by Lovell S. Jarvis
If a sharply rising population in the developing countries is to achieve higher real incomes and a better quality of life, agricultural output must rise more rapidly than population growth. Further, if this rise in agricultural output is to be sustained over time, the natural resources which provide the basis for such output must be preserved and new technologies offering higher productivity must be developed. Increasing livestock production is an important component of this process, both because developing country consumers are expected to spend an increasing share of their rising incomes on livestock products, and because taking advantage of favourable livestock-crop production interactions is one approach to a more efficient, sustainable agriculture.
Despite the generally favourable effect which the use of livestock has on agricultural resources, livestock are also a component of several unsustainable production systems. Among the most widely cited include:
the overgrazing of arid and semi-arid lands, leading to range degradation and productivity decline,
the destruction of humid rainforests for the establishment of pastures which degrade soils and quickly cease production,
the pollution of watercourses from animal wastes resulting from intensive dairy and meat production, leading to reduced production and consumer welfare elsewhere,
the production of methane gas as a result of ruminant livestock production contributing to the threat of a global “greenhouse” effect, and
and the pollution of soils, watercourses and subterranean water supplies from the application of fertilizers, herbicides, and pesticides in the production of livestock feed grains.
Increased attention to the issue of sustainability in livestock production is important if these production systems are to be improved.
This paper is concerned with establishing a number of guidelines for optimizing livestock production in developing or less developed countries (LDCs), consistent with achieving sustainable agricultural production. The paper focuses on economic factors (the author's specialization) though it contains some thoughts on the role of political and social factors. The paper first provides an overview of recent achievements concerning livestock production in developing countries livestock production. The paper then briefly discusses how different types of livestock are used as capital goods to produce multiple livestock products, and how the total amount of livestock capital and its use is highly responsive to the economic incentives provided to producers. The paper then analyzes several of the more prominent types of government interventions in livestock markets, discussing their probable effects on economic welfare. An emphasis is placed on the need for research. Finally, several problems involving sustainability in livestock systems are discussed.
RECENT EXPERIENCE WITH LIVESTOCK IN THE DEVELOPING COUNTRIES.
Within numerous national and international agencies, including FAO and the World Bank, concern has been expressed with the progress, or lack thereof, recently observed in livestock development. What does the record show? Have efforts to encourage livestock development been successful and what are the prospects for the near future? What policy changes could improve the situation?
Consider first the evidence regarding the rate of growth of livestock output in LDCs (Less Developed Countries), both absolutely and relative to population growth. One comprehensive study notes that food produced from livestock grew more rapidly than population for most products in Asia, North Africa/Middle East, Sub-Saharan Africa, and Latin America between 1961-65 to 1973-77 (Sarma and Yeung, 1985). These results, with the exception for eggs, held for meat in all regions apart from Sub-Saharan Africa, but for milk only in Latin America. On average, the output growth rate for meat, milk, and eggs in developing regions were 2.9 percent, 2.5 percent, and 5.3 percent, respectively. Thus, per capita meat output grew about 0.5 percent per year during this period, though there were enormous variations across countries. Per capita milk output remained stagnant whilst per capita egg production rose rapidly. This record must be considered mediocre, especially since the consumption of livestock products generally rose at a more rapid rate, leading to rising imports or falling exports.
A more recent study confirmed this result for milk (Jarvis and Saha, forthcoming). Milk output in developing countries grew at a steadily declining rate from 1960 to 1988, falling from 2.7 to 2.1 percent per year. However, the rate of output growth varied significantly across geographical regions and from one sub-period to another which suggests that milk production has been responsive to changes in the incentives faced by farmers. For example, although the growth rate of milk output was low and declining in Sub-Saharan Africa and Latin America (±2 percent) during the last decade where per capita incomes were declining; it was high and increasing in East Asia (nearly 3.5 percent in the last decade). The regional growth in milk output is highly correlated with regional economic growth, suggesting that demand for milk has been an important determinant of milk production. Indeed, growth was highest where the resource base (natural pastures) were limited and vice- versa.
