Livestock & Food Markets for Food Security
Transcript of Livestock & Food Markets for Food Security
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Livestock & Food Markets for Food Security
J. Otte, U. PicaCiamarra, G. Franceschini & D. Roland-HolstFAO and UC Berkeley
ETH Zuerich, 12 December 2008
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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.
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Poverty, Food Insecurity and theRole of Agriculture andLivestock for the Poor
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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
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Poverty & Food Insecurity are Twins50
% o
f Wor
ld P
opul
atio
n
80%
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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
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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
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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
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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)
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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
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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
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The Global FoodMarket
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Income Density
PPLPI, 2008
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Food Expenditure Density
PPLPI, 2008
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Expenditure Density for Cereals
PPLPI, 2008
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Expenditure Density for Meat & Dairy
PPLPI, 2008
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Expenditure Density for Meat
PPLPI, 2008
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Expenditure Density for Dairy
PPLPI, 2008
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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
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Bottom 3 Quintile Markets
Water ICT HealthTransport Housing EnergyFood
Market Size by Sector
$2.9trillion
Source: WRI 2007
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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
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An Example:The Case of Poultry
in Viet Nam
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Viet Nam: Poverty Rate & DensityPoverty densityPoverty rate
Courtesy M. Epprecht
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Viet Nam: Poverty & Market AccessPoverty density Accessibility
Courtesy M. Epprecht
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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
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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
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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
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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
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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
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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
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