smallholders in the era of globalization
TRANSCRIPT
A Living from LivestockPro-Poor Livestock Policy Initiative
Smallholders in the Eraof Globalization
AHAT BSAS International ConferenceKhon Kaen, Thailand, 15 November 2005
Joachim Otte, Martin Upton and Achilles Costales
A Living from LivestockPro-Poor Livestock Policy Initiative
Outline
• Global overview of agriculture and development trends
• Rural livelihoods: Viet Nam and India
• ‘Globalization’ and trends in agricultural trade
• Possible impact on smallholders
A Living from LivestockPro-Poor Livestock Policy Initiative
Regional GroupingsG
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Agricultural Land 2000
Indust.24%
Trans.13%
LAC16%
SSA18%
NENA9%
S.Asia4%
E&SE. Asia16%
Global total: 5.0 billion ha
Glo
bal O
verv
iew
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Human Population 2000
Indust.15%
Trans.7%
LAC9%
SSA10%
NENA7%
S.Asia22%
E&SE. Asia30%
Global total: 6.2 billion
Glo
bal O
verv
iew
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Agricultural Population 2000
Indust.1%
Trans.2%
LAC4%
SSA15%
NENA5%S.Asia
28%
E&SE. Asia45%
Global total: 2.6 billion
Glo
bal O
verv
iew
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Agricultural Population & Land
0
5
10
15
20
25
30
35
Ind
ust.
Tra
ns.
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
Asia
1961
1970
1980
1990
2000
0
200
400
600
800
1,000
1,200
Ind
us
t.
Tra
ns
.
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
1961
1970
1980
1990
2000
Million peopleAgricultural population
ha / ag worker
Agriculture land availability
Glo
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iew
A Living from LivestockPro-Poor Livestock Policy Initiative
Global Poverty (<1USD/day) G
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w
25 - 50
>7550 - 75
10 -25< 10
No data
Source: World Bank 2003
A Living from LivestockPro-Poor Livestock Policy Initiative
Agricultural Production
• In developing countries land productivity must increase (land is limiting factor)
• In developed countries, labour productivity must increase (labour is limiting factor)G
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A Living from LivestockPro-Poor Livestock Policy Initiative
Net Agric. Production 2000
Indust.28%
Trans.7%
LAC11%SSA
6%
NENA5%
S.Asia14%
E&SEAsia29%
Global total: 1,337 billion Int$
Glo
bal O
verv
iew
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Labour & Land Productivity
Labour productivity Land productivity
Int$
/ag
wor
ker
Int$
/ha
agar
ea
Glo
bal O
verv
iew
0
100
200
300
400
500
600
700
800
900
Indust.
Trans.
LAC
SSA
NEN
A
S.A
sia
E&SEA
sia
1961
1970
1980
1990
2000
0
2,000
4,000
6,000
8,000
10,000
12,000
Indust.
Trans.
LAC
SSA
NEN
A
S.A
sia
E&SEA
sia
19611970198019902000
A Living from LivestockPro-Poor Livestock Policy Initiative
Net Livestock Production 2000
538 billion Int$,40 % of Ag production
Glo
bal O
verv
iew
Source: FAOSTAT
Indust.38%
Trans.9%LAC
13%
SSA3%
NENA4%
S.Asia11%
E&SE. Asia22%
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Livestock Share of Agriculture Proportion of agriculturalproduction from livestock
Per
cent
Glo
bal O
verv
iew
Source: FAOSTAT
0
10
20
30
40
50
60
70
Indust.
Tra
ns.
LAC
SSA
NEN
A
S.A
sia
E&
SEAsia
1961
1970
1980
1990
2000
A Living from LivestockPro-Poor Livestock Policy Initiative
Value of Livestock Products 2000
Milk cow24%
Milk other7%
Cattle meat21%
SR meat4%
Pig meat17%
Poultry meat15%
Other meat2%
Eggs9% Other
1%
Glo
bal O
verv
iew
538 billion Int$Source: FAOSTAT
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Livestock Labour & Land Productivity
0
1,000
2,000
3,000
4,000
5,000
6,000
Ind
us
t.
