Part II
Regional Survey Report

1. REGIONAL SURVEY REPORT ON ANIMAL FEED RESOURCES IN ASIA AND THE PACIFIC¹

J. R. Simpson²

INTRODUCTION

Development of the livestock and feedstuffs industries in the 12 countries responding to a regional survey undertaken by the APO in 1985 has progressed rather erratically due to a variety of both endogenous and exogenous factors. For example, price fluctuations on both the input and output sides have conspired to occasionally retard development. Government policies have had similar effects in many cases. But, despite all of the difficulties, all 12 countries (termed the “region from this point on) now seem to have a solid base for development of these two industries. Each country has its own particular problem and constraints, hence it is difficult to generalize about solutions. However, a review of individual country experiences does provide valuable background to evaluate needed directions.

A major purpose of this summary report is to highlight individual country differences in animal production and feed utilization. Another one is to provide feed balance sheets for the countries surveyed and to provide a regional type analysis of feed supply and utilization. A last objective is to draw conclusions at the regional level about the livestock and feedstuffs industries. A first step is to examine the past, current and future demand for livestock products.

¹ With particular reference to 12 of the 17 member countries of the Asian Productivity Organization that participated in a regional survey on the same subject.

² Professor, Food and Resource Economics Department, University of Florida, Gainsville, Florida, U.S.A.

DEMAND FOR LIVESTOCK PRODUCTS

Livestock and feed grain production is heavily affected by shifts in consumption patterns as well as population growth. Per capita data presented in Table 1 indicate that beef and veal consumption generally declined in the low-income countries from the early 1970s to 1984, but grew substantially in the high-income ones. The declines are largely a function of expanded use of mechanized power (beef and swamp buffalo meat are mainly a by-product of draft animals in low-income countries), and population growth which has largely taken place among the low-income groups that were not traditionally beef (and swamp buffalo meat) consumers. Per capita consumption of pork increased at least slightly in all countries surveyed, and substantially in many, despite widespread taboos on consumption of this product.

Poultry meat consumption doubled or tripled in most countries. Milk consumption increased moderately in most countries surveyed although it actually declined in Fiji and the Philippines. Egg consumption about doubled in most countries even though it declined in the Philippines. Per capita consumption of fish, an important food for many people, about doubled in most countries for which data is available.

A multitude of demand side projections could be made based on various econometric and statistical techniques. However, due to lack of data a simulation approach is taken in which historical per capita patterns are analyzed and two projection parameters delineated. These form the outside bounds of “small growth” and “moderate” growth scenarios (Technical Appendix, Note 1). Per capita parameters are multiplied by population projections to arrive at total consumption estimates. The purpose of the simulation approach is not to forecast total consumption but instead to provide an understanding of the extent to which the demand for livestock products might grow in the countries and to use it as a basis for animal feed requirement evaluations.

Historical and projected population data (Table 2) show the rapidity with which population has grown and will continue to expand. For example, population in the region grew 12 percent from 1970 to 1975, 24 percent to 1980 and 36 percent to 1984. By 2000, just three decades after the base year of 1970, it is expected to reach 1.7 billion people. This is a 72-percent increase from the 963 million recorded in 1970. The growth from 1984, (the current year in most tables) to 2000 is 27 percent, at which time the region will gain an additional 346 million people.

Per capita livestock product consumption parameters for the year 2000 (Appendix Table 1) have been multiplied by population projections in order to arrive at total consumption estimates, by commodity and country (Appendix Table 2). Then, the country totals have been aggregated in Table 3 in order to arrive at regional estimates by commodity. Milk, pork, and goat and sheep meat are expected to increase by about a third each under the small growth scenario and 41–43 percent under moderate growth. The largest gainer is poultry and eggs. Poultry consumption is projected to increase somewhere between 63 and 100 percent while egg consumption is projected at 50–159 percent. Beef, swamp buffalo meat and veal, as a group, are expected to increase between 50 and 75 percent. Much of the expanded growth in beef consumption will be from culled dairy animals, i.e., a joint product of expanded milk production.

The demand situations have substantial implications as they provide information about the type of feedstuffs which will be in greatest demand. These implications will be examined more fully later the when balance sheets are discussed. Prior to this, background data is needed on the animal industry structure.

Table 1. Per Capita Consumption of Livestock and Fish Products, Early 1970s and 1984, APO Survey Countries

(Unit: Kg)

Note: ^a Includes buffalo meat.

Table 2. Human Population, APO Survey Countries, 1970–2000

(Unit: In millions)

Source: United Nations, 1985.

Table 3. Total Consumption of Livestock by Commodity, APO Survey Countries, 1970–84*

Note: * See Note 1, Technical Appendix. Totals are obtained by multiplying per capita consumption data in Appendix 1 by population in Table 2.

TRENDS IN ANIMAL POPULATION AND PRODUCTION

Livestock inventory for 1970 and 1984 in the 12 countries responding to the survey is given in Appendix Tables 3–8. A summary for all countries in the region is provided in Table 4. There were a total of 2.3 million head of horses in 1984, a decline of 0.4 percent annually, from the 2.4 million head recorded in 1970. A major reason is inventory reductions within the developed countries where horses are now seldom used for draft purposes. Even developing countries such as Indonesia and India reported declines, also the result of shifts to mechanized power.

