The Asian economic crisis has affected the livestock sector of various countries of the region in different ways. While the impact on most East Asian countries - with the notable exception of China - has been severe, there has hardly been any fallout on South Asian countries. The countries most affected by the crisis have been those that have close regional integration and rely heavily on imported inputs and in which there is a substantial urban demand for animal products yet little or no export of meat. In the countries affected, commercial, large-scale livestock production has suffered more than smallholder animal husbandry. Because of large feed concentrate requirements, the pig and poultry industries have been hit particularly hard. Those producers that use non-traded inputs and produce tradable outputs have fared best.
Yet, there is a sense that producers have made many of the adjustments needed to cope with changed circumstances.
Even though there are large differences among Asian countries, the consensus is that the rapid industrialisation of livestock