Invited papers (Contd.)

The Malaysian livestock industry: a synopsis

Adrien K Raymond

Director
National Institute of Animal Biotechnology
Bukit Dinding, 27000 Jerantut, Pahang

• 3 percent contribution to GDP

• 15 percent of agricultural production and 30 percent value of food produced

• Output value of RM4.7 billion

• Poultry and pork contributed 95 percent value of livestock output

Policies before the crisis and their implications

NAP1 in 1984

• Expansionists policies on export crops, in particular oil palm and cocoa

• Heavy investments in infrastructure, institutional building and new land development

NAP2 (1992–2010)

• Rapid expansion of the manufacturing sector altered the relative importance of the agricultural sector in the economy

• Labour shortages, rising wages, increasing competition of land for other uses

• Productivity, efficiency and competitiveness issues in the context of sustainable development and linkages with other sectors of the economy

Features of the economic crisis

• Began in October 1997

• Currency market highly vulnerable to speculation

• Depreciation of the ringgit vis-à-vis major currencies negatively affected the stability and security of the country's food supply

• High imports of food put a serious strain on Malaysia's foreign exchange reserves

• High inflationary pressures

• Higher cost of production (increases in the prices of agricultural inputs)

• Drop in consumption patterns - now returning to normal

• Stock market sharply down

• High interest rates - new investment-affected

• Banking and other financial institutions severely affected

• Unemployment (especially foreigners)

• Environmental impact - e.g. high cost of treating animal waste

• Unanticipated rapid and sudden changes in the domestic and international economy

• Re-focusing on formulation of new policies & strategies for agriculture

• Animal inventories not much affected (except pig population)

New paradigms in agricultural policy [NAP3]

• Agro-forestry approach

• Product-oriented approach

Macro-economic framework [1995–2010]

• Sector growth rate of 2.4 percent

• Contribution of agricultural sector to GDP to decline from 13.5 to 7.1 percent

• Drop in workforce from 1.43 million to 0.93 million

• Labour productivity to increase from RM11,360 to RM24, 730 per worker

• Land utilisation to marginally increase by 0.5 percent per year

Prospects for the livestock industry

• Good demand prospects

• Expanding market for halal foods

• Ability to specialise and be competitive in production of certain livestock products

• Potential to enhance beef production through integration

Objectives

• To ensure adequate supply of poultry and eggs for the domestic market and to capitalise on the export markets

• To enhance the production of fresh beef, mutton and milk for the domestic market

• To ensure adequate and consistent supply of raw materials to meet the needs of the processing industry

• To develop Malaysia as an international Halal Food Hub

Strategic directions

• Increase efficiency and productivity

• Rationalise land use

• Strengthen competitiveness

• Strengthen economic foundation

• Strategic sourcing

• Promote sustainable development

Conclusions

• The agricultural sector to remain strategically important as a provider of food and raw materials

• Production of agricultural products based on market demand and potential, and consumer preferences

• Agro-forestry approach to optimise resource use and maximise returns

• Rich animal genetic resources of the country will be conserved, managed and sustainably used for the development of the livestock sector

• Malaysian livestock sector is set to increase its productivity and competitiveness, deepen linkages with other sectors and venture into new frontier areas

An economic perspective on the livestock and poultry sectors in Pakistan

U N Khan

Animal Science Institute
National Agricultural Research Centre
Islamabad 45500, PAKISTAN

In Pakistan, about 43 percent of the land area is in agricultural use, including 4.55 percent under forest. This land has to produce food for 135 million people, with an annual growth rate of 2.8 percent. The share of the agricultural sector in GDP has gradually declined from 38.9 percent in 1969–70 to 24.5 percent in 1998–99. During that thirty-year period, agriculture has seen a 37 percent overall decline in its share of GDP, 57 percent in that of major crops and 15 percent in that of livestock. Although minor crops and forestry have maintained their levels and fishing has almost doubled, the overall decline in the contribution of agriculture to GDP, particularly due to disease problems in the major crops, is alarming. Between 1994 and 1999, the growth rate of the agricultural sector has fallen from 6.57 to 0.35 percent and that of livestock from 5.54 to 1.5 percent. The main reasons for this decline are high input costs and disease problems faced by the major crops and the poultry sector. Based on the livestock census figures for 1986 and 1996, goats have increased by 4.19, buffaloes by 2.19, cows by 1.92 and sheep by 0.4 percent per year, while livestock feed resources were already deficient in total digestible nutrients and digestible protein by 1987–88, by 29.3 and 33.1 percent respectively. Mainly due to the linear increase of the livestock population, the production of milk, beef and mutton has increased nearly threefold since the 1970s, and wool, bones, fat, blood, hides and skins between 1.74 and 2.57 times. Proportionate to the increase in goat population, production of hair has increased by a factor of six. Due to the commercialisation of the poultry sector, production of poultry meat has increased 21.2 times and that of eggs 10.15 times during the same period. The ratio for the recorded import and export of livestock and their products is about 1:18, which can be changed to 1:57 if the annual import bill is reduced by US$ 15.7 million through improved collection, processing and marketing of milk and other dairy products. Although Pakistan has faced economic difficulties in recent years, the challenge ahead is to improve per-unit productivity and marketing for food security. The paper describes the available infrastructure and current policies of the government toward livestock development.

