-35
-30
-25
-20
-15
-10
-5
0
5
.00 .10 .20 .30 .40 .50 .60 .70 .80 .90 1.00
Cumulative Share of National Income
Perc
ent C
hang
e in
Hou
seho
ld In
com
e
Poorer Richer
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva24
Reducing HPAI Risks while Safeguarding Livelihoods• If policy makers want to reduce HPAI risks to
animal and human populations, without undue adverse effects on the poor, they need cost-effective means to identify local outbreaks and contain them.
• The information needed to accomplish this exists, but it has until now been very difficult to obtain and implement.
• Evidence suggests that local communities are well aware of infection patterns, but reporting processes are plagued by inefficiency and incentive problems.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva25
Socially Effective Risk Management
Recognizing economic realities in livestock production and livelihoods, we propose a three part program to manage animal disease risk:
• Surveillance• Control• Traceability
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva26
SurveillanceWe are beginning research to examine alternative
policy designs that facilitate early detection of outbreaks.
• Effective surveillance combines • incentives for collective responsibility and self-reporting• takes account of resource constraints of different
communitiesto develop mechanisms that • reduce health risk • protect economic survival of the producers.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva27
Control• Cost effective decentralization of control capacity
is essential to the long-term success of disease management.
• In the HPAI epicenter countries, this will require new command and incentive relationships between district and provincial authorities, the central government, and outside stakeholders (NGOs, aid agencies, etc.).
• Regional participation and coordination are necessary for sustained risk reduction.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva28
TraceabilityDefined:• An important class of strategies are
mechanisms to trace the movement of agricultural products through the food supply chain.
• Traceability has value for government, consumers, and producers, reducing health risk while increasing the effectiveness of demand targeting and raising value-added by origin.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva29
Traceability: Advantages for Stakeholders
Government - Testing moves downstream to reduce search costs (funneling), from extensive to intensive screening, reducing scope of surveillance systems.
• Accountability: Increased risk for noncompliance.• Rapid Identification: Reduced scope and time for disease
incubation, lowering mutagenic risk.• Lower Control Cost: More effectively targeted culling.Consumers• Food and disease risk reduction• Quality improvement• Product differentiation
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva30
Traceability: Producer Advantages
• Market access/value chain participation• Technology transfer• Extension services • Network externalities (CE, marketing
boards, producer coops)
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva31
Traceability: Producer Behavior
Incentive Effects:• Certification/branding and quality incentives (e.g.
French AOC wine, coffee)• Brands are collateralizable assets• Bargaining power Program Implications:• Voluntary participation for value chain entry• Experiment with membership fees to finance SPS
infrastructure
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva32
Market Flow: Resources and IncomeSupply Chain – Resource Flow
Incentives:Quality
Technology Transfer
Behavior:Market ParticipationRisk Management
Producers
Value Chain – Income Flow
Consumers
Distributors
Processors
Distributors
Retailers
Traceability
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva33
.0
.5
1.0
1.5
Unla
bele
d
Labe
led
Unla
bele
d
Labe
led
Unla
bele
d
Labe
led
Unla
bele
d
Labe
led
Unla
bele
d
Labe
led
Farmer Distributor Processor Distributor Retailer
Poul
try V
alue
Poultry Value Chain
Initial Price
Upgrade Price
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva34
5. Conclusions• Livestock can make a substantial
contribution to poverty reduction, but pro-poor policies need targeting
• Effective, market oriented livestock promotion has significant potential to• Increase output quantity, quality, and prices• Reduce cost with improved distribution
technology
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva35
Conclusions - HPAI• Policies toward HPAI and other significant animal
diseases in developing countries necessarily implicate the rural poor majority.
• These people need to be recognized as part of the solution to reducing disease risk, not the problem.
• Despite the global momentum for rapid and intensive measures to control poultry stocks and restructure management practices, socially effective policies must address the economic and institutional realties poor rural majority populations.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva36
HPAI 2• Because of diverse initial conditions, national
policies cannot be decentralized effectively without close attention to local incentives. One size will not fit all local conditions.
• Driving the problem underground can increase contagion risk and more seriously disrupt rural markets/livelihoods.
• Well designed monitoring and traceability systems can improve the terms of market access for the rural poor, making them better off as a result of risk reduction policies.
A Living from LivestockPro-Poor Livestock Policy Initiative
IPALP
Otte, Roland-Holst, & Kazybayeva37
DISCUSSIONDISCUSSION