Note that milk output in the developed countries, which still accounts for 75% of world milk production, also declined during the last three decades. Nonetheless, subsidized exports from developed countries contributed to rising LDC milk imports and, in general, discouraged milk output.
Comparable data on real livestock prices are relatively difficult to obtain for a large number of countries, but it appears that, among meats in LDCs, beef prices have been relatively constant, again with wide variation across countries. Domestic prices have often been tied, at least loosely, to international beef prices which determine the cost of beef imports or the value of beef exports. International beef prices have remained essentially constant during the last three decades (Jarvis 1986). Within Latin America, for example, beef prices have risen in a number of major producing countries as consumption as risen more rapidly than production, forcing countries from a position as net exporters to self-sufficiency. These governments have gradually reduced interventions which depressed beef prices.
In contrast to beef, poultry prices have fallen steadily throughout the world, mainly in response to increased production efficiency resulting from: improved genetics, balanced feeds, veterinary drugs, economies of scale and better management. Poultry consumption has risen rapidly in response to its declining real price and is becoming the meat of choice in many LDCs, particularly in urban areas.
Milk prices have fluctuated widely in response to the variation in the level of export subsidies from developed countries, especially the European Community (EC). However, many LDCs have imposed tariffs or quotas on powdered milk imports to protect domestic producers. India, South Korea, Brazil, Chile and Colombia are examples and milk production has responded positively. However, as will be argued below, in each of these cases, technical change and increased producer efficiency has contributed more to the growth in output than have higher prices per se. Indeed, milk output in each of these countries has been growing more rapidly than domestic consumption and, as each country has approached self sufficiency, governments have been reducing domestic prices. Future growth in the milk industry in these countries will depend on the growth of domestic milk demand and/or each country's ability to export milk in an increasingly competitive world market.
Return on Investment:
What has been the profitability of livestock investments? In a World Bank ex-post evaluation of 104 agricultural development projects which were wholly or partially devoted to livestock, roughly 60% of the economic rates of return (EER) exceeded 10%, while 34% were below 5% (The World Bank, 1985). The average return on livestock investments, weighted by the amount invested per project, exceeded 12%. Although these are only moderate returns relative to those estimated for other Bank investments, livestock projects have offered an acceptable return. More importantly, most of the projects which failed were in Africa, whose economic, technological and political context offered unusual challenges. More than two thirds of the projects in other regions performed satisfactorily.
Analysis of these projects suggested that the variation in their performance was determined by many factors (The World Bank, 1985). Factors which had particularly strong effect included the availability or lack of:
Rather than suggest that there is something inherently difficult about livestock production, the World Bank's experience suggests that production depends strongly on the incentives faced by producers. These incentives, although strongly influenced by domestic income, population growth and by the international context within which countries trade, can be significantly affected by government policy. Technical change is an essential component of any long term programme to increase livestock output, yet investment in livestock related research in developing countries has been low and the lack of appropriate technology has been an impediment the growth to livestock output.
In summary, livestock output has been growing, but ruminant production (beef and milk) have been rising more slowly than monogastric poultry and pork. The trend in beef and milk prices has been relatively constant, whilst of poultry and pork prices have steadily declined. These figures suggest that technological change has been more rapid in the production of poultry and pork, allowing producers a favourable return while offering consumers a cheaper product. A higher level of technological change combined with protection of the resource base, is needed if ruminant output is to increase and provide consumers with more, cheaper and better products.
THE USES OF LIVESTOCK AS AGRICULTURAL CAPITAL.
Livestock contribute in many ways to national welfare in developing countries. On average, livestock account for half of agricultural output when bothe their direct and indirect contributions are considered. Directly, livestock provide food and non-food products (hides and skins) amounting to about 20 percent of agricultural GDP. Indirectly, they contribute another 30 percent by supplying essential inputs to agricultural production. Livestock convert crop residues, agricultural by-products and pastures on marginal lands (resources with limited alternative use) into a range of higher value products for subsistence and sale. The integration of livestock into cropping, via draught power and manure, increases the area cultivated, improves the timeliness of agricultural operations and helps maintain soil structure and fertility. As economic development proceeds, the use of ruminant livestock by small farms will shift away from the current emphasis on traction towards beef and/or milk production (Jarvis 1982, 1988).