Introduction

Pakistan is a South Asian country spread over 796 000 km2, which shares borders with Afghanistan, India, Iran and China. Sixty-seven percent of its 135 million population live in rural areas. The population keeps growing at a high rate of 27.7 per thousand.

Pakistan has about a dozen agro-ecological zones. The use of land is presented in Table 1.

Table 1: Use of land in Pakistan (million ha)

Source: Agricultural Statistics of Pakistan, 1996–97

It can be calculated that out of a total of 79.61 million hectares, 30.64 percent is not suitable for cultivation and the use of a further 26.50 percent area is unreported; thus, only 38.31 percent of the total area is under agricultural use, besides 4.55 percent for the forest.

Sectoral shares in GDP

The share of the commodity-producing sector, which was 61.6 percent of GDP in 1969–70, has continuously declined to about 51.3 percent by the end of fiscal year 1998–99. The share of the service sector increased from 38.4 percent in 1969–70 to 48.7 percent in 1998–99. Between 1969–70 and 1998–99, the GDP share of agriculture declined from 38.9 to 24.5 percent. The sectoral shares in GDP are given in Table 2.

This shows that the service sector now contributes more to GDP, as, among other commodities, small-scale manufacturing and utilities have almost doubled since the 1970s. During the 1970–1999 period, the contribution of agriculture to GDP has declined by 37 percent - the major crops by 57 percent and livestock by 15 percent. Although minor crops and forestry have maintained their levels and fishing has almost doubled, the overall decline needs serious consideration for future planning.

Table 2. Sectoral share in GDP

Source: Economic Survey of Pakistan 1998–99

Fortunately, the agriculture sector is still able to meet the recommended dietary allowance for people as shown in Table 3.

Table 3. Food availability in Pakistan

Note: The recommended dietary allowance is: calories 2550, protein 60.
Source: Agricultural Statistics of Pakistan, 1996–97

But this situation may not continue for long if the human population continues to grow at the present rate of about 2.77 percent and if the decline in agricultural productivity persists. Urbanisation, immigration, land fragmentation and land erosion are some of the factors that worsen the situation, besides global economic trends. Thus, extra efforts are needed to maintain the level of food availability in Pakistan.

Livestock and poultry production

In Pakistan, the cattle and buffalo herds are small, averaging four or five head per herd, and they are part of a farming system which involves crops and other livestock. Almost all farms in Pakistan have cattle or buffaloes or at least sheep and goats. Dairy is also a major enterprise of evicted farmers, who keep one-third of the total dairy animals. The dairy buffaloes account roughly for three-fourths of the milk produced in the country. About 73 percent of cattle and 93 percent of the buffalo population live in the Punjab and Sindh provinces, which have more irrigated land than the other two provinces, Baluchistan and the North West Frontier Province (NWFP). The latter maintains about one-fourth of the cattle and buffalo populations. The number of dairy farms around towns is growing fast, as large towns face shortages of milk due to poor marketing for the milk produced in the rural areas. The herd size on the peri-urban farms varies between twenty and a few hundred animals. Usually mixed herds of cattle and buffaloes are kept at these farms to overcome the effects of seasonal freshening in buffaloes, besides other, economic reasons.

Poultry production is another important enterprise in Pakistan. Almost every family in rural areas and every fifth family in urban areas is associated with poultry production activities in one way or the other. Poultry production has emerged as a check-and-balance force for beef and mutton prices. The government multiplies its incentives to encourage its growth. Rural poultry contributes 25 percent of poultry meat and 50 percent of the egg production. The main advantage of rural poultry products is that they are produced at no cost as chickens feed on kitchen wastes outside of any housing system.

Commercial poultry farming started in Pakistan in 1963 with the introduction of hybrid strains of broilers and layers from abroad, and has become an industry with a total investment of 27 550 million rupees in 1996.

