A Living from LivestockPro-Poor Livestock Policy Initiative
IntegratedPovertyAssessment forLivestockPolicyFAO Policy Briefing to the Government of Viet Nam
23 March 2010
David Roland-HolstJoachim Otte, & Jenny Ifft
Livestock Development for Poverty Reduction
and Growth in Viet Nam
A Living from LivestockPro-Poor Livestock Policy Initiative
Contents
1. Livestock and the Poor
2. IPALP Methods
3. How to Help Poor Farmers
4. Conclusions & Discussion
A Living from LivestockPro-Poor Livestock Policy Initiative
Sector Transition or Parallel Development?
Smallholder poultry development offers
three important advantages to policy
makers:
1. Enhances domestic food security
2. Liberates industrial capacity for export
promotion
3. A potent catalyst for poverty alleviation
among the rural majority
A Living from LivestockPro-Poor Livestock Policy Initiative
Backyard Chickens are Ubiquitous....
although poultry sectors may be quite diverse…
Birds
Flocks
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam 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
Cu
mu
lati
ve In
co
me a
nd
Po
ult
ry R
even
ue
Total Income
Poultry Income
Equality
Poultry income
is far more equitably
distributed thantotal income !
A Living from LivestockPro-Poor Livestock Policy Initiative
Livestock: Economic Perspectives
• More income from natural resourcesthrough:
• Access to common land resources
• Utilization of marginal resources, e.g. ‘waste land’ not suitable for crops
• Re-cycling crop by-products
• Increase in output of crop production (fertilizer)
• Savings
• More income from family labour through:
• Better use of heterogeneous labourresources
• Balance seasonal labourdemand for crop farming
• Use of labour for processing of primary products (value added capture)
• Release labour for more productive purposes (animal traction)
A Living from LivestockPro-Poor Livestock Policy Initiative
Linkage Analysis with SAMs
Multiplier Comparison Multiplier Livestock/Comp
Buff&Cattle 2.02 Veg&Fruit 0.93 2.19
Other Lvstk 1.84 Oth Crops 0.61 3.34
Raw Milk 2.24 Textiles 1.09 1.86
Silk&Wool 2.03 ElecEquip 0.74 2.73
Beef 1.37 Machinery 0.38 5.39
Other Meat 1.68 OthMfg 1.14 1.78
Dairy 1.87 Trade 1.11 1.83
Leather 2.04 Bus Serv 1.36 1.49
Livestock 2.03
Proc Food 1.74
A Living from LivestockPro-Poor Livestock Policy Initiative
Policy Analysis
Three ways to help poor farmers:
1. Increase output – demand and productivity
promotion
2. Increase price – value creation and quality
3. Reduce costs – market access, information
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam: Poultry Promotion
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam: Pig Promotion
A Living from LivestockPro-Poor Livestock Policy Initiative
Household Income Effects of a 50 % National Poultry Loss
A Living from LivestockPro-Poor Livestock Policy Initiative
Market Access and the Poor
• Market access is the gateway out of long term poverty for most of the world’s poor.
• The poultry-dependent are more likely to be poor, and poultry income thus offers a strong catalyst for poverty reduction.
• How then can we best facilitate improvements in this source of income?
Promote self-directed poverty alleviation via improved market access.
A Living from LivestockPro-Poor Livestock Policy Initiative
Most of Viet Nam’s Poor are Near Markets
Po
vert
y I
ncid
en
ce
Po
vert
y D
en
sit
ySource: IFPRI Source: IFPRI
A Living from LivestockPro-Poor Livestock Policy Initiative
Poultry Markets have Many Imperfections
High Mortality
Low Input Quality
Low SPS Standards
Low Bargaining
Power
Moral Hazard
Distrust,Low WTP
Adverse Selection
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam and Certification
1. Detailed surveys of consumers, producers,
market intermediaries
2. Statistical analysis of economic structure,
behaviour, and market linkages
3. Certified safe chicken and duck pilot programs
4. Policy and consultative support for larger
programs by GOV and USAID
A Living from LivestockPro-Poor Livestock Policy Initiative
Overcoming Market UncertaintySupply Chain – Resource Flow
Incentives:Technology Transfer
Behaviour:Market ParticipationRisk Management
Producers
Value Chain – Income Flow
Consumers
Assemblers
Processors
Distributors
Retailers
Certification
A Living from LivestockPro-Poor Livestock Policy Initiative
Certified Supply Chain Projects
• Traditional Markets (Cho) in Ha Noi
• The majority of poultry, both duck and chicken are still purchased in traditional markets in Ha Noi
• 8 vendors across 4 markets
• Coordination with: farmers, traders, slaughterhouses, and market vendors
• Specialty and grocery stores in Ho Chi Minh City
• Grocery and specialty poultry stores have a large and
growing role in poultry marketing
• Relationship with distributors or poultry companies has a large role in this type of system: coordination is with
farmers, slaughterhouses, distributors and stores/shops
A Living from LivestockPro-Poor Livestock Policy Initiative
Main Findings
• Urban households exhibit significant willingness to pay for chicken traceability and certification
• Taste (breed) is also very important, i.e. a premium poultry product in Viet Nam, in addition to having a credible safety guarantee, must be free range
Policy messages:
• Bio-security and poverty reduction can be advanced
with incentive compatible, privately financed quality schemes like certification
• Field experiments are a promising way to estimate consumer valuation of traceability
A Living from LivestockPro-Poor Livestock Policy Initiative
Contracting: What It can Offer
Supply Chain – Resource Flow
Producers
Value Chain – Income Flow
RetailersContracting
Quality/Reputation
Reliability/Continuity
Reliability/Continuity
Standards/Technology/Inputs
Credit
Market Access
A Living from LivestockPro-Poor Livestock Policy Initiative
Policy Implications
Livestock can make a substantial contribution to poverty reduction and economic growth, but
• Pro-poor policies need targeting
• Livestock promotion has significant potential• Increase output quantity and quality
• Improve terms of market access• Reduce trade margins
• Reduce perishability
• Improve traceability
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