Because animal food products command high prices, they are usually consumed in greater amount by individuals having higher incomes, although, in some countries in Africa and Latin America they may be account for a high proportion of expenditure even in poorer households. However, even where the poor consume few livestock products, it is economically attractive for them to produce such products and exchange these for other foods which provide cheaper sources of energy and protein.
Both species and breeds vary in their capacity to produce different types of outputs and to utilize different types of inputs. Ruminants have the capacity to utilize low quality, bulky feeds such as pasture, crop and industrial by-products which have few alternative uses. Large ruminants (buffalo and cattle) also provide draught power and are by far the main source of milk. Small ruminants (sheep and goats) are generally more prolific, produce wool and hair in addition to meat and milk and can prosper under poorer range conditions than large ruminants. Small ruminants are also a more convenient household source of meat, barter and cash,. They are also more easily stolen. In many situations, large and small ruminants are complementary since they utilize different forage species. Diversification of disease risks is further reason for running them jointly.
Monogastrics (pigs and poultry) are utilized primarily for meat production, although hides, feathers, down and manure are also important products. The principal economic advantage of non-ruminants is their ability to convert high energy/protein feeds into meat at a more favourable ratio than ruminants. Such feeds are often expensive if they are demand in for direct human consumption. However, an increasing amount of high energy/protein feeds from crop by-products are now fed to non- ruminants and identification of cheap feed sources for monogastrics is an important aspect of livestock production in most developing countries.
In most countries there is a choice between two fundamental livestock production strategies a) the feeding of inexpensive, low-quality pasture resources to ruminants to produce meat, milk, wool, manure and draught power, and b) the feeding of high energy-high protein grains to non-ruminants for egg and meat production whenever the demand exceeds the amount which can be produced by ruminants from low-cost feed resources available. It is generally uneconomic to produce beef using feed grains, except where beef prices are unusually high, although the price of milk may justify such feeding.
Where pasture, forage or low-quality crop by-products are available (or can be economically increased), ruminants provide meat and milk at low cost. There is potential to increase pasture production in Latin America and so increase beef and milk production. A similar potential probably exists in much of Africa if trypanosomiasis can be controlled. In most other regions, pastures are limited and increased meat and milk production will have to come mainly from swine and poultry utilizing grains and high-quality agro-industrial by-products. Such production will commonly take place in large, industrial-type enterprises close to urban centres.
Despite the rapid growth in demand for poultry, smallholders in developing countries can be expected to rely on ruminants as their primary livestock assets because they use more efficiently the locally available, low quality feeds, and that they provide a wider range of products, particularly draught and manure, crucial to their overall farming system. In meat production, smallholders can compete effectively with larger commercial enterprises only to the extent that they have access to low cost farm resources, especially feed and labour, which cannot economically be sold off-site. Such low cost resources usually result from the integration of agricultural and livestock activities. Many smallholders will find it profitable to maintain a small number of other species to utilize that available feed which ruminants do not utilize efficiently, to provide diversity to the family diet and to provide assets which can be liquidated in smaller amounts.
THE ROLE OF GOVERNMENT IN DETERMINING LIVESTOCK PRODUCTION INCENTIVES.
Livestock are capital goods which are highly mobile and can be liquidated rapidly if economic incentives are unattractive. Livestock production can thus be strongly affected by government policy, both insofar as it affects: a) the prices which farmers face for their products and for the inputs they purchase, b) as it affects property rights (especially rights to land ownership and use), c) the development of new technologies, d) agricultural extension, e) the availability and terms of credit, f) animal health and sanitation, and g) infrastructure (e.g., roads, communications, and police and judicial services). Although it is impossible in a brief paper to cover the workings of all policies in all countries, a number of the most important policies affecting beef and milk in developing regions during the last two decades will be briefly analyzed.