Based on the most recent livestock census figures (1996), the size of livestock and its distribution by province are presented in Table 4.

Table 4. Distribution of livestock and poultry

1 Rural poultry only
Source: Livestock Census (1996)

The increase in the population of various livestock species during the 1986–1996 period is shown in Table 5. The goats increased by 4.19, the buffaloes by 2.19, cattle 1.92 and sheep 0.4 percent per year during the period.

Table 5. Growth in livestock population, 1986–1996

There is a continuous increment in the livestock population whereas the availability of feed is limited. The inadequacy of feed resources is the main constraint to livestock production. The livestock population is supported by feed resources derived from crops, fodder, range lands, other grazing areas and agro-industrial by-products. By the late 1980s (Table 6), the feed resources were deficient in total digestible nutrients by 29.3 percent and in digestible protein by 33.1 percent. As the population has grown since then, one may expect a further decline in the overall nutritional status of livestock. V - c

Table 6. Estimates of availability of livestock feeds and nutrients (million tonnes)

1 Wheat straw, rice straw, barley straw, oats straw, millet straw, maize crop residue, others
* Akram, 1987
Source: Malik, 1988;

Livestock products are shown in Table 7. Production of milk, beef and mutton has increased about 3 times, of wool, bones, fat, blood, hides and skins between 1.74 and 2.57 times since the 1970s. Hair production has increased by 5.96 times, which is proportionate to the increase in the number of goats. The overall increase in livestock products can largely be attributed to the growth of the livestock population thanks to the contribution of crossbred animals. It is only the poultry sector which has undergone significant development through commercialisation. Production of poultry meat increased 21.21 times and that of eggs 10.15 times during the period.

Table 7. Estimates of livestock products, 1971–1999

Source: Economic Survey of Pakistan, 1996–97 and 1998–99

The contribution of the livestock sector in 1996–97 is shown in Table 8. The ratio for the recorded import-to-export of livestock and livestock products comes to about 1:18 (excluding smuggling of live animals to the neighbouring countries). If collection and processing of milk and milk products is streamlined in the country, the import bill can be reduced by US$ 15.7 million annually, giving an import-to-export ratio of 1:57.

Table 8. Contribution of the livestock sector to import and export, 1996–97

Organised collection and marketing of milk has, however, remained a major problem in the dairy sector. Several milk plants were established in the country to process milk; half of them are no longer functioning, as shown in Table 9, and those that do function work at about 70 percent below capacity.

Table 9. Dairy plants in Pakistan, 1999

Products include UHT milk, pasteurised milk, powdered milk, cream, ghee, butter, cheese, yoghurt and infant food
Source: Ministry of Food and Agriculture

Development of the livestock sector

In Pakistan, each province has a livestock department to extend services for artificial insemination and animal health care, including disease diagnosis, treatment and production of vaccines and sera. These departments are also responsible for the management of livestock and poultry farms in the public sector and to provide advisory services to individual farmers. Besides these centres, the available infrastructure for livestock development through research and education is shown in Table 10.

Table 10. Infrastructure for livestock development in different administrative units

Table 11. Ratio between livestock and poultry population and the number of veterinarians in various countries of the world.

There are too many animals to be handled by a veterinarian (Table 11) and this affects the quality of the services provided. The budgetary cuts imposed by the government in the last three years also have a significant negative impact. The livestock departments have not adjusted their role to the changing circumstances and there is little emphasis on extension in animal production and research. There is a general feeling that artificial insemination, progeny testing and vaccine production should be privatised.

For the development of the livestock sector, several laws have been framed from time to time (Table 12), which are not free from serious limitations. For example, the law on livestock improvement is restricted only to bull keeping and castration. Likewise, the law on livestock conservation imposes restrictions only on the slaughter of useful animals. The laws on livestock nutrition and livestock products do not cover the analysis of microbial and toxic material.

Table 12. Livestock laws in Pakistan

1 This law was introduced in 1960s to restore the goat population and now is not in force
Source: Farani (1983)

Current policies for livestock development

The livestock sub-sector accounted for 34 percent of the agricultural value added and 8.3 percent of GDP in 1996–97. The government aimed at a minimum growth of not less than 7 percent for the sector. To achieve the target, the salient features of the plan are summarised below:

• Purebred cattle and buffaloes are to be improved through selective breeding. Emphasis is on production of progeny-tested bulls of high genetic merit for use in the artificial insemination network.

• Nondescript cattle comprising over 70 percent of the total population are to be improved through crossbreeding with exotic dairy breeds (Friesian and Jersey).

• Extension services including artificial insemination will be strengthened.

