livestock & food markets for food security
TRANSCRIPT
Livestock & Food Markets for Food Security
J. Otte, U. PicaCiamarra, G. Franceschini & D. Roland-HolstFAO and UC Berkeley
ETH Zuerich, 12 December 2008
Key Points• Agricultural populations are still growing in many
parts of the world while the potential for expansion of agricultural land is limited.
• Because of high value-added livestock can play a major role in the required intensification of agricultural production.
• In developing countries, higher income elasticities for livestock products promise faster growth of farm incomes than staples.
• Livestock can thus also play a major role in poverty reduction via urban – rural wealth transfers.
Poverty, Food Insecurity and theRole of Agriculture andLivestock for the Poor
Global Income Distribution (2004)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
>10.0
2.0-10.0
1.0-2.0
< 1.0
$/day
1.0billion
Developing1.4 billion
1.6billion
1.4billion
2.3billion
Developed0.9 billion
Poverty & Food Insecurity are Twins50
% o
f Wor
ld P
opul
atio
n
80%
Where are the Poor/Food Insecure ?
0 500 1,000 1,500
South Asia
East Asia
SS Africa
L America &Caribb
E Europe &C Asia
Near East &N Africa
<1$1-2$2-10$
Million people
Where are the Poor/Food Insecure ?
0
100
200
300
400
500
600
Sou
th A
sia
SS
Afri
ca
Eas
t Asi
a
L. A
mer
ica
NE
& N
A
UrbanRural
Million extreme poor
Source: Ravallion et al., 2007
Agricultural Populations & Land
0
200
400
600
800
1,000
1,200
OE
CD
Tra
ns.
LA
C
NE
NA
SS
A
S.A
sia
E&
SE
Asia
1961
1970
1980
1990
2000
Million people
Agricultural population
0
5
10
15
20
25
30
35
OEC
D
Tra
ns.
LA
C
NEN
A
SS
A
S.A
sia
E&
SEA
sia
1961
1970
1980
1990
2000
Ha / ag worker
Ag land availability
The Role of Livestock - Household
• 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
• More income from family labour through:• More efficient use of
heterogeneous labour resources
• Balance seasonal labour demand for crop farming
• Release labour for more productive purposes (draught animals)
• Use of labour for processing of primary products (value-added capture)
The Role of Livestock - Agriculture
60
80
100
120
140
160
1961
1970
2000
Dev/pingDev/ped
Index of share of agricultural GDPfrom livestock
Sour
ce: F
AOST
AT
Index 1961=100
1980
1990
Elements of a Pro-poor Policy
• Focus on asset classes that the poor possess, and
• increase the returns to these assets, i.e.• increase asset productivity • target output to demand• improve market access• strengthen supply chain
bargaining power for the poor
The Global FoodMarket
Income Density
PPLPI, 2008
Food Expenditure Density
PPLPI, 2008
Expenditure Density for Cereals
PPLPI, 2008
Expenditure Density for Meat & Dairy
PPLPI, 2008
Expenditure Density for Meat
PPLPI, 2008
Expenditure Density for Dairy
PPLPI, 2008
Income & Food Preferences
Q4
Q3Q2
Q5
Live animals, wet marketsWet markets, cheap cold chain
Inexpensive, partially processedcold chain products
High value processed andconvenience cold chainproducts
Income & consumer preferencesAho, 2005
100
Annual per capita income in USD ppp
Proportion of population in agriculture (%)
ChinaIndia
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0 20 40 60 80
IndustLACNENAS.AsiaSE&E.AsiaSSATran
Q1 Hardly any market participation
Average income by Quintile
Bottom 3 Quintile Markets
Water ICT HealthTransport Housing EnergyFood
Market Size by Sector
$2.9trillion
Source: WRI 2007
Food Markets and Poverty Reduction
• The poor are highly dependent on food markets, both as producers and consumers
• Areas of high food expenditure density and predominantly smallholder food production are to a large extent co-located
• In the case of livestock, demand for live animals and inexpensive partially processed food dominates these markets
• Improving ‘market institutions’ can therefore benefit both poor producers and consumers
An Example:The Case of Poultry
in Viet Nam
Viet Nam: Poverty Rate & DensityPoverty densityPoverty rate
Courtesy M. Epprecht
Viet Nam: Poverty & Market AccessPoverty density Accessibility
Courtesy M. Epprecht
Poultry Sector Trends
0
50
100
150
200
250
300
350
400
450
500
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Million birds produced
Sou
rce:
FA
OS
TAT
2008
HPAI
Viet Nam Poultry Keepers & Poultry
8.3 million producers, 218 million birds (2001)
94.77%
5.19%
0.03%
Extensive Semi-intensive Intensive
Flocks
54.23%
19.96%
25.81%
Extensive Semi-intensive Intensive
Birds
Ha Noi Consumer Preferences
0
10
20
30
40
50
60
70
80
Local Chicken CrossbredChicken
Industrial Chicken
Regular Price
High Price
Price by Chicken Type (VND ‘000)
0
1
2
3
4
5
Price Taste Disease risk RegularSupply
Ranking of Chicken Attributes
Source: Ifft et al., 2008
Poultry Flows North Viet Nam
Poultry Fa rm ers
Itine rant Village Traders (fa rm gate )
Re ta ile rs
W holesa lers
Local/Community Market
Neighbors /V illagers (farmgate)
47% 15%38%
(64%)
CONSUMERS
(18% )(18% )
73% 27%
(19% )
(54%)
(27% )
Other intermediaries
93%
7%
Source: Tung & Costales 2007
Markets, Smallholders, and Food Security
• Market participation by smallholders is plagued by high access costs and information failures
• These threaten food security by undermining supply and investment incentives for farmers,• Promote a chronic cycle of subsistence poverty
and rural to urban migration• Reduce national food supplies while increasing
the urban food-dependent population• Market access reforms can strengthen low
income supply chains and multiply pro-poor impacts
And, it can be done......
• Ha Noi consumers care about and are willing to pay for certified safe local chicken varieties.
• Under these conditions smallholders can be recruited into a virtuous quality cycle that increases their incomes and improves food safety. ‘Certified’
smallholder ‘village’chicken