As a general rule, economists believe that governments should work to ensure that the price paid to domestic producers of, say, beef or milk is equal to the international value of these products, i.e., the FOB value of exports and the CIF value of imports in a local port, plus or minus domestic transport costs to the site of production or consumption, respectively. The same rule is valid for establishing the cost of productive inputs. When this rule is not followed, national economic welfare is usually diminished, though there are some important exceptions.
Historically, many governments (e.g. Latin America) have tried to reduce the retail prices of beef in order to benefit consumers. However, lower prices to consumers usually require lower prices to producers, which lead eventually to lower output. Thus, the effort to assist consumers via lower prices is usually successful only in the short run, and may actually harm consumers in the longer run as output declines. Such policies have been adopted at least once by nearly every Latin American country during the last two decades. Although initially all consumers might have benefitted through the availability of beef at a lower price, this benefit would soon be lost for many as consumption is reduced or higher black market prices. Of course, producers lose in both the short and the longer term due to the lower price received. Note that the analysis is similar if prices are imposed at the producer or wholesale level.
A similar effect will be achieved if a country which exports beef imposes a beef export tax, reducing the domestic price of beef below the international level. Figure 1 shows the relationship between import and export on meat supply and demand where the import price of beef is higher than the export price. Given that the intersection of domestic supply and demand occurs at a price lower than the export price of beef (Pe), it will be profitable for the country to export beef. If the government allows free trade to occur, the domestic producer and consumer price will be equal to Pe, domestic consumption and production will equal Co and Qo, respectively, and exports will equal Xo.
Suppose now that the government imposes a beef export tax equal to t, where t is some fraction of the export value. The domestic price will decline to Pe(1-t), causing an increase in domestic consumption, a decline in domestic production, and a decline in exports. Moreover, it can be shown that economic welfare falls by an amount equal to the two shaded triangles. These losses occur because consumers are now artificially induced to spend more on beef and because producers are discouraged from producing beef, thereby, diverting their resources into other activities which the country produces less efficiently. In addition, the reduction in the domestic beef price causes a significant redistribution of domestic income. Beef consumers gain because the price of the product they purchase has declined; the aggregate gain for consumers is approximately indicated by the area abdc. In turn, producers lose because the price they receive for beef has also declined; their aggregate loss is approximately area aefc. The government earns tax revenue equal to the area tX1. Because of the shift in income distribution, consumers may favour an export tax even though total national welfare is diminished by its effect.
It may be noted that some countries which have imposed a beef export tax have also neglected to develop new beef production technologies, perhaps in the belief that the beef export surplus will remain. Over time, however, beef consumption in such countries may grow more rapidly than production (shown by a greater rightward shift in the demand curve than the supply curve). If so, exports will decline. Once exports have been eliminated, the country will be simply self-sufficient and further increases in domestic demand will lead to a rising domestic price until the import price, Pm is reached. Subsequently, beef imports will begin.
Milk, like beef, is politically a highly sensitive product and has also frequently been subject to intervention. Such intervention has sought two distinctly different ends. In many countries, governments have concentrated on restraining prices. The effect has often been to depress output and decrease milk quality.
For example, in Colombia the government has imposed price controls at various stages of the production and marketing chain for pasteurized milk, but not for crude milk and processed products. The expressed intent was to reduce the cost of pasteurized milk, thereby benefitting poor consumers. The results have been somewhat different. Price controls on pasteurized milk have led to a) higher adulteration and lower milk quality, b) a higher percentage of milk marketed as raw milk with attendant health risks, and c) a lower price and higher consumption of processed milk products (cheese, yogurt, ice cream, etc.) which are consumed mostly by upper income groups, at the expense of a reduced supply of pasteurized milk, which is consumed more evenly by all income strata.
A different situation is one in which the government has imposed an import tariff on milk to protect domestic producers. This policy was commonly used by developing countries during the mid 1980s when international milk prices were strongly depressed by subsidized exports from developed countries. A number of countries which had rising milk imports (eg. South Korea, India and Indonesia), made significant efforts to develop their milk industry to satisfy a growing national demand.
