Livestock and Livelihoods
Smallholder production remains the predominant enterprise model in global agriculture, largely because of the large number of household farms in low income countries. Two salient challenges for these rural smallholders are risk and vulnerability. Because they are predominantly poor, smallholders are also more likely to experience adverse external shocks than higher income groups. In response to this, smallholders have developed strategies for (ex ante) risk management and (ex post) risk coping.
Livestock can contribute to risk management in many ways. Livestock are complements for labour and capital, and thereby can offset variations in labour/capital availability. With respect to labour, livestock can also act as a substitute. This is extremely important when managing risks arising from labour markets, where seasonal demands may draw workers to higher value temporary activities, and with migration, when family members may leave their household for extended periods. Given livestock reproduce, they also constitute an asset which can appreciate even when prices are stable. Also, timing to realize asset value can be more flexible than for many other agricultural products.
Another important capacity for the poor is risk coping, i.e. dealing with shocks ex-post by reducing variability in consumption in spite of income fluctuations. Here too, livestock offer many advantages. Livestock are generally more adaptable to environmental shocks than crops. They are mobile, which increases survivability and may also be relatively omnivorous, and thereby able to survive dramatic effects on specific feed resources. Native animal varieties in particular are adapted to local environmental risks and use natural resources efficiently. Finally, the provision of food, e.g. milk and eggs, by livestock provides nutritional insurance and consumption smoothing opportunities for households.
For all these reasons, livestock can actually increase survivability of poor people having access to livestock, by, to a significant extent, transferring risks to their animals.