• The use of non-traditional feed resources like agro-industrial wastes will be encouraged to overcome feed shortages.

• Emphasis is placed on maximum and improved vaccination coverage against contagious and infectious diseases and parasitic infestation.

• Establishment of farmer associations for better inputs for increased production and better marketing will be encouraged.

• Manpower will be trained locally and abroad to meet the demand of the sector.

In April 1997, the government decided on the following incentives for the agricultural sector (including livestock):

• For agricultural credit, an additional R3 000 million will be made available. A new agricultural finance institution will be established for the small and landless farmers.

• A ceiling of one million rupees will be placed on agricultural credit.

• The 50-percent interest on loans up to R300 000 obtained before 1992 is to be cancelled provided all the dues on such loans are paid within the next six months.

• It will be ensured that small farmers have equal access to agricultural credit.

• There will be no upper ceiling on land for duly registered agricultural companies involved in the production, processing and marketing of agricultural products on commercial lines.

• To provide a safety net to the landless farm workers, 25 000 cows and buffaloes and 50 000 sheep and goats will be provided through the Agricultural Development Bank of Pakistan and the Poverty Alleviation Fund against a personal guarantee. Besides improving the means of livelihood in the rural areas, this will help improve the gene pool and enhance the population of good-quality livestock.

• To boost livestock production, special programmes will be made which will include fattening of cows, control of disease and better animal husbandry practices.

• The performance of the livestock research farms of provincial governments will be improved.

• A training programme will be introduced for livestock farmers to develop the pool of quality genes.

• During the next fiscal year (1999–2000), there will be no tax on compound cattle feed and equipment used in the milk plants. The price of tractors has already been slashed down by about 20 percent.

Impact of the economic crisis

Economically, Pakistan was never well off. Much of the country's financial management is based on foreign aid and loans. The budgetary deficit and the return of principal loans are managed mostly through borrowing additional money. Consequently, Pakistan owes a huge amount to the donor countries and has to accept the demands of international financial agencies such as the World Bank and IMF against her own wish. The price of petroleum is always moving upward even if there is a downward trend for this commodity in the international market. The high price of petroleum and other utilities affects the price of almost everything since the cost of production, mobility and transportation of raw materials and finished items is high. Thus the cost of living has gone up and the purchasing power of the consumers has gone down. The wages are also low. Because of these factors, prices are unstable and price escalation is quite frequent, if often unwarranted. Also, once the price of a commodity goes up it rarely comes down. The government seems to have little direct influence in this respect and tries to subsidise the major commodities like wheat and fertiliser. Despite reforms from time to time, the tax collection system is still inefficient, and government revenues are always inadequate to improve the quality of life.

In this context, one can easily see that Pakistan has always faced a difficult economy. As a result, the development process has been slow. On top of this, there has been political instability particularly between 1988 and 1995.

The fiscal year 1998–99 has been the most difficult and challenging year for the country's economy. After achieving considerable initial success in 1997–98 in restoring macroeconomic stability on the one hand and taking the economy to a relatively higher growth path on the other, the government was poised to consolidate these achievements in 1998–99. The imposition of economic sanctions following the nuclear tests in May 1998 and the related suspension of most capital inflows created serious difficulties for the country's balance of payments. The government responded with a number of measures to contain the impact on the balance of payments and sustain domestic economic activity. These measures included the introduction of a dual exchange rate system and of a 30 percent letter-of-credit cash margin, and reductions in government expenditure. They were intended to discourage non-essential imports, which in turn, was expected to cause a decline in industrial investment and hence, a decline in industrial production, exports and the overall economic growth.

Despite difficulties of an unprecedented nature caused by external shocks, the economy of Pakistan performed reasonably well in 1998–99 when compared with those of East Asian countries experiencing sharp contractions in economic growth. The real GDP registered a modest growth of 3.1 percent in 1998–99, compared to 4.3 percent the year before.

In Pakistan, as we have seen, the livestock sector has grown largely on its own, at subsistence level only. The livestock holdings are small and scattered but the livestock population is quite large (20.4 million cattle, 20.3 million buffaloes, 23.5 million sheep and 41.2 million goats), the productivity of the animals is low due to genetic reasons and to underfeeding. The livestock department has facilitated the growth of the livestock sector by providing mainly health care, artificial insemination and advisory services. The research institutes have endeavoured to conduct applied research and transfer of technology to the end users, of course on a limited scale. Among the financial institutions, the Agricultural Development Bank of Pakistan has assisted the livestock sector by providing loans.