Tra
ns
.
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
1961
1970
1980
1990
2000
0
50
100
150
200
250
300
Ind
ust.
Tra
ns.
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
Asia
1961
1970
1980
1990
2000
Labour productivity
Int$/ag Worker
Land productivity
Int$/ha ag area
Glo
bal O
verv
iew
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Source: FAOSTAT (2002)
Glo
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iew
Livestock Population Trends (LSU)
<-0.5 -0.5 - 0.5 0.5 - 1 > 21 - 2 No data
Percent annual growth 1990 - 2000
A Living from LivestockPro-Poor Livestock Policy Initiative
Main Points
• Agricultural populations are still growing in most low-income countries
• Land per agricultural worker in these countries is limited and decreasing
• Increasing land productivity therefore is key both to maintain food security and to reduce poverty
• In most countries, land productivity is increased by, among other things, ‘diversifying’ into livestock
• ‘Livestock diversification’ entails increasing stocking rates rather than improved livestock performance
• The reverse of all above trends is occurring in industrialized countries
Glo
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verv
iew
A Living from LivestockPro-Poor Livestock Policy Initiative
Farming/Livestock Systems
• Industrialized Countries: very labour saving, very capital intensive - large scale dairy, industrial pigs and poultry, ranching, feed lots
• SSA, SA, SEA: labour intensive, land saving or scavenging – small scale dairy, pastoral, landless & backyard pigs and poultry
• NENA & LAC: labour saving, capital intensive –majority of livestock - labour intensive, land saving or scavenging – majority of holdings
Rur
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ivel
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A Living from LivestockPro-Poor Livestock Policy Initiative
Vietnam: Rural Income Sources
Wages9%
Self-employm
18%
Other11%
Agric.62%
Average: USD750/household/yearPoverty line: app USD650/hh/yearR
ural
Liv
elih
oods
Source: 1998 VLSS, PPLPI 2005
A Living from LivestockPro-Poor Livestock Policy Initiative
Vietnam: Rural Household Types
0
200
400
600
800
1,000
1,200
1,400
1,600
Type
1
Type
2
Type
3
Type
4
Type
5
OtherWagesSelf-emplLivestockCrops
Ann
ual h
ouse
hold
inco
me
in U
SD 35%
10% 33%
6%
17%
Type:• Diversified with market-
oriented agriculture• Diversified with
agriculture for home consumption
• Agriculture, market-oriented
• Semi-market-oriented• Subsistence
Rur
al L
ivel
ihoo
ds
Source: 1998 VLSS, PPLPI 2005
A Living from LivestockPro-Poor Livestock Policy Initiative
Vietnam: Returns to Livestock
0
50
100
150
200
250
Type 1 Type 2 Type 3 Type 4 Type 5
USD/LU per year
Rur
al L
ivel
ihoo
ds
Source: 1998 VLSS, PPLPI 2005
A Living from LivestockPro-Poor Livestock Policy Initiative
India: Dairy Household Income
0.0
0.5
1.0
1.5
2.0
2.5
1 2 3 4 5 6 7 8 9 10 11 12
Farm number
Income per hh member (USD/day)
Land-less
Small-holders< 1 ha
‘Large’farmers> 1 ha
Rur
al L
ivel
ihoo
ds
Source: PPLPI Working Papers
A Living from LivestockPro-Poor Livestock Policy Initiative
India: Income Structure
0%
20%
40%
60%
80%
100%
1 2 3 4 5 6 7 8 9 10 11 12
Net cash farm Non-cash farm Off-farm
Farm number
Rur
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ivel
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ds
Source: PPLPI Working Papers
A Living from LivestockPro-Poor Livestock Policy Initiative
India: Return to Labour
• Larger farms make a profit from dairying and often generate employment for non-family members
• Landless and marginal smallholders gain most income from non-farm sources
• Return to labour for landless and marginal rural smallholders is often below local wage rate
Rur
al L
ivel
ihoo
ds
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
1 2 3 4 5 6 7 8 9 10 11 12
Return tolabourLocal wagerate
USD
/hou
r
Landless Smallholders ‘Large’ farmers Source: PPLPI Working Papers
A Living from LivestockPro-Poor Livestock Policy Initiative
Dairy Farm Trends
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