Sheep numbers in the region grew 1.2 percent annually during 1970–84, from 60.2 million head to 71.2 million head. Much of the increase took place in Pakistan which follows India as having the largest flock size. There were increases in all countries except Japan.

Goat inventory increased substantially in the region, from 94.3 million head in 1970 to 127.4 million head in 1984. This is an annual increase of 2.2 percent and is the largest growth of all species detailed in Table 4 except poultry (4.8 percent) and swine (2.6 percent). Declines in goat inventory took place in Japan, Singapore, Peninsular Malaysia (P. Malaysia) and Sri Lanka.

Cattle inventory increased 0.4 percent annually in the region during the 1970–84 period, from 212.2 million head to 223.9 million head. Increases took place in all countries except the Republic of China and Singapore, countries which have become quite urban. The larger increases, about 4–6 percent annually, took place in Fiji, the Republic of Korea and Peninsular Malaysia. Dairy cattle numbers in the Republic of China grew 12.6 percent annually from 1970–1984.

Swamp buffalo population increased 1.1 percent annually in the region with uneven changes by country. The largest increase (2.2 percent) took place in Pakistan while the greatest decrease was registered in the Republic of China (-10.3 percent). Overall, numbers have fluctuated in response to mechanization. For instance, if there were no substitution of machinery for draft power, swamp buffalo numbers would probably have increased about the same as human population in the region, which increased 2.2 percent annually between 1970 and 1984.

Mechanization of farm and transport activities, of major importance to Asia, seems to be directly related to the level of economic development and rate of change in the process. It is also related to type of agriculture. For instance, mechanization took place in Japan in a very short time, with much of it occurring during a 5–10 year period in the late 1950's and early 1960's. A similar process has been taking place in the Republic of Korea.

In contrast to Japan and the Republic of Korea where the mechanization process took place in virtually the entire country, there is a distinct difference in the Philippines between regions. For example, there is much mechanization in irrigated areas which have relatively little weather risk, and need for quick cultivation, planting and harvesting due to a tight schedule between crops. But, on marginal rainfed lands where low value crops predominate, risk is high and returns low, draft animals provide the major source of traction. Some regions and countries in the study meet the criteria for mechanization, but low output prices and thus low net returns preclude adoption of this technology. In other regions there is limited adoption of mechanization because crops are consumed rather than sold, hence so little cash is generated to pay for purchased machinery.

Swine inventory increased 2.6 percent annually from 1970–1984, but with small decreases taking place in the Philippines, Singapore and Sri Lanka. In the Philippines it was mainly for economic reasons, in Singapore due to urbanization and in Sri Lanka as a result of religious traditions.

Poultry numbers grew the most among the species in the region, about 4.8 percent annually. There were increases in all countries except the Philippines (which registered only a marginal decrease). The poultry industry is relatively easy to expand as it is the most amenable to factory type growing and processing conditions. It is clear that while much of the increase took place in backyard or village type flocks in harmony with rural population growth, much of the expansion took place in large scale commercial type operations. The Republic of China, which was one of the region's leaders in commercial flock growth, saw poultry numbers grow 8.4 percent annually.

There are some problems with picking two end points (1970 and 1984) on which to base the annual percentage increases, but the tables do provide some general guides about trends. Overall, they show that as countries in the region have developed there have been declines, or at least relatively small increases, in inventory among animals used for draft while swine and poultry numbers increased substantially.

Livestock plays a pivotal role in the national economies of many Asian countries. For example, cultural life in India is, in many ways, intimately associated with livestock. Farms with ruminants are very small and there are very few with more than 20 head. But, there are about 26 breeds of cattle and 7 of swamp buffalo, many of which now form an integral part of livestock breeding programs throughout the world. Furthermore, there are nearly 30 breeds of sheep and 18 breeds of goats in India. However, poultry raising, to a large extent, and pig raising, to a smaller extent, have increasingly become characterized by commercial operations which depend on exotics.

The Republic of Korea's livestock and feed industry has developed quite rapidly based, to a large extent, on import of breeding stock. However, such imports have led to periods of oversupply and introduction of diseases, especially in poultry. Two difficulties this country faces are: i) how to balance expanding per capita consumption of livestock products (as a result of improved GNP per capita) with development of the livestock industry; and ii) how to cope with demands of international trading partners to import more agricultural and livestock products from them in response to expanded manufactured goods exports.

Sri Lanka is a country of very small producers in which dairy and poultry are the most popular and concentrated animal husbandry activities. For example, 20 of the 25 foreign funded livestock development projects since 1975 deal with the dairy industry. The poultry industry, especially large-scale egg production, has grown rapidly over the past 5 years. The swamp buffalo is still the main source of draft power. Both cattle and swamp buffalo numbers have grown slowly due to low farm gate prices, declining availability of natural pasture and government policy on animal slaughter. Growth in demand for livestock products is constrained by religious and cultural norms.