Table 13. Loans offered to the livestock sector by the Agricultural Development Bank of Pakistan (1980–1997)

Source: Agricultural Statistics of Pakistan, 1996–97

The trend of investment in the livestock sector may partially be judged through the loans offered by the bank during the 1980–1997 period (Table 13).

It is evident that dairy farming and poultry farming are the main areas of officially bestowed investment in the whole livestock sector. These loans have helped in setting up peri-urban dairy farming, milk plants and commercial poultry farming. Investment in poultry farming seems to have significantly declined in the last ten years.

The GDP growth rate with reference to agriculture and the livestock sector during the last five years is presented in Table 14. It shows that the overall performance of livestock and fisheries was better than that of the other components of the agriculture sector.

Table 14. Growth rate of the share of agriculture in GDP, 1994–1999 (%)

Source: Economic Survey of Pakistan 1996–97 and 1998–99

Milk production

Buffalo milk is generally preferred due to its high fat contents (6 to 8 percent), and buffaloes contribute 70 to 75 percent of all of the milk produced. On average, the buffalo and dairy breeds of cattle (Red Sindhi and Sahiwal) produce between 1 500 and 2 000 litres of milk per lactation. These are the animals that are kept in dairy farms besides the Friesian crossbred cattle. The lactating animals are fed green fodder and concentrates, mostly cotton seed cake. The use of compound feed, urea-molasses blocks and treated straw is uncommon. Economic studies indicate that some 70 percent of the cost of production for milk is incurred in feeding the animals but farmers growing their own fodder do not, it seems, calculate the cost of the green fodder they feed their animals with, and subsistence farmers depend on grazing and very limited concentrate feeding for their animals. Hence the milk is still sold at affordable prices. Rises in the price of milk come from increases in the price of live animals and concentrates and from the availability or otherwise of the milk, which varies from one area to another.

The constraints in developing an efficient collection, processing and marketing infrastructure for milk may be masking the actual potential of milk production in the country. In recent years, farmers have felt economic insecurity due to new diseases to crops and high input costs, particularly for fertilisers. Many seem to have started thinking about dairy farming.

Beef and mutton production

Beef is produced only as a by-product of cattle- and buffalo-raising, since there is no real beef breed and the concept of fattening or finishing animals for beef production does not exist in the country. Hence there is no direct impact of the prevailing economic crisis on beef production. The price escalation is due to increases in the price of live animals under the demand-and-supply phenomenon.

As for mutton, goat meat is preferred to sheep meat. Thus the goat population is growing at a fast rate while the sheep population virtually stagnates. The common man seldom can afford mutton and has to content himself with beef. Yet, consumption of goat meat is quite high.

Poultry production

Since the early 1980s, the poultry industry has been repeatedly hit by recessions big and small. The first disease struck in the crowded farms of Karachi, putting many farmers out of business and inducing many others to relocate from Karachi and Lahore to the cooler and less polluted hilly areas. Farm buildings were modernised to provide a controlled environment. In 1987, the industry was struck by the hydro-pericardium syndrome. Gumboro followed in 1989–90, the respiratory disease complex raged from 1992 to 1994 and the avian influenza took over in 1995. As a result, farmers started heavy vaccination schedules, which added to their costs of production.

Since commercial poultry has to be fed on compound feed, this sector has remained a victim of economic fluctuations and the tax and subsidy policies of the government from time to time besides low feed quality. Farmers now appear to switching over to prepare their own feed. Due to devaluation of rupee, the poultry industry has to pay more for the import of birds, drugs and vaccines, feed ingredients, and equipment. During 1997, the poultry industry appeared to contract as shown in Table 15.

One of the largest ventures in the poultry sector (K&N's Breeding Farms) in Pakistan, however, thinks that the greatest challenge facing the industry is to establish appropriate distribution channels for products, as currently 95 percent of broilers are marketed in live form through a network of dealers. This imposes additional costs and inefficiency in an industry already burdened with technical and environmental restraints. The application of modern technology and the creation of new channels of marketing together with the integration of existing ones will ensure the long-term viability and profitability of the poultry industry in Pakistan (Sattar, 1999).

Table 15. The poultry industry, 1996–1997

Conclusions

With a minimum commercialisation in the livestock sector in Pakistan, except in the case of poultry, the real impact of the economic crisis is difficult to assess as there are many factors in price escalation. The subsistence farming system continues to survive even in the worse circumstances and there are no sudden collapses proportionate to the changes in the stock exchange. In contrast, industries and the bigger farms tend to catch the positive or negative effects of the changing economic situation in a short period of time. Therefore, countries whose livestock sector is already commercialised are more likely to see its production suffer from the economic crisis.

