Livestock in Southeast Asia
Notes on Development and Growth
Healthy and productive livestock make important contributions to food production, income generation, job creation, economic growth, and poverty alleviation. As world population grows and middle-class incomes rise, demand for livestock products increase. In Southeast Asia, the success of agribusiness―especially those related to industrial livestock production—are deeply rooted in a dynamic world shaped by two decades of rapid economic growth and globalization.
The economic growth rate for Southeast Asia and the Pacific has averaged 5% from 1960s to 2000s. More specifically, it was 3.3% from 1960 to 1980, 5.6% from 1980 to 1990, and 6.4% from 1990 to 2003, according to World Development Indicators. This growth led to an impressive convergence. Countries that had been labeled poor, such as many in West Africa and Asia, moved quickly into the ranks of what we would now call middle income nation-states.
After the financial meltdown, the global economy spiraled downward. As a result, commodity prices dropped sharply and ocean shipping rates collapsed. Aggregate demand for animal proteins declined, but margins were somewhat protected by offsetting declines in freight rates and grain prices. As expected, this protracted global recession has impacted the region's livestock sectors but not nearly to the degree that it has affected growers in the EU and the US.
The fragile balance achieved by falling costs, demand, and sale prices created a relatively small impact on Southeast Asian livestock sectors. In fact, the long term trend for the industry (suppliers, growers, processors, and exporters) is quite positive, owing to the region's growing economy, resilient demand, strong domestic markets, and large animal production sectors. Also, currency undervaluation can be a potent tool for promoting exports in East and Southeast Asia.
Over the years Southeast Asians have been working to improve animal performance by overcoming identified constraints to animal productivity through technological enhancements and conservation of genetic diversity amongst indigenous livestock populations. This helped maintain the long-term productivity of major livestock and crop–livestock production systems typical of developing regions, which translates to increase food security and economic welfare.
The Food and Agriculture Organization of the United Nations (FAO) believes that there are opportunities for smallholders, particularly mixed crop-livestock farmers, to continue increasing their productivity and improve their access to the rapidly expanding livestock product markets. The greatest threat to the livestock sectors are diseases. In response, FAO is working to enhance prevention of transboundary animal and animal-related human diseases in partnership with the World Organisation for Animal Health (OIE) and the World Health Organization (WHO).
Similarly, there are opportunities for climate change adaptation and mitigation measures in animal production and associated land use. These actions can help dissuade criticism from social circles. While many argue that a transition to environmental stewardship will be difficult if not impossible, it is hard not to be impressed by the aggressiveness and flexibility of the livestock entities operating in this Asian region. The consolidation of the livestock sectors in Southeast Asia may help bring these changes faster, as they adapt to evolving, monumental market forces.