Figure 2 shows the effects of milk import tariffs. Where the intersection of domestic supply and demand lies above the import price of milk. If free trade in milk (powder) is allowed, the domestic price will be equal to Pm, domestic consumption and production are, respectively, Co and Qo, and milk imports equal Mo. If an import tariff of t is applied, the domestic price will rise to Pm(1+t), inducing a decline in domestic milk consumption, a rise in production, and a decline in milk imports. It can again be shown that national welfare is reduced by the area of the two shaded triangles. The rise in domestic price induces consumers to shift their expenditure to other goods whose contribution to consumer's utility is somewhat less than that which would have been offered by milk at the initially lower price. Similarly, producers are induced to shift more resources into milk production, which provides less benefit than could be achieved had these resources been used to produce goods in which this country was innately more productive.
Note that the import tariff which increases the domestic price again provides government revenue. It also increases producer incomes by an amount approximately equal to the area abdc, but reduces consumer welfare by an amount approximately equal to area aefc, which is larger than the gains achieved by producers and the government. Thus, milk producers are likely to favour an import tariff even if it decreases national welfare.
Although the conventional economic analysis laid out above indicates that the distortions introduced by a tariff on milk imports is likely to reduce domestic welfare, this analysis may be qualified in important ways. For example, if the international import price is temporarily low due to “dumping,” but is expected to return quickly to a higher, normal level, a developing country may find it attractive to impose a countervailing import tariff to ensure that the domestic milk industry does not suffer irreversible harm during the period of low prices. An argument can be made that the gains from importing cheap milk during the interim period will be smaller than the long term losses inflicted on the dairy sector. Whether this is true depends on the relative costs and benefits of the alternative actions, which is an empirical issue likely to vary significantly from one country to another.
Similarly, if the country has potential to significantly increase its milk production efficiency in the long run, a transitory import tariff may permit, if combined with other actions like a strong research program, the realization of such potential. This “infant industry” argument for a tariff is often advanced for the manufacturing sector. A problem, however, is that the alleged increased efficiencies sought are often not achieved and the short run tariff becomes a long run tariff, protected by vested interests. If so, although producers gain from a higher domestic price, the loss by domestic consumers will be larger.
In a number of countries, including India and Indonesia, domestic dairy development has been encouraged by significant import tariffs and/or the receipt of concessionary milk imports which were sold by the government at market prices. The revenues thus obtained being used to subsidize the development of the domestic dairy sector (Alderman). Although such efforts have achieved significant improvements in the quantity and quality of milk produced, in each case, consumers have had to pay higher prices of milk than they would have had to pay had milk been imported at cheaper prices. Thus, if cheap milk was desired for consumers, the policy of applying tariffs has achieved the reverse, at least in the short run. However, since higher income consumers account for the bulk of milk consumption, such policies might have distributional justification in some cases.
Fig. 1: THE WELFARE EFFECTS OF A BEEF EXPORT TAX
Fig. 2: THE WELFARE EFFECTS OF A MILK IMPORT TARIFF
Price intervention via export taxes, import tariffs, and fixed prices are common in developing countries. This paper has attempted to show that they can cause significant economic damage, even where they increase livestock output. The appropriate policy goal ought to be to optimize total economic output, not the output of any specific product - even livestock!
Several other types of economic interventions warrant mention. One is exchange rate overvaluation, which occurs when the domestic currency purchases more foreign currency than it would at an “equilibrium” in the balance of payments. Exchange rate overvaluation generally occurs as the result of economic development policies which restrict imports to encourage industrial development. The reduction of imports reduces the demand for foreign currency, which in turn leads to a stronger domestic currency. The stronger domestic currency directly reduces the domestic value of all traded commodities. For exported goods, for example, it has an effect similar to that of an export tax. It will do the same for imported products if these are not protected by tariffs.
Empirical studies of policies implemented in many countries suggest that the indirect effects of currency overvaluation have probably been more damaging to the livestock sector than have the direct interventions like price fixing and export taxes, which are more visible (Krueger, Schiff and Valdes, 1988). Rarely have agricultural sector spokespersons fully appreciated the damaging effects of currency overvaluation. Even when they have, however, they have usually had little influence on such policies. Although agricultural interests usually influence the policies which directly affect the agricultural sector, the influence of such interests on macroeconomic policies, i.e., the exchange rate, is usually limited.