IndiaPakistanNZUSAGermany
0.0
0.5
1.0
1.5
2.0
2.5
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
IndiaPakistanNZUSAGermany
Farm numbers (1991 = 1) Herd size (1991 = 1)
Source: IFCN 2003
Rur
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ivel
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A Living from LivestockPro-Poor Livestock Policy Initiative
Main Points
• Agriculture (still) is the main source of income in rural areas and provides some income to most rural households
• However, non-agricultural income is also important and households diversify and are diverse
• Productivity differences between households are very large
• On-farm labour and livestock productivity of low-resource households is extremely low
• For these low-resource households the rural labour market is crucial
• Broad-based agricultural growth is a major stimulus for the rural labour market (horizontal linkages)
Rur
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A Living from LivestockPro-Poor Livestock Policy Initiative
Globalization & Trade
• Opening economies: increased mobility of capital, goods and services
• Strong push for standardization and harmonization of standards
• Development of new supply chains and ‘products of mixed origin’
• Heightened emphasis on ‘bio-security’ measures for biological products’
Glo
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atio
n &
Tra
de
A Living from LivestockPro-Poor Livestock Policy Initiative
Agricultural Exports 2000
Indust67%
Trans4%
LAC12%
SSA2%
NENA3%
S.Asia2%
E&SEAsia10%
Global total: 415 billion US$
Glo
baliz
atio
n &
Tra
de
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Livestock Product Exports 2000
Indust84%
Trans5%
LAC6%
SSA0%
NENA1%
S.Asia0%
E&SEAsia4%
Global total: 76 billion US$
Glo
baliz
atio
n &
Tra
de
Source: FAOSTAT
A Living from LivestockPro-Poor Livestock Policy Initiative
Trends in Agricultural Exports
0
50
100
150
200
250
300
Ind
us
t
Tra
ns
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
19611970198019902000
0
10
20
30
40
50
60
70
Ind
us
t
Tra
ns
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
19611970198019902000
Glo
baliz
atio
n &
Tra
de
Million USD2000 Million USD2000
Livestock productsAll agricultural products
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Livestock Share in Agricultural Exports
0
5
10
15
20
25
Ind
us
t
Tra
ns
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
19611970198019902000
Glo
baliz
atio
n &
Tra
de
Global average: 18% ofagricultural exportsSource: FAOSTAT
Percent (of value)
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Agricultural Imports 2000
Indust72%
Trans5%
LAC7%
SSA1%
NENA6%
S.Asia0%
E&SEAsia9%
Glo
baliz
atio
n &
Tra
de
All agricultural products Livestock products
Indust66%
Trans6%
LAC7%
SSA2%
NENA7%
S.Asia2%
E&SEAsia10%
A Living from LivestockPro-Poor Livestock Policy Initiative
Net Agriculture Trade Values 2000
-25,000
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000In
du
st
Tra
ns
LA
C
SS
A
NE
NA
S.A
sia
E&
SE
As
ia
CropLstk
USD million
Glo
baliz
atio
n &
Tra
de
Source: FAOSTAT
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Projected Net Trade in Meat (‘000 MTs)
85 Net Export
-24 Net Import
2015: -2,3602030: -3,520
2015: -2,9502030: -4,000
2015: -802030: -410
2015: 1,7702030: 2,770
2015: -2802030: -740
North America
Latin America
Sub-Saharan Africa
European Union (15)
Transition Countries
South Asia EastAsia
Oceania
Near East /North Africa
2015: -1,9002030: -1,090
IndustrialCountries2015: 7,9302030: 9,920
Source: FAO 2002
Glo
baliz
atio
n &
Tra
de
A Living from LivestockPro-Poor Livestock Policy Initiative
Projected Net Trade in Milk (‘000 MTs)
2015: - 8,9002030: -12,500
2015: -9,5502030: -13,000
2015: -1,2002030: -1,500
2015: -6,3502030: -6,700
2015: -3,6002030: -5,200
North America
Latin America
Sub-Saharan Africa
European Union (15)
Transition Countries
South AsiaEastAsia
Oceania
Near East /North Africa
2015: 3,5002030: 5,200
IndustrialCountries2015: 28,0002030: 35,700
Source: FAO 2002
85 Net Export
-24 Net Import
