Post on 19-Jul-2020
A Living from LivestockPro-Poor Livestock Policy Initiative
External Shocks & Adjustments in Smallholder Livestock Production
D. Roland-Holst, M. Epprecht and J. Otte
The Future of Poultry Farmers in Viet Nam after HPAIHanoi, Viet Nam, 8–9 March 2007
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Outline
• Livestock sector characteristics
• The role of livestock in rural incomes
• Adjustment options to external shocks – value chain certification
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Livestock Ownership in Viet Nam
0
20
40
60
80
100M
ajor
Urb
an
Mid
dle
Urb
an
Sm
all U
rban
Nor
ther
nM
ount
ain
Red
Riv
erD
elta
Nor
th C
entra
lC
oast
Sou
th C
entra
lC
oast
Cen
tral
Hig
hlan
ds
Sou
thea
st
Mek
ong
Riv
erD
elta
% Households Owning Livestock
Source: 1998 VLSS
Urban Rural
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Households Engaged in:Livestock Poultry
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Livestock Ownership in Viet Nam
0
5
10
15
20
25
30M
ajor
Urb
an
Mid
dle
Urb
an
Sm
all U
rban
Nor
ther
nM
ount
ain
Red
Riv
erD
elta
Nor
th C
entra
lC
oast
Sou
th C
entra
lC
oast
Cen
tral
Hig
hlan
ds
Sou
thea
st
Mek
ong
Riv
erD
elta
CattlePigsChickenDucks/Geese
Herd / Flock Composition Urban Rural
Source: 1998 VLSS
Num
bers
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Poultry Flock Size & CompositionFlock Size Flock Composition
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Rural Income Sources
Wages9%
Self-employm
18%
Other11%
Agric.62%
Average: USD750 / household / yearPoverty line: app USD650 / hh / year
Source: 1998 VLSS, PPLPI 2005
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Viet Nam: Rural Household Types
Type:• ‘Diversified’
• with market-oriented agriculture (>75% sold)
• with semi-market-oriented agriculture
• ‘Agricultural’• market-oriented• semi-market-oriented• subsistence (<25% sold)
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%
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Rural HH: Agricultural Incomes
‘Com
mer
cial
’0
10
20
30
40
50
60
70
80
90
100 Other agricincomeOther livestockincomeSaleschicks&ducksHome conschicks&ducks
Sem
i-co
mm
erci
al
Sub
sist
ence
Percent of Agricultural Income
Source:Viet Nam;1998 LSMS‘A
gric
ultu
ral H
ouse
hold
s’
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Spatial Heterogeneity
12345
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Income from PoultryShare Total per Area
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Chicken Ownership – Rural Viet Nam
0
20
40
60
80lo
w
low
-m
ediu
m
med
ium
med
- hi
gh
high
Proportion (%) of HouseholdsOwning Chicken
Income Quintile
200
USD
/yea
r
430
USD
/yea
r
690
USD
/yea
r
1,12
0 U
SD/y
ear
3,20
0 U
SD/y
ear
Income Quintile
0
5
10
15
20
25
low
low
-m
ediu
m
med
ium
med
- hi
gh
high
Average Chicken FlockSize
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Poultry Sector Composition
95%
5%
0%
0%
<50 50-249 250-999 >999
Flock size class
7.9 millionflocks
Flocks by Size Class
birds
55%16%
3%
26%
<50 50-249 250-999 >999
Flock size class
>118 millionbirds
birds
Poultry by Flock Size Class
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Profitability of Backyard Chicken
35.0Eggs consumed/sold (nr)
6.7Birds consumed/sold (nr)
575.0Return on investment (%)
50.0Investment/hen
287.4Gross revenue/hen
6.3Depreciation of hen
244.7Value of birds consumed/sold
49.0Value of eggs consumed/sold
Item
Average Return per Hen and Year(Monetary Values in 1,000 VND)
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Poultry Income by Poverty Status
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Poultry Keeping and Poverty
0
10
20
30
40
50
60
70
80N
atio
nal
aver
age
Nor
ther
nM
ount
ain
Red
Riv
erD
elta
Nor
th E
ast
Sou
th C
entra
lC
oast
Cen
tral
Hig
hlan
ds
Sou
thea
st
Mek
ong
Riv
erD
elta
All
Poultrykeepers
% Households below poverty line
Source: 2002 VLSS
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Coping Strategies for Smallholders
Endogenous• Gains through price increases
of substitute products• Intensification of other farming
activities (e.g. pig production)• Engagement in ‘new’ farming
activities (e.g. fruit)• ‘Release’ family labour for
labour market (e.g. construction)
• Draw on savings and social networks
Exogenous• Compensation
• partial (20% of value of culled bird)
• late (several months delay is not uncommon)
• none for revenue foregone• Restocking assistance
• delayed• inopportune
• Diversification assistance• ‘Supply-chain certification’
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Poverty & Market AccessPoverty Density Accessibility
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Resource Flows
49%
% Marketing outside district
27%
10%
1%
54% of poultry heads
15%
6%
24% of poultry
93% of farms
5% of farms
0.02%
>2000
1%
150-2000
50-150
<50
TCP Rehab - GSO survey data
49%
D.O.C. % from outside district
38%
27%
10%TCP Rehab - GSO survey data
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Quality Recognition in Supply Chain
Broiler: 23,000 to 24,000 VND / kgLocal: 44,000 to 45,000 VND / kg !!!
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Market Flow: Resources and IncomeSupply Chain – Resource Flow
Incentives:Quality
Technology Transfer
Behaviour:Market ParticipationRisk Management
Producers
Value Chain – Income Flow
Consumers
Asse
mbl
ers
Proc
esso
rs
Dis
trib
utor
s
Reta
ilers
Certification
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Certification & Risk Management
• Government gains• Testing moves downstream reducing costs• More rapid disease identification• Lower control costs
• Consumers gain• Food and disease risk reduction• Quality improvement• Product differentiation
• Producers gain• Market access• Extension services & technology transfer
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Conclusions
• Livestock play a complex role in the rural economy, but poultry can be an important catalyst for smallholder poverty reduction in Viet Nam
• In a dynamic export-oriented economy, an essential way to promote rural livelihoods is by improving the terms of urban market access for small farmers.
• A multi-level approach to (rural) development and poverty reduction may be desirable, e.g.• Macro – infrastructure investment and good governance• ‘Median’ poor – livestock development targeted at households above a
critical level of resource and financial capacity, focusing on extension services, standards, and product quality certification
• Poorest – labour market facilitation
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References & Further Reading
PPLPI Working Papers:
No. 21 The Contribution of Livestock to Household Income in Vietnam: A Household Typology Based Analysis
No. 24 Geographical Dimensions of Livestock Holdings in Vietnam: Spatial Relationships among Poverty, Infrastructure and the Environment
PPLPI Research Reports
Integrated Poverty Assessment of Livestock Promotion: The Case of Viet Nam
Pilot Programme for Certified Smallholder Poultry Supply Chains for Hanoi
For more information please visit the PPLPI website:www.fao.org/ag/pplpi.html www.fao.org/ag/againfo/projects/en/pplpi/publications.html
A Living from LivestockPro-Poor Livestock Policy Initiative