Government have occasionally sought to prohibit certain types of beef slaughter. For example, in Colombia in the mid-1960s and in Chile in the early 1970s, slaughter of heifers and cows that were deemed still “productive” was prohibited in an attempt to force expansion of the breeding herd and thereby output. This measure led to increased clandestine slaughter of females. Similarly, in Indonesia, the slaughter of younger bulls was prohibited with the intent of building up the livestock herd. It can be shown, however, that the constraints imposed on producers by these prohibitions reduced overall livestock profitability by impeding the producer from taking what appeared the most profitable action (Jarvis 1982). Farmers generally perceive better the appropriate use of livestock capital than do governments. In each of these cases, when farmers slaughter animals they do not generally cease to own livestock assets, but simply shift from ownership of an older less efficient animal to a younger more efficient animal. The government's effort to dictate the appropriate use of animals thus doubtlessly led to a long-run decline in the livestock herd and in output rather than the increases sought.
In most developing countries, industrial protection policies (import tariffs and quotas) has increased the cost of inputs important to livestock production, such as machinery and equipment, veterinary supplies, minerals supplements, fertilizer, and fencing materials are usually high relative to costs in developed countries. The lack of competition among importers of many brand name products is also a factor in high input costs. Such costs inhibit the development and adoption of improved livestock technology.
Given the tendency of government market intervention to cause harm, most economists argue that governments should minimize such interventions. However, there are other non-market interventions, like those in public health, veterinary services, research and extension and the provision of infrastructure, which governments must undertake.
LIVESTOCK RESEARCH, INFRASTRUCTURE, AND OTHER GOVERNMENT INTERVENTIONS.
It has become increasingly clear that achieving higher rates of livestock output associated with higher incomes for producers and lower prices and higher quality products for consumers, depends on obtaining improved technology. Probably no aspect of government policy is as important as research for the future of livestock production in developing countries. In several countries where efforts have been made to develop a domestic dairy industry, via import protection, the increase in output has probably come more from technological diffusion than from the stimulus of higher prices, per se. For example, in India, the increasing use of crop by-products as feed concentrates, along with the introduction of crossbred dairy cattle having higher potential yields, has resulted in a rapid increase in milk output per animal. Similarly in Colombia and Brazil, the spread of pasture raised crossbred dual purpose cattle has led to rising output through a combination of increased herd size and higher output per animal. In each case, the output expansion has occurred while prices have been roughly constant or declining. Further, as domestic output has risen, reaching self-sufficiency levels, policy makers have been confronted with the possible need to export milk surpluses at world prices which are substantially lower than either the protected domestic price or, even, the milk import price.
Even when basic technology is available in developed countries, a strong domestic research capability is essential to identify and adapt promising technologies to local conditions. Unfortunately, most livestock research and development institutions are weak and a major effort is needed to strengthen them, especially, the number of qualified staff.
An institutional environment which allows farmers to a) market their produce for higher prices, b) obtain inputs at lower cost, and c) obtain information necessary for decision marking more rapidly and effectively is critical to livestock development. Infrastructure is especially important where timely access to inputs is essential and where livestock product must be marketed quickly. Milk production is such an example and depends heavily on an efficient the establishment of a marketing and distribution system, including milk collection, transport, and processing. The diffusion of new technologies to farmers, e.g. artificial insemination and forage technologies, has often been achieved through the same systems. Such efforts have been carried out efficiently by private firms and cooperatives, though rarely by public firms.
Livestock diseases impose significant economic losses and can present a threat to human health. Such losses and threats can be economically reduced by improved animal health programmes. However, programmes such as vaccination, sanitation and inspection programs require a deep commitment to implementation from producers and governments and often require regional cooperation.
THE EFFECT OF SOCIAL AND POLITICAL FACTORS.
