This chapter attempts to tie together the multiplicity of quantitative results and qualitative insights in the previous chapters and underlying country reports, to address the issues laid out in Chapter 1. The end objective, it will be re-called, is to assess the outlook for smallholders in livestock farming given the observed scaling up of the sector, and what can be done to provide a more level playing field for them if in fact scaling-up is driven by much more than economies of scale in technology. The urgency of the topic derives from the fact that livestock is one of the few commodities that smallholder farmers produce that is growing rapidly in demand, and if they cannot compete in this area, the overall prospects for them in farming are bleak.
The first finding from all the country studies is to confirm that livestock production is in fact concentrating rapidly, as suggested by previous studies, in the sense that more and more animals are being kept per square kilometer. Chapter 2 showed that this is primarily a matter of concentration around capital cities and other major demand centers with the exception of Brazil, where concentration is around the region supplying inputs. The Philippines study, in particular, showed that concentration can involve more and more animals on more and more smallholder farms, in addition to the creation of new large, intensive farms. An important issue investigated, reported on below, is whether a given number of animals kept by many smallholders potentially pollute more or less than the same size herd kept by one large farmer and whether they spend more or less per unit of output as a large-scale producer to mitigate the effect of pollution on the environment.
The country case studies also substantiate that scaling-up is in fact occurring. Smallholder output continues to grow at high rates in certain cases, such as dairy in India and swine in the Philippines. However, evidence reviewed in Chapter 2 suggests that large-scale enterprises are growing even more rapidly, taking market share away from smallholders. This is particularly relevant to Thailand and Brazil, where there are relatively small numbers of small-scale producers left in the broiler business. The question then is whether large-scale livestock production will out-compete smallholder producers everywhere, and eventually provoke their exit from the sector. The study adopted two approaches to that issue. First, the country studies assessed available time series data from national sources to look at the impact of ongoing concentration and scaling-up of livestock production on social, equity, health and environment outcomes. These insights were synthesized in Chapter 3, and the conclusions are drawn in the next section below.
Second, field surveys were conducted on cross-sections of farms of different sizes and degrees of vertical integration, to address the issues more formally. Descriptive results here are summarized and commented on in section 9.3 below; that section tries to answer the question: who is presently doing best in the livestock sector? Results are summarized with respect to tests of hypotheses one, two, three and six, as raised in Chapter 1. The following section, 9.4, summarizes results from analytical work testing hypotheses four, five and seven, also raised in Chapter 1. That section responds to the issue of why some farms are more efficient at making a profit from livestock than others. The following section, 9.5, then draws on the results of the previous two sections to assess the outlook for smallholder farming under various scenarios. Finally, we conclude in section 9.6 with an analysis of domains for policy interventions that can help prevent the premature displacement of small-scale producers because of failure to address a non-level plying field created by unequal transaction costs, size-related differences in the capture of environmental externalities, and unequal policy subsidies received.