Nepal is characterized by the use of swamp buffalo and bullocks for draft power, and a semi-sedentary animal system. In the summer excess cattle and swamp buffalo are moved to high altitude areas for grazing with a primary function at that time being ghee production. Sheep and goats, mainly kept for wool and meat, are also shifted back and forth from high to medium altitude areas depending on the season. Grazing is the main source of feedstuffs for ruminants with only the swamp buffalo being stallfed. About 90 percent of these bovines are raised in a backyard system. At the opposite extreme is Singapore, a very small, highly urbanized island country where animal husbandry activities are mainly confined to raising swine and poultry for local consumption.

An overview of other countries and livestock systems could be provided, but these examples are sufficient to demonstrate that the livestock and feed industries do develop in response to a multitude of individual needs and conditions. A review of the various country reports shows that while numerous problems do exist, many of them can be mitigated by a concerted regional effort. These constraints and prospects are summarized in the last section.

FEED SUPPLY FROM CULTIVATED LAND

Cultivated land varies from a low of 8.6 percent of total land area in Singapore, to a high of 51.4 percent of all land area in India (Table 5). All other countries have between 11 percent and 33 percent of land area under cultivation.

Cultivated lands are an important source of both roughage and energy feedstuffs for animals. The makeup and amount depend on population density and ecological conditions as well as type of livestock system. In virtually all countries rice paddy residue is either an important feedstuff or has the potential to be much more efficiently utilized.

Table 4. Summary of Livestock, APO Survey Countries, 1984

Note: ^a Figures for Fiji refer to 1968 while those for Japan andSingapore refer to 1971.M
^b Less than 1,000 head.

There are a wide variety of cultivated land use practices which relate to livestock. For example, farmers in the higher altitude areas of Nepal preserve root crops like potatoes and turnips to feed yaks during the winter. Because of rapid human population growth, former grazing land is rapidly being shifted to cultivation. Nepalese farmers utilize relatively small amounts of straw from small grains for livestock feed as it is used instead for fuel and roofing. However, the major source of straw, from rice, is used for feed as well as other purposes.

Crop residues in the Republic of China are presently little utilized as feed for several reasons. First, as agriculture has become commercialized recovery costs have become prohibitive vis-a-vis grain as a feedstuff. But equally important is their lack of knowledge regarding their suitability for feed use. The government has concluded that price measures and other incentives may be necessary to encourage greater use of crop residuals and by-products.

The present fodder production in Pakistan is reported to be far from satisfactory. Major limiting factors are outmoded crop varieties resulting in low yields, and cropping patterns which do not result in continuous annual supply. In addition, virtually no fertilizer is used. This is reflected through lack of an effective research and extension program fodder production.

The demand for food and commercial crops has resulted in a continual decline in India's permanent pastures and meadows. However, expanded cropland has led to a greater supply of crop residues, a major source of roughages for Indian livestock. Nevertheless, even though crop residues are in short supply, the materials are not effectively utilized. As an example, there is much waste by feeding as whole straw rather than by chopping (cutting into small pieces). Also, there is very little use of improved practices such as ammoniation, ensiling, supplementation with leguminous fodders, enrichment with deficient nutrients, etc.

About 35 percent of Indonesia's feed supply comes from grass, 50 percent from crop residues and 15 percent from green forage. Some research has been carried out on the use of NaOH, urea and molasses as a means to improve crop residues. But inexpensive technologies in use of cultivated crop commodities remain a problem.

Energy feed supply from paddy and maize in the Philippines has remained low. However, cassava has increasingly been produced and used as a feedstuff. A major problem is that rapid human population growth and dependence on small farmers has prevented the development of surplus feedstuffs production for animals.

The government of Sri Lanka has expended considerable effort to expand the use of “ipil-ipil” (Leucaena leucocephala) leaves. In fact, apart from it, no fodder crops are grown purposely for animal feed. Another government programme is subsidies to grow pasture under coconut trees. Many tree crops on cultivated lands have the potential to be utilized as animal feeds, but they are underutilized. Recent irrigation and land settlement is affecting feed supply by causing severe deforestation.

Fiji farmers do not grow fodder crops of any type for livestock feed due to availability of fresh forages most of the year. But efforts are being made to introduce various leguminous plants to improve pastures. Sugarcane is grown in large quantities, but only a fraction of it, or by-products such as cane tops, are used for feed. Very little grain, pulses or crop residues are fed to livestock. At present there does not seem to be any economical way to better utilize crop residues for livestock due to small farm size and their scattered location. There is little scope to expand land area for fodder crops, as free hold land is tied up in large estates and crown (government) land is leased.