Nonetheless, the prevailing economic crisis with its adverse effects on almost all aspects of life has posed new challenges to the livestock sector in Pakistan as well. Now the country has to think more seriously about how to improve the per-unit productivity of livestock, because the growth of the livestock population is not sufficient in itself. It must be backed up by improved processing and marketing of livestock products, which are increasingly in demand. Intensive farming and the use of alternate and inexpensive feed resources will gain importance in the near future.

References

Agricultural Statistics of Pakistan. 1996–97. Ministry of Food, Agriculture and Livestock, Islamabad

Akram, M. 1987. Animal feed resources in Pakistan. Proceedings of an APO Symposium on Animal Feed Resources. Asian Production Organisation, Tokyo

Economic Survey. 1996–97. Finance Division, Islamabad

Economic Survey. 1998–99. Finance Division, Islamabad

Farani, M. 1983. Livestock Laws Manual. FAO, Rome

Livestock Census. 1996. Agricultural Census Organisation, Statistics Division, Lahore (published in May 1998)

Malik, MY. 1988. Feed availability, requirements for animals and current pattern of use in Pakistan. In Devendra C (ed). Non-conventional feed resources and fibrous agricultural residues - strategies for expanded use. International Development Research Centre, Indian Council of Agricultural Res, New Delhi.

MINFAL. 1999. Ministry of Food, Agriculture and Livestock, Islamabad (personal communication)

Sattar, KA. 1999. Prospects for the poultry industry in Pakistan. Pakistan Poultry. Feb 1999, p5

Livestock production in Vietnam from 1990 to 1998

Nguyen Dang Vang & Le Thi Thuy

Director & Head of Conservation
National Institute of Animal Husbandry
Chem Tu Liem, Hanoi

Vietnam's economy is predominantly agricultural. Rice is the main staple crop. During the past few years, owing to government guidelines reviewing the agricultural policy of the early 1980s, Vietnam's agricultural and rural economy has developed at a fast pace, and this has helped improve the socio-economic situation and create the right conditions for deep and broad reforms in other socio-economic fields. The rural economy accounts for about 40 percent of GDP and about 40 percent of total exports. It is a source of employment and income for much of the 77-million-strong population, as well as a source of supply for many industries.

Animal production is an important part of agriculture, accounting for 25.6 percent of total agricultural products. Livestock generates income through a range of products and their processing, such as handicrafts, the manufacturing of agricultural tools for animal draught, and various services.

The purpose of this paper is to assess the progress made so far and the implications of the recent economic crisis on livestock production, marketing and consumption, and to consider solutions for livestock production in coming years.

Agriculture and livestock production

The share of agriculture in GDP, which was of 28.73 percent in 1995, shrank to 25.7 percent in 1997, while the share of industry rose from 29.98 to 32.7 percent (Table 1).

Table 1. Some socio-economic parameters of Vietnam (1994–1997)

Source: Statistical Yearbook

Plant production represented 78.2 percent of total agricultural output in 1995 and 77.6 percent in 1997, while livestock accounted for 18.9 and 17.7 percent of it respectively (Table 2).

Table 2. Agricultural production value - 1990–1997

Source: Statistical Yearbook

In the three years considered in Table 3, the value of livestock, poultry and services increased year on year prior to the onset of the Asian economic crisis.

Table 3. Livestock production value, 1995–1997

Source: Statistical Yearbook

Table 4. Animal production value, 1990–1998

Source: MARD Extension Department, 1998

Table 4 shows that the production of all animals listed increased from 1990 to 1998, with pig production always in first place (70.4 to 77 percent of the total in those years), that of poultry meat second (14.3 to 16.6 percent) and that of cattle and buffalo meat third (8.8 to 12.1 percent).

The average growth rate per year was 7.7 percent for pig meat, 3.65 percent for poultry meat, 0.2 percent for cattle and buffalo meat, while egg production grew by 6.9 percent a year and milk production by 17.05 percent.

The changes in the livestock population between 1990 and 1998 are shown in table 5.

Table 5. Change in animal production, 1990–1998

Source: MARD Extension Department, 1998

For the four recent years of 1995 to 1998, the production of pork increased from 6.36 to 7.38 percent, that of poultry from 5.79 to 8.18 percent, and that of buffalo and cattle from 1.02 to 5.55 percent.

In terms of animal population, over the 1990–1998 period (see Table 6 overleaf), buffaloes had a tendency to decrease in numbers but cattle increased by 2.03 to 2.73 percent, and pigs by 2.81 to 4.22 percent. Chicken production too had a tendency to increase over the years, but in 1998 the commercial chicken sector had many difficulties and failed to grow.