Social factors can influence the use of livestock such influences are often obvious, for example, religious objections to the consumption of pork in Muslim countries and beef in Hindu countries. In other cases, however, the effects of social influences are less pronounced though still important. For example, the attribution of prestige to ownership of cattle may increase the cattle's total value but lead to other tangible products like meat and milk. In general, such effects seem relatively small in magnitude.
In much of Asia cattle, utilizing locally available residues, are used mainly for animal traction on small farms. In India, for example, cattle are fed principally on wheat and rice straws which account for approximately half the plant's total gross energy. This energy would be largely wasted if it were not consumed by ruminants and converted into traction for ploughing and manure.
Due to religious beliefs beef in India is of little value (beef is consumed by the Moslem minority in some areas). Nonetheless, farmers require some means to cultivate and most farms are too small to justify mechanization and produce forage. The value from draught and manure must therefore be sufficient to justify maintaining cattle and this in fact the case where livestock are kept. Incorporation of manure into fields and garden areas, to improve soil fertility and structure, is often essential to maintaining agricultural production. It can be shown that the social constraint on the eating of beef, by diminishing the value of beef which is a necessary by-product of milk, traction, and manure production, makes cattle a less profitable investment. Further, with no incentive to slaughter the animal, the tendency is for producers to simply abandon their animals when their economic life animals has ended. Such animals are a general nuisance and harm other farmers who need to protect their crops and from consuming valuable common grazing.
THE SUSTAINABILITY OF LIVESTOCK PRODUCTION SYSTEMS.
Livestock are usually helpful in sustaining agricultural production. However, there are cases where livestock development has had disastrous environmental consequences. For example, clearing of the tropical forests in Central America and the Amazon during the last two decades, these developments has been sharply criticized for their ecological and sociological damage. Most criticism has focused on a) the destruction of irreplaceable genetic materials, b) tendency for pasture to rapidly diminish in productivity because of loss of soil fertility, leaving the fragile soils vulnerable to compaction and erosion, c) the displacement of indigenous peoples and small farmers by land speculators who have used cattle ranching as a mechanism for obtaining and controlling large tracts of land, and d) the threat to the environment from destruction of oxygen producing trees.
Livestock development, per se, in most of the Amazon basin is not very profitable at current prices. Nonetheless, government incentives in Brazil have affected livestock development and, more dramatically, Amazon settlement and deforestation (Binswanger). Income tax credits and subsidized interest rates on loans for livestock development, along with grants of land on favourable terms to individuals engaged in livestock development, have given substantial private incentives for livestock development in rainforest areas. This is one of the most dramatic examples of a case where government policy is the primary cause of an unsustainable agricultural system. Although some rainforest destruction would remain even if government policies were fully neutral, due to the pressure of spontaneous colonization by poor farmers but the areas affected would be much smaller. The damage caused by such settlements is a more difficult problem. Achieving a sustainable system in such situations will require development of either improved technologies or, more likely, the exclusion of settlers.
Developed countries contribute to environmental degradation to a far greater extent than does either Brazil or other developing countries. However, that others have and are destroying irreplaceable assets is poor justification for continuing with equally bad policies in the developing countries. The intent should be to make the best use possible of the available resources, in all regions.
Overgrazing on semi-arid and arid lands, leading to range degradation, is another case of an unsustainable livestock system. Pastoralism is a practice that utilizes extensive rangelands where rainfall is low and highly variable, making settled agriculture and/or livestock production extremely risky. The principal production risk for a specific area is that no rain will fall. However, cattle can be herded to areas in which rain has fallen and pastures are available.
The need to access a large area of land in order to ensure sufficient pasture is an important reason for the evolution of “common” range systems. In such systems, a group of pastoralists share land, with all being able to move about with their herds in search of the best forage. If the system is to work well, pastoralists must have a well defined membership group with clear (albeit sometimes complex) rules of access to pasture and water. If group membership and/or the rules of access become unclear or ineffective, particularly as when population or economic pressures encourage greater use of the range, the system may tend toward an “open” access system in which no limits are placed on the number of herders (and animals) using the land. In this case, the economic value of pasture is likely to be severely diminished or lost altogether (Jarvis 1984).