Peninsular Malaysia has four major crops, rubber, oil palm, coconut and rice. There has been an effort to expand fodder crops in response to expanded need for green feeds, but production from them for livestock remains negligible. Paddy produces the most crop residues but, even there, only about one percent of straw is used for feed. The remainder is burned for fertilizer. It seems that sugarcane is the most appropriate crop to increase biomass yield. It may be concluded that while cultivated crop land has not grown appreciably in the region, much better use has been made of it in the past decade and a half. In some countries such as Japan and Singapore cultivated crop land is a constraint on growth of their livestock industries. In most other cases crops or residues could be extracted to a greater extent for livestock use. The major inhibiting factor at this time seems to be economics and technical know-how.

FEED SUPPLY FROM PERMANENT PASTURES, ROUGH GRAZINGS AND OTHER SOURCES

The region has 33.1 million ha of permanent meadows and pasture (Table 5). This accounts for about 4.5 percent of total land area. This utilization classification ranges from a high of 14.0 percent in Nepal to a low of 0.0 percent in Singapore. Sri Lanka has 6.7 percent in permanent meadows and pastures, while the Republic of Korea has just 0.8 percent. These countries also have relatively low ruminant animal populations.

India's permanent pasture and other grazing land covers 12 million ha, approximately one-third of all such land in the surveyed countries. But, while grazing provides much of the roughage for ruminants, grasslands are in a deteriorated condition due to decades of overgrazing and neglect. The situation is so serious that improvement of grasslands has generally been considered impractical.

Rangeland in Nepal occupies the major portion of high elevation areas, but much of it is relatively inaccessible due to lack of stock trails. Most grassland is in the public domain.

Stocking rates, which are relatively low, could be increased by adoption of rotational grazing, partial or complete reseeding, and use of improved cultivars. Fodder trees also offer great potential. Leucaena has recently been introduced and is quite popular. The government has proposed in the new five-year plan that at least 25 percent of saplings used in reforestation programmes be fodder type.

Table 5. Land Utilization, APO Survey Countries, 1984

Source: FAO Production Yearbook, 1986.

Forages are the main source of feed for livestock in Pakistan, providing 60 percent of feed requirements for sheep and goats, 40 percent for horses, donkeys and camels, and 5 percent for cattle and swamp buffalo. But due to overgrazing, rangelands are only producing about 10–15 percent of their potential. Fodder trees are important in irrigated areas.

There has been very little planned improvement in the Philippines' pasture areas for livestock production. Larger producers are mainly engaged in cattle production on leased pastures and have little incentive to improve them.

Fiji's pasture lands are widely overgrazed. But while there is immense potential for improving of them, costs are prohibitive. Leucaena has been introduced but has not been widely adopted, perhaps because in their experience it is slow to establish.

Peninsular Malaysia's pasture resources are limited. However, integration of ruminant livestock, particularly sheep, is being promoted into areas of plantation crops where vast expanses of undergrowth vegetation provide suitable green feed. It is estimated that if just 25 percent of available output were used for forage, coconut land could yield 58,000 additional ha of grazing land; oil palm, 275,000 ha; and rubber, 423,000 ha.

Indonesia, much smaller than India in total land area, has almost the same amount of permenant pastures.

It can be concluded that feedstuffs availability is heavily dictated by ecological conditions. Most all countries must--or at least choose to -- import feed grains. One major reason is that grass, pasture and forages generally cannot compete with food crops for land utilization. However, virtually all the countries have some plan to improve grazing land. In some of them, such as Sri Lanka, permanent pastures are reserved for common grazing and public purposes. This is one reason why stall feeding has become a characteristic of wet tropical Asian countries. Another is nearby availability of feedstuffs. Examination of several other country's experience with pasture use shows the wide variability in pasture utilization and problems associated with them. These problems will be difficult to overcome due to the high cost of pasture land and low benefit-cost ratios of most pasture improvement practices.

FOREIGN TRADE IN FEEDS AND FEED MATERIALS

Feedstuffs imports, exports and balance by type of feedstuff for each country in the region are given in Appendix Tables 9–20. Feedgrains make up 59 percent or more of imports in all countries except by Indonesia ( 9 percent); P. Malaysia (52 percent); Singapore (50 percent); and Sri Lanka (which imports a very small amount of maize). Oilseed cake and meal are the primary commodities in these cases.

In the case of Japan, 100 percent of maize, sorghum, barley, wheat, rye, oats, skim milk and bone meal used in animal feeds was imported in 1985. In addition, 13 percent of the wheat bran, 5 percent of soybean meal, 7 percent of fish meal, 67 percent of molasses and 59 percent of feather meal was imported.

A summary of feedstuffs trade during 1984 in both local currencies and 1,000 U.S. dollars is provided in Table 6. The largest imports, as measured in US dollar terms, were by Japan ($3.1 billion) followed by the Republic of China ($1.1 billion), and the Republic of Korea ($643 million). P. Malaysia and the Philippines followed with $306 million and $267 million, respectively. All countries except India and Nepal had trade deficits in feedstuffs related commodities.