Table 6. Animal and poultry population, 1990–1998

(thousand head)

Source: MARD Extension Department. 1998

During the 1990–1998 period, as shown in Table 7, the various populations grew at different yearly rates. Dairy cattle did best, followed by duck, goat, chicken, pig, non-dairy cattle and finally buffalo.

Table 7. Average livestock per capita production per year, 1990–1998

Source: MARD Extension Department, 1998

In every agro-ecological region of Vietnam, livestock farming has developed at medium and large scale. Technical progress in animal husbandry has been applied. There now exist 115 000 farming households that each keep 15 to 40 dairy cows, 20 to 1 000 sows, 50 to 5 000 fattening pigs, 1 000 to 10 000 laying hens of broiler or duck. Nearly all buffaloes, cattle and pigs, and 95 percent of the chickens are raised at the family level. The provinces also have many medium-sized and large farms for semi-industrial and industrial livestock production.

For all that, however, livestock production is still very far from meeting the people's needs for meat, eggs and milk. Per capita production of meat for all animals except cattle and buffalo increased annually from 1990 (15.217 kg) to 1998 (20.449 kg). The highest average rate per year was for pork (4.6 percent), next poultry (2.5 percent), and buffalo and cattle rates shrank by 0.4 percent.

In 1988, the year with the highest inflation, meat production was only 886 000 tons of live weight (all kinds), compared to 1 300 000 tons in 1994. Between 1990 and 1998, egg production increased from 1.8 billion to 2.6 billion, or 152 million eggs per year (31 percent), Fresh milk production in the last seven years has increased significantly. The dairy cow herd in Ho Chi Minh City accounted for 73 percent of the total cattle population (19 800 head in Ho Chi Minh City for 27 000 head altogether).

However, in 1997 and 1998, the market price of chicken meat fell by 10 percent and that of pork by 6–7 percent.

Main factors in favour of industrial livestock development

During the past ten years, Vietnam's agricultural economy has not been much affected by the region's economic crisis and has even scored some successes.

Policies

There are many reasons for this, and the foremost is that the right policies have been applied. Now that farming households are recognised as independent economic units and have the right to use their land over the long term (30 to 50 years), they are their own bosses and can decide on how and what to produce and sell and where to get their inputs. This and other policies on lending to families, agricultural extensions and fishery extensions are meant to connect two paramount resources, labour and land, in order to develop agriculture to the utmost. Policies on paddy land management and on the limitation of paddy transfer to other plants and animals give priority to the development and application of new technologies such as selecting, domestic hybridising, importing and so on.

The factors affecting efficiency in livestock production belong to many different fields - market, private and public sector, rural society mores, gender issues, agricultural crops or the environment. In Vietnam, the livestock husbandry system is mainly based on tradition and, as we have seen, is predominantly a family business, hardly affected by international trends. The major animal feed resources are the locally available by-products (rice bran, broken rice, waste paddy), crop residues (rice straw, sugarcane top, bagasse, sweet potato) and natural grasses.

Foreign investment in agriculture during the past few years

Up to the end of 1997 there had been about 130 projects on agriculture and rural development which had been committed and carried out, with a total estimated funding of US$1.5 billion in overseas development assistance (ODA) and another 363 projects with US$3.766 million in foreign direct investment. ODA capital is very important for Vietnam's agriculture and rural development, infrastructure construction, transfer of technology and advanced managing experience, labour training and retraining. The state makes the most of preferential loans and other bilateral and multilateral co-operation in technological and scientific work for the improvement of livestock.

Animal breeding

Breeding centres for poultry, pig and cattle have been established by the state-run and private sectors with good breeds suitable to each agro-ecological region. The native breeds are well adapted to local conditions and resistant to tropical diseases, but they have low productivity and do not meet the requirements of industrialised economies. Thus, many exotic breeds have been imported. A large-scale crossbreeding programme of exotic and local breeds was carried out to improve meat quality and productivity. The germ plasm of pig, cattle, buffalo and poultry has also been imported. The Ministry of Agriculture Rural Development (MARD) provides about US$1.2 million for the upkeep of nuclear herds of livestock breeding every year. From 1995 to 1998, the World Bank provided US$10 million for a programme to improve Vietnamese cattle.