In most areas, pastoralism is probably more productive in terms of the value of total output of beef and milk per hectare of land than is cattle ranching. The pastoralists utilize much more labour and extract a larger number of joint products for direct use, especially milk. Beef is produced from cull animals, both steers and cows, but accounts for a relatively small proportion of output. Pastoralists often barter milk and beef with agriculturalists for grain, which is a cheaper source of energy. Manure is used for fuel, and is also left on the fields of agriculturalists during seasonal migrations into settled areas. Agriculturalists sometimes pay herders to graze their animals overnight on their fields.
In systems in which land is communally owned, livestock ownership provides usufruct rights to land which are otherwise lost. Mechanisms are needed in such systems to ensure that all individuals having grazing access also have livestock. In pastoralists systems, livestock ownership traditionally belonged to kinship groups which used force to maintain their hegemony over a particular region. Complex societal rules and livestock exchanges existed within such groups to ensure that individuals who lost their animals to disaster, such as drought or disease, could reconstitute their herd. Such mechanisms have been breaking down in recent years, largely because pastoralist populations have gradually expanded while rangelands have been lost to the spread of sedentary agriculture. Under these conditions, the average herd has been shrinking whilst the aggregate number of animals grazed has been growing.
Traditional mechanisms have proved insufficient to reconstitute the herds of many individuals following disaster. Wealthy individuals, frequently located in urban areas and able to better diversify risks through other economic activities, are accumulating animals and hiring others to herd them. Gradually, as a higher proportion of total herds are owned by such individuals who seek a more marketable output, greater emphasis is being placed on beef production.
Under such pressure, there is fear that overgrazing is increasing. It appears, nonetheless, that the main effect of overgrazing has been an increase in the periodic herd losses suffered from drought, rather than a decrease in range quality. The range generally seems to have substantial resiliency, recovering more rapidly than the herd. However, such a system is truly sustainable, except perhaps at a low average and highly variable yield. A greater problem is the lack of incentives created by the common range system for the development of any productivity increasing technologies. Such technologies would be privately unprofitable within a situation where animal nutrition is not under the herder's control. Without a shift toward greater control of land, there is little possibility of increasing ruminant livestock output in this area.
The primary problem faced by common ranges is the inequities which are likely to be created as common lands are converted into lands with an increasing degree of private control. However real, important and difficult these issues are, it is not an adequate justification for retaining the current system. Historically, pastoralist groups have fought for specific areas, thus deciding “property rights.” In recent years, the increased value of livestock output has led to the gradual emergence of more private land rights in countries as diverse as Somalia and Botswana. Kenya has successfully privatized its land with beneficial results. Clarification of such land rights is the primary factor needed to reduce overgrazing. However, that will not in itself reduce the increasing pressures on land which are stemming from higher population and which lead to deforestation and cultivation of marginal land. Again, the best solution seems to require the development of improved technologies which are more productive and sustainable combined with the education of producers to use them.
Feed availability, disease, climate, social and political forces, as well as economic incentives all influence the pattern of livestock use which emerge in developing countries. Thus, one of the main responsibilities of policy makers is to ensure that economic markets work well so that livestock producers receive appropriate signals regarding resource allocation. Similarly, the sensitivity of the mix of outputs to economic and technical factors indicates that, when formulating livestock development strategies, it is important to have a clear understanding both of the various production constraints and also of the demand the for different products.
There are cases where government intervention in markets is justified i.e. the protection of domestic producers from international dumping or to initiate long term industry development. Unfortunately, development often does not always occur even when the government has intervened to obtain higher livestock prices. Sometimes this is due to the intervention appears short term and the resulting uncertainty mitigates against development which were in fact sought. More generally, the government does not make the concerted effort through related research to develop the technologies required to increase productivity, or the requisite political stability or land rights are not present. As a general, though not precise, rule of thumb, livestock development in most countries will make the greatest contribution to domestic welfare if the government establishes free markets for livestock products and inputs and strives to develop complementary research, infrastructure and animal health programs. Research, education, and non-distorted market signals seem generally to be the best guarantee of achieving sustainable livestock production.
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