Glo
baliz
atio
n &
Tra
de
A Living from LivestockPro-Poor Livestock Policy Initiative
Main Points
• Globalization has only had significant impacts on agricultural trade in industrialized countries, LAC and E&SE Asia
• The largest increase in trade occurred in the 1970s
• Only a relatively small proportion of agricultural products and an even smaller proportion of livestock products is traded
• The vast bulk of this agricultural trade takes place between industrialized countries
• The latter are net exporters of livestock products but net importers of other agricultural products
• All other regions are (and will remain) net importers of livestock products (especially dairy products)
Glo
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Tra
de
A Living from LivestockPro-Poor Livestock Policy Initiative
Globalization & Smallholders
• Demand for food of animal origin in industrialized countries is saturated, while it is growing in other regions
• Livestock/food industry of industrialized countries can only expand by increasing exports and/or by investing ‘abroad’
• Investment will occur in areas where demand density is high, the law rules and minimum infrastructure is in place
• Products for middle to high income consumers
• Sourcing of primary inputs: locally and/or imported
• FDI in other sectors and from other sources too!!
Glo
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n &
Sm
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Vietnam & Globalization
1. Baseline Scenario: • Admission of China in the
WTO• Removal of quotas on textiles
to the US and the EU• Expansion of the EU to 25
members• Agricultural productivity
growth of 2 percent/annum2. Unilateral Liberalization
(UL):• Removal of all import tariffs• Removal of all export
subsidies
3. Full Global Liberalization (GTL):• Same as 2, except that the
tariffs to all countries are removed
4. Doha SDT (DSDT):• Removal of all exports
subsidies• Domestic support and tariffs
are reduced, preserving the Special and Differential Treatment of developing countries (smaller cuts) and no cuts in the least developing countries.G
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Trade Liberalization & Poverty
UL GTL DSDTUnilateral Global DohaSTD
Glo
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Vietnam: Poverty & LivestockPoverty Incidence Livestock Dependency
Glo
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Simplified Dynamics
Rural households
(Peri-)Urbanhouseholds
Agriculturalhouseholds
Non-agric. households
Agriculturalhouseholds
Non-agric.households
Subsistencehouseholds
Semi-com-mercial hhs
‘Commercial’ households
64.1 Mio 15.7 Mio
35.9 Mio28.2 Mio
1.2 Mio
3.9 Mio 10.6 Mio
Glo
baliz
atio
n &
Sm
allh
olde
rs
21.4 Mio
14.5 Mio
Capitalflows
A Living from LivestockPro-Poor Livestock Policy Initiative
Main Points• Interactions between livestock, other agricultural
factors, inputs, and outputs and the rest of the economy are complex.
• Private capital is indispensable to expanding smallholder livestock capacity.
• A multi-level approach to (rural) development and poverty reduction may be desirable, e.g.
Macro – infrastructure investment and good governance‘Median’ poor smallholder – livestock development targeted at households above a critical level of resource and financial capacityPoorest smallholder – labour market facilitationG
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References & Further Reading
PPLPI Working Papers
The Contribution of Livestock to Household Income in Vietnam: A Household Typology Based Analysis
A Review of Milk Production in Bangladesh with Particular Emphasis on Small-scale Producers
A Review of Milk Production in Pakistan with Particular Emphasis on Small-scale Producers
A Review of Milk Production in India with Particular Emphasis on Small-scale Producers
FAOSTAT: http://faostat.fao.org
For more information please visit the PPLPI website:www.fao.org/ag/pplpi.htmlwww.fao.org/ag/againfo/projects/en/pplpi/publications.html
A Living from LivestockPro-Poor Livestock Policy Initiative