Increasing population, income growth and
urbanization in developing countries are boosting the demand
for food of animal origin. This trend provides significant
opportunities for poverty reduction, as an estimated 42 percent
of the poor worldwide are dependent on livestock as part of
However, imperfect or missing markets often trap poor livestock
keepers in low-income equilibria, preventing them from deriving
major benefits from the increased demand for animal protein.
Thus, if poverty alleviation is a policy goal, policy makers
should identify, design and implement public actions that
allow poor livestock producers to take advantage of the increasing
demand for meat and milk.
This is, however, not a simple task: livestock sector development
is shaped by an intertwined mixture of macroeconomic and agricultural
sector policies, with livestock sector specific interventions
playing a sub-ordinate role, while policy makers in the livestock
departments tend to design livestock sector policies in isolation
with minimal consultation with other ministries or representatives
of the livestock sector.
A Pro-Poor Livestock Policy Framework
In the last decades most developing countries have gone through
orthodox macroeconomic and institutional reforms. These have
promoted economic growth but largely failed to significantly
benefit poor livestock keepers. For instance, Mali today is
a fair, competitive economy; scores well in most measures
of governance; and between 1994 and 2003 GDP growth averaged
5.6 percent per year. Yet, Mali is still desperately poor,
with over 66 percent of the rural poor holding livestock,
and despite the country having a notable comparative advantage
in livestock production. The policy challenge, therefore,
is not only to create a conducive macroeconomic and institutional
environment, but also to make the growth process pro-poor.
To ensure that poor livestock keepers are included in and
contribute to economic growth, governments should design and
implement policies targeted at achieving three major objectives:
(1) ‘Establishing the basics for livestock production’,
i.e. providing poor livestock holders with adequate and secure
access to basic production inputs. This objective contains
two subsidiary policy objectives, which are: (a) securing
access to land, water and feed, and (b) providing risk coping
mechanisms for natural disasters and price shocks. Insecure
access to basic inputs and variability of returns prevent
livestock keepers from making efficient use of their scarce
resources and from effectively responding to market signals.
For instance, high variability of returns may induce pastoralists
to over-stock and to use livestock as a form of insurance
rather than as a means of production.
(2) ‘Kick-starting domestic markets for livestock and
derived products’. This objective has three subsidiary
policy objectives, namely to provide secure access to: (a)
livestock services, (b) credit and secondary inputs, such
as compound feeds, and (c) domestic output markets. Poor livestock
producers, in fact, even when ‘having access to the
basics’, may be locked into low-income equilibria as
missing or imperfect markets prevent them from availing production-increasing
inputs necessary to escape poverty. For instance, high fixed
transaction costs and lack of information hinder price transmission,
potentially preventing smallholders from fully benefiting
from a prospective increase in meat/milk price.
(3) ‘Sustaining and expanding livestock production’.
Three sub-objectives are subsumed under this overall objective:
(a) securing food safety and quality of livestock products
according to national, regional and international standards;
(b) promoting research activities in animal feeding and breeding
to support the production of high quality commodities; and
(c) ensuring the environmental sustainability of livestock
production. These are mostly public goods and necessary elements
for countries to be competitive in international markets as
well as to avoid smallholders being crowded out from their
domestic markets by foreign competitors. For instance, livestock
research activities driven by the profit-seeking efforts of
private institutions rarely serve the poor, which are thought
unwilling or unable to pay for research outcomes.
Livestock Policies in Africa, Asia and Latin America
The above framework was used to review the current policy
environment in eighteen countries in Africa, Asia and Latin
America, and to identify potential gaps and inconsistencies
in their livestock sector policies. The countries selected
for the review are Ethiopia, Kenya, Sudan, Tanzania and Uganda
in East Africa; Burkina Faso, Mali and Senegal in West Africa;
Bangladesh, India and Nepal in South Asia; Cambodia, Laos,
Thailand and Vietnam in Southeast Asia; and Bolivia, Ecuador
and Peru in Latin America. These countries are low to lower-middle
income rural economies, with the livestock sub-sector accounting
for one-third to one-fifth of agricultural value added. Poverty
rates range between 15.5 and 79.1 percent.
Macroeconomic and sectoral policies are fairly similar among
the various geographical regions and countries. Macroeconomic
and institutional policies follow mainstream economic theory
and are intended to provide a conducive market environment.
Livestock sector policies, however, are not explicitly designed
to be pro-poor. The stated policy objective for the livestock
sector is usually to increase livestock production rather
than to mitigate poverty. Consequently, policies for ‘establishing
the basics’ receive low attention and issues such as
access to land, water and insurance are treated en-passant.
Conversely, national policy documents emphasize the importance
of interventions to ‘kick-start domestic markets’,
with a focus on input over output markets: reforms are undertaken
in credit markets and in animal health and extension service
delivery, while marketing and market information are only
marginally addressed. Finally, some attention is paid to policies
aimed at ‘expanding and supporting livestock production’
in the long run. Research has been reformed, either through
centralizing or decentralizing research institutes, and countries
are increasingly opening their markets and willing to satisfy
international sanitary standards.
Conclusions and Recommendations
In the case study countries, with a view to rural poverty
reduction, the current policy framework appears unbalanced
under two perspectives. First, it implicitly focuses on livestock
production and productivity, rather than on poor livestock
holders and their livelihoods. Second, current policies are
biased towards ‘kick-starting domestic livestock markets’
and ‘expanding to international output markets’.
Yet, secure access to basic production inputs and reduced
vulnerability are key elements for poor livestock holders
to efficiently respond to policies designed to ‘kick-starting’
and ‘expanding’ markets and hence to escape poverty.
Governments should be more aware of the causal links between
livestock sector development and poverty reduction, and take
the poor livestock-producing household rather than a production
function as the entry point for policy design. This would
imply focusing not only on technical issues and market policies
but also on strategies promoting access to basic resources,
and reducing vulnerability and transaction costs of small
livestock producers. Only then will input and output market
policies be effective, sustainable and pro-poor.