The pig husbandry companies under MARD and provincial authorities have pig breeding centres with each 400 to 2000 sows and 30 to 120 boars of good genetic value to supply good breeding animals to the farms. The Union of Vietnam Poultry Enterprises has breeding centres of good and adaptive breeds of poultry and duck (meat and egg types). The dairy and beef company under MARD has farms (Bavi, Mochau, Lamdong) with a nucleus of 200 to 900 milking cows producing young breeding animals of good quality for state-run and private farms.

Animal feed production

The main animal feed resources are locally available. Nowadays the use of grain and milling by-products for feed is in the order of 8 million tons, while the production of mixed feed is only 1.45 million tons of feed concentrate or 2 million tons in equivalent products (Table 8).

Feed mills, both state-run and private, have improved themselves in order to compete with joint-venture feed mills. We think that fair competition between foreign-financed and in-country feed companies will be a good way to develop the livestock of Vietnam in the future.

Table 8. Animal feed production for industrial husbandry 1996–1998 (tons)

Source: MARD Extension Department, 1998

Veterinary services

Vietnam has a veterinary system at both central and provincial levels with capable technical staff handling problems related to tropical diseases. The government provides basic vaccines every year throughout the country. However, the central and provincial veterinary facilities do not have well-equipped laboratories, experienced staff or enough funds for their activities.

Market

The majority of livestock products are sold directly to consumers. Slaughter is done mostly by small farmers and private butchers. Processed meat products are sold in the large urban centres and sometimes exported.

Some 8 000–15 000 tons of meat are exported annually; 84 percent of it pork, the rest beef. Export licenses for beef and pork are restricted to three slaughter facilities, which made export difficult. In 1998, however, the government allowed some enterprises to export livestock and poultry meat directly. This has encouraged the development of livestock and poultry production in Vietnam.

The country imports substantial amounts of skimmed milk powder, beef, concentrate, minerals and vitamins for livestock. Exact figures for such imports are not available.

Rural credit

The Agriculture Development Bank of Vietnam was established in 1988 as a fully owned state bank and has a client network of some 7 000 credit co-operatives throughout the country. The interest rate is high. Five years ago, it used to be of 2 to 4 percent per month; before 1998, it had gone down to 1.2 to 1.4 percent per month and now stands at 1.1 percent per month. However, in keeping with the government policy to boost agricultural production, credit is sometimes available to the poor at the reduced rate of 0.6 percent per month. Still, this means that credit remains largely out of reach for most small farmers.

Main factors preventing the development of animal husbandry

• Most state farms, forest farms, state enterprises in agriculture, forestry and fisheries operate inefficiently.

• Some policies are not suitable or their implementation is bad. The existing system of central and local managers does not meet current requirements. The policy of market expansion is not considered properly. Each policy has effect at a given level and needs improving and amending.

• Investment in agriculture and rural areas is insufficient. In the 1991–1997 period, total investment in agriculture, forestry, fisheries and irrigation was only 7.94 percent of all investment.

• Rural credit, though widespread, meets only about half of the farmers' loan requirements. Many families do not even approach official credit organisations. Some people borrow at exorbitant rates from individuals, usually not to invest in agriculture, but to spend on consumer goods or some quick-fix venture.

• Exports of several agricultural products are increasing, but prices are usually lower than international prices: rice is US$30–35 per ton lower, coffee and tea US$100–150 per ton lower: the price of pork is only equal to 60 percent of the international price.

• Large-scale processing of livestock products is limited. The slaughtering system is weak with low hygiene and much pollution.

• Protection and improvement of the environment is an urgent problem.

• The economic crisis and Vietnam's affiliation to ASEAN, APEC and WTO require a prompt and substantial enhancement of the country's agricultural competitiveness.

Conclusion

Since 1990, animal husbandry has developed in better conditions than in the past. The share of livestock in GDP tends to increase. The consumption of meat is 20 kg per capita per year.

After the success achieved in rice production (3.5–3.9 million tons of rice have been exported every year for the past five years), the government has given priority to the development of livestock production, specifically breeding and animal feed, together with showing an interest in processing, veterinary services, vaccine production and livestock hygiene.

Animal husbandry in Vietnam has not been greatly affected by the economic crisis raging in the region. The livestock population keeps increasing, although difficulties in export of livestock products have led to a reduction in the price of meat.

In coming years, agriculture, the rural areas in general and the production of livestock in particular, will play a crucial role, and farmers will be nuclear components of the country's socio-economic development. To achieve this, what is necessary is not just high growth, but sustainable development, better-quality products, efficiency and competitiveness. Therefore, the government should pay attention to the above-mentioned problems and devise the proper policies to solve them.

We hope that the development of agriculture, especially livestock production, will be as successful as in other countries of the region and of the world, with the help of international organisations and more advanced countries.