A summary of ratios between imports and exports is given in Tables 6 and 7. The Republic of Korea imported $473 worth of feedstuffs for every dollar of feedstuffs exports in 1984, while the ratio was 242.0 to 1.0 for Fiji. But the other countries, apart from the Republic of China and Japan, had ratios ranging from 0.31 (Nepal) to 5.95 (Philippines) except for P. Malaysia which had a ratio of $22 in imports for each dollar of exports. The average for the region was $36.22 of feedstuffs imports for each $1.00 of feedstuffs exports. The ratios are quite useful as a quick guide in determining of the impact imports have on the livestock industry. For example, Japan is very dependent on imports while Nepal and Sri Lanka are relatively self-sufficient in the sense that feedstuffs imports and exports about balance. Singapore, which must import virtually all of its primary feedstuffs, has a ratio of 1.67 because it is an exporter of higher value processed feeds.

Nearly all countries reported a problem concerning imports of animal feeds vs. stimulation of local production. Naturally, feed millers lobby for low duty imports and no quota as a means to expand their formula feed sales. But while immediate needs can be met this way, that action stifles domestic production since local farmers are generally not cost-competitive. Some reasons are relatively high input costs, low yields and high marketing expenses.

In the Republic of China, a rapid, expanded demand for livestock products has necessitated tremendous growth in feedstuffs imports. Total feed imports amounted to $170 million in 1970 and rose to $1.1 billion in 1984, a six-fold increase over a 15-year period. A price stabilization fund called the Small Grains Deficiency Payment, established in 1971, had as an objective of securing an uninterrupted supply of foreign grains. But an additional objective, which has worked out very well, has been the encouragement of domestic small grain production, improvement of farmland utilization, development of feed related industries, and acceleration of livestock production. The organization of this fund has much relevance for other countries in the region.

Another import-related concern reportedly facing several of the countries is tax concessions and reduced duty imports for just a few selected organizations. The problem is that special privileges are given to one or certain companies which then provides them a competitive edge. A related major question which needs to be addressed, but apparently has only been resolved in one or two of the 11 countries, is the extent to which each one should be self-sufficient in animal feedstuffs. For example, Nepal's strategy is to be self-sufficient in feedstuffs except for fish meal and minerals.

Pakistan has virtually no foreign trade in feeds and feed materials except import of some protein sources like fish meal and minerals. Singapore, on the other hand, is unique in using virtually all imported raw materials.

Indonesia has been trying to improve the competitive climate in animal feed trade, especially on the import side. One objective is to stimulate competition while another is to protect domestic crop producers. But animal feed imports, especially protein sources, will have to be expanded and that may cause balance of payments problems.

The Philippines has been, and continues to be, a major importer of animal feedstuffs. There is some export of feeds, especially copra, molasses and dried, pelleted ipil-ipil (Leaves). But overall, there is a substantial trade imbalance in feedstuffs.

About 90 percent of P. Malaysia's animal feedstuffs are used in pig and poultry rations. These two areas are expected to continue growing as it is unlikely that much expanded output will take place in grains. Thus demand for imports will continue to grow. The large and efficient poultry and swine production subsectors have grown rapidly over the past decade largely in response to free access of feedstuffs imports. P. Malaysia's national agricultural policy, announced in 1982, encourages free access to imports of feedstuffs. Protective tariffs are only imposed on items that are widely produced in the country such as fish meal and rice bran.

A correlation between per capita income and imports of feedstuffs from 1965–1985 was run on three of the countries with dense populations (Japan, Rep. of Korea and Singapore) and one with a medium dense population (Malaysia). Maize imports were used as a proxy for feedstuffs imports. Added to this was maize equivalents of imported meat using a ratio of four kg of maize per one kg of meat. The correlation coefficient for the high density countries was 0.89–0.98 while it was 0.92 for Malaysia, i.e., indicating a very high degree of relation between income growth and imports of feedstuffs. The point of the analysis is demonstration of the principle that greater feedstuffs imports can be expected as per capita income grows.

Overall, it may be concluded that the region imports substantial amounts of animal feedstuffs and that even greater imports would take place if foreign exchange were available. On a regional basis, there was $36.22 of imports for every $1.00 of exports.

Table 6. Feedstuffs Trade, 11 APO Survey Countries, 1984

Source: FAO Trade Yearbook.

Note: Equivalent in US$ except Japan, Indonesia, Nepal, Singapore, which in 1,000 Currency Units. A 1 means the local currency units are in US$.

* Near Zero.

Table 7. Ratio of Imports Per US$ of Exports, 12 APO Survey Countries

(Unit: US$1,000)

* Near Zero.

BY-PRODUCTS AND NONCONVENTIONAL FEED RESOURCES

There are substantial differences in the use of by-products within the 12 countries, much of which is not captured by reported statistics simply because the commodities used are so specialized. Those specialized ones not generally traded are called non-conventional feed resources (NCFRs). The more common agro-industrial by-products such as rapeseed oil cake, cottonseed oil cake, etc. are usually traded. There is a “gray” zone for some by-products such as rice straw which is a common conventional by-product but which is not traded. Rice straw, like other non-traded commodities, is usually termed an NCFR.

Rice straw is a major agricultural residue throughout the region. In Sri Lanka, it accounts for 76 percent of available fibrous crop residues. But only about 2 percent of that country's rice straw is actually utilized as animal feed. A programme is being launched to popularize urea-treated straw as an animal feed. In Pakistan, on the other hand, straw which is mainly from coarse grains, is widely used as animal feed except for a small proportion which is diverted to the packing and straw board manufacturing industries.

Rice bran is a very valuable by-product which can provide a major, locally-produced energy supplement source in concentrated feeds, especially for poultry and swine. But in most of the countries surveyed, outmoded mills are a major obstacle to extraction of high quality bran. Some countries, like the Philippines, have witnessed an increase in rice bran utilization among backyard swine producers who use it to reduce cost of commercial formula feeds.

Tea waste is another product which is produced in several of the countries. But, even though it is rather plentiful in Sri Lanka, and can be used up to a 20-percent level in concentrates for calves and cattle, and 15 percent for broilers and pigs, it is not presently being used in animal feeds.

Rubber seed meal can be effectively used as animal feed but is seldom incorporated. The problem in Sri Lanka, for example, is decortication technique.

Coconut cake meal (poonac) plays a major role as animal feed in the wet tropical countries, but is relatively high-priced and the quality is usually quite low. It is also subject to seasonal fluctuations. Another problem is collection cost due to small quantities per farm and widely scattered production areas. Countries like P. Malaysia which have large coconut plantations export most of their coconut cake meal. It is a major ingredient in Sri Lanka's concentrated feeds.

Ipil-ipil leaves have rapidly become an important feed source in several of the countries surveyed. One reason is it can be planted along fences or as shade trees without much extra effort. It is fair to say that this feed source has been one of the most widely spread innovations in the region over the past decade.

Slaughterhouse waste such as bones and blood are good nutrient sources for animal feeds, but are wasted in most of the survey countries due to absence of proper collecting systems. In some countries substantial improvement has been made in the past few years as modern, large-scale slaughterhouses have been erected.

Chicken feather meal, poultry litter and slaughter house waste are protein-rich feed ingredients which are sub-optimally utilized in most countries.

Fish waste from trimmings is very high (30–60 percent) in protein. One source mentioned, but which has not been properly tapped, is local fish stalls. A drawback is high collection cost. But it seems that this cost disadvantage can be overcome in some places by an incentive programme to individual entrepreneurs.

Brewery and distillers grains make excellent animal feedstuffs but, in general, are underutilized or used improperly in the survey countries. For instance, spent distillers grains are totally unused by the livestock and poultry industry in Sri Lanka.

Fruit waste, especially from canneries, has good prospects for use in animal feed but is currently underutilized. Some examples are pineapple, mango, passion fruit and ripe jack-fruit. Mango seed kernel can be used up to 40 percent in concentrates for cattle and up to 15 percent in broiler rations. The Philippines grows substantial amounts of pineapple and has utilized waste in cattle fattening for years. Improved processing and storage systems are expected to increase utilization of this NCFR for both ruminants and monogastrics. But at present, while almost all tropical fruits are grown in the warm moist countries like Sri Lanka, they are generally just abandoned.

Molasses is an important feedstuff in some countries but hardly utilized in others. For instance, a major portion of available molasses in Nepal is used for animal feeds. A part of molasses is used for alcohol manufacture. But in Pakistan very little molasses is used because producers consider it injurious to animals.

Sugarcane and other crop residues have great potential for use as ruminant animal feedstuffs. One major area that could be explored is feeding sugarcane residue to feedlot cattle. New plantations of sugarcane will be opened in the late 1980s in Sri Lanka and thus offer this possibility in that country. A problem is that while it also appears that many of the countries surveyed indicated crop residues to be in short supply, these crops are not effectively utilized. India is an example in which many crop residues, especially paddy straw and other cereal straws, are wasted because they are fed whole rather than in a chaffed or chopped form. India is similar to virtually all the low income countries wherein little use or encouragement is being done to improve low quality fodders by chopping, ammoniation with urea, ensiling, supplementation with leguminous fodders, enrichment with deficient nutrients, etc.

Peninsular Malaysia is an example of a country in which the only realistic possibility for expanded feedstuffs production is from by-products and NCFRs. However, while research has been carried out which indicates suitability of some materials for feeds, these results are from short-term feeding studies. Thus, there is an obvious need for longer term feeding trials and economic analysis of results. In addition, low protein content and high fiber limit most of P. Malaysia's by-products and crop residues for use by ruminants. But since about 90 percent of formula feed is for poultry and swine, there is little interest among feed millers to use by-products and NCFRs. Thus, it seems that research needs to be carried out on the use of these NCFRs and by-products as fertilizers, bedding, mulch, papermaking, and strates for microbial growth and as fuel.

There is wide variation in the use of by-products and NCFRs within the region. For example, very little use is made of them in Pakistan, while Fiji fully utilizes them (with the exception of molasses). One reason given is that the extension service is a limiting factor in expanded and more efficient use of agro-industrial by-products. The technology is generally known but there is a paucity of economic analyses on-farm trials and knowledge among extension personnel.

Overall, it seems that economics is the leading question to be answered throughout the region regarding expanded NCFR use. The next constraints are lack of technology dissemination among countries, few economic analyses and little dissemination of information to producers. Primary research on technological development is needed but is a relatively low priority. There are some projects which could begin with relatively little effort such as on-farm feeding trials utilizing various NCFRs and by-products.

FORMULA FEED INDUSTRY

Substantial expansion has taken place in the formula feed industry in the region since 1970, and especially during the past decade. As of 1984 there were 7 government feedmills in the region, 111 cooperative feedmills and 749 private feedmillers (Table 8). This represents 1, 13 and 86 percent of the 867 mills in the 12 countries, respectively. The overwhelming number of private feedmills in every country attests to the recognition that feedmilling is best carried out in the private sector. Furthermore, it may be concluded that most cooperative feedmills operate much like private sector mills, albeit with more owners. Thus, it may be concluded that 99 percent of the region's mills are of a private nature.

There are a multitude of problems in the feedmilling subsector. Some are common to several countries while others are specific to others. For example, consider the Rep. of Korea which has 79 mills, of which 29 have a production capacity of 10,000 tons or more per month. The bulk of production is mash type feeds. There is a lack of liquid storage and handling facilities which precludes optimal use of molasses, fats and oils but new mills are being constructed with computerized systems and capacity to handle all types of feed ingredients.

Capacity use is a concern in many countries. For instance, Sri Lanka's mills only run at about 50 percent of capacity. One problem shared by all countries except Japan and the Republic of Korea is the relatively small size of the feed milling industry in any one region. Thus, when a new company enters the market, it can and often does cause serious problems for existing firms.

Feed mills in Pakistan are operating at less than capacity. Furthermore, manufactured feed is of poor quality and below standard largely, due perhaps to lack of legislation and control. One problem is sale of feed on credit which results in periodic financial problems for both producers and manufacturers.

The Philippines' formula feed industry is extremely sensitive to supplies and ingredients in the world market due to heavy dependence on imports. That in turn is exacerbated by shifts in import policies. Another problem is unstable domestic supply and great quality variation in locally produced ingredients. Least cost ration formulation has not been effective and, as a result of the above factors, output quality is variable.

Fiji is heavily dependent on grain imports, animal and plant protein for feedstuffs, and vitamins and minerals. This trend is expected to continue despite some import substitution strategies such as plans for a dry rendering plant to convert poultry feathers and offal into poultry feed. There is a complete ban on imports of prepared feeds, but no restrictions on types and quantities of primary feedstuffs. The import ban on formula feeds has resulted in Fiji's feed industry growing over the past decade, but in concert with demand. As such, large mills are operating at about 75–80 percent of capacity and small ones are 100 percent utilized. Formula improvement has taken place reasonably well as the industry is serviced by foreign technicians. Premixes are imported and companies selling them work in feed formulation.

The Malaysian government has encouraged growth of the formula feed industry through free access to feedstuffs and tax concessions. A generally efficient and modern industry has evolved, but absence of proper legislation has resulted in variable quality as excess competition has led to cost reduction at the expense of quality. In addition, there is wide variability in facilities and management. About 55–60 percent of locally produced and traded materials such as rice bran, fish meal and tapioca refuse are being incorporated but this represents only 30 percent of the total ingredients used in feed manufacture. Quantities and quality are variable. They are also generally higher priced than imported materials.

India's formula feed industry, just like the situation in all other survey countries, has primarily developed over the past two decades. Also, like other experiences, rapid progress is now being attained in improving products by many means such as the use of computers to formulate least cost rations. But low utilization of installed capacity is a major problem in India primarily due to lack of effective demand by farmers. From the millers' viewpoint, feedstuff availability is a continual problem. For example, most state governments give priority in molasses allocation to industries other than the feed industry.

Quality, wide variability and seasonality in purchased feedstuffs is a chronic problem facing the feed milling industry in all countries in the wet tropical zone as changes are required in feed formulations. Also, small quantities, lack of storage facilities and transportation constraints contribute to quality problems. A further obstacle is trouble in pricing purchases based on quality. Finally, fluctuations in ingredients leads to variability in the final product.

It may be concluded that on a regional basis the feed milling industry has developed rapidly and in concert with demand. In fact, excess capacity seems to be a larger problem than lack of facilities. It appears that the principal requirement is to stimulate demand and effective utilization of formula feeds as well as to improve feed mill efficiency and product quality. That, in turn, means greater attention to improving the quality and availability of raw materials.

Table 8. Feedmill Ownership, 12 APO Survey Countries, 1984

GOVERNMENT POLICIES AFFECTING THE ANIMAL AND FEED INDUSTRIES

Government policy can be a stimulant or deterrent to development of the livestock and feed industries. Unfortunately, many governments in the region have attempted to over-legislate, over-control and over-plan. In effect, rather than stimulating competition and preventing undue competition, they often have the opposite effect. Another problem area is misguided policies which seem to have merit from a national planning perspective, but those often have negative effects or ones opposite from those intended. For example, Sri Lanka has banned the slaughter of swamp buffalo and cows in an attempt to expand inventory. But, the unintended result is reduced calf crops due to expanded numbers of infertile females.

Government intervention in pricing is a theme frequently mentioned directly or indirectly as a problem area. The reasons for intervention are numerous and often well founded. The difficulty is supplies and demand of the numerous inputs and outputs are continually changing -- often radically. Thus, price relationships easily become distorted. Then, if there is no mechanism to reallocate supplies (as typically happens under rigid planning situations) shortages inevitably occur.

Research on livestock and feedstuffs is carried out in all the survey countries. Hundreds of trials have been run and results from a multitude of studies are available on specific ingredients. Yet, research is generally not being translated into production expansion and cost reduction. Why? The frustrations are well articulated in several country reports such as the one for Sri Lanka in which the correspondent writes that a missing link seems to lie between research and extension. One reason is that most of the research findings are confined to the libraries or the academic circles. Furthermore, extension programmes are not geared to cover the area of feed ingredients. Much the same theme is echoed in Pakistan, although that country's correspondent states that the government is taking initiatives to carry out action programs on feed resources and use. Also, measures have been initiated to prevent adulteration of feeds. Although an extension service program has been initiated, it seems to have failed due to administrative problems.

Indonesia has developed strong policies to create an appropriate business atmosphere through price management and control, and incentive programmes. They are also increasing the national animal health services and supervision (i.e., control) on productive dairy cattle slaughtering. However, development is slow in coming.

Government policy in India toward the livestock sector is complicated by the country's vastness, political and ethnic diversity and range of livestock systems. On the negative side poultry feed manufacturing has been targeted for small producers rather than using it as a development tool for commercial size-development. Import duties are very high on amino acids in India; about 130 percent compared with 5–10 percent in most other countries. Some states levy very high taxes on formula feeds. No laws have been enacted on feed quality so that adulteration and marketing of inferior quality formula feeds is common. In addition, no attention has been given to coping with the significant seasonal price fluctuations. Finally, no organized long-range scientific work has been initiated by experiment stations or universities relating to feed resources. On the plus side, the central government has been adopting measures to increase genetic potential of animals. A number of short-term projects have been set up on utilization of NCFRs.

The Philippine government has implemented price supports on some feedstuffs and provided fertilizer subsidies in an effort to expand domestic production. But it seems that until and unless the government institutes reforms on the pasture lease system, grassland utilization will not be optimized. Another major problem is that research findings only reach target beneficiaries on a limited scale. Two reasons are the extension services' bias toward crop production and, within the animal complex, emphasis on disease control programmes rather than nutrition.

Meat production in Fiji has grown over the past several years due to successful government policies such as farm input subsidies and infrastructure provision. As an example, a 40-percent subsidy is provided on pasture related items to encourage rotational grazing. Legumes and other improved seeds are given free up to a $40-value per farm limit to expand pastures. Feed milling is left entirely in private sector hands, but competition is encouraged to keep prices low.

Malaysia has set forth a national agricultural policy (1982) which sets guidelines up to the year 2000. The policy is designed to ensure balance and substantial growth in the agriculture sector. The government has played a very active role in the production of forage crops. The free market situation in feedstuffs sale and open access to imports assures adequate supplies of raw materials. Feed quality control standards have been developed and are being controlled. Research findings and information are “incredibly massive.” Much of the extension effort for livestock producers is done by large feedmill operators as well as relevant government agencies.

The Rep. of China's livestock industry has grown rapidly in response to appropriate government policy which has focused on encouragement of private investment. That, in turn, has led to technology adoption in breeding techniques, improved feed rations and animal health. Furthermore, development of a livestock insurance service has reduced producer risk in production and transportation.

The feed business in Singapore is an example of successful government policy. Partially, because Singapore produces virtually no animal feedstuffs, the price of raw materials has been governed by the supply and demand for feed ingredients. The result, along with policies to stimulate the feed industry, is that in 1986 there were just 6 feed mills, all very efficient, compared with 36 in 1970. Today, feed manufacturing is a major export business.

A hog production and marketing adjustment programme in the Rep. of China, initiated in 1980, promotes production and is in charge of adjusting supply and demand as well as preventing environmental pollution. In addition, a cattle industry policy was set forth in 1981 with primary emphasis on dairy cattle. Emphasis is on promoting both the demand and supply sides. A technology development programme concentrates on agricultural development, focusing in large part on purchase programmes.

Evaluation of government policies indicates that a major problem in virtually all the survey countries is the determination of appropriate technology and then cost effective dissemination of it. A gap seems to lie in failure to determine ex-ante which technologies will be most cost effective from the producer's viewpoint and then carrying out an applied research program based on ones which will most likely be adopted. Tied to this is the failure to bridge the gap between research and extension on the delivery side. Overall, it seems that major attention should be given to regional coordination of applied research and dissemination programmes structured around the farming system methodology. This approach is expensive in the short-term due to high survey and set-up costs, but will yield cost effective long-term results (Simpson and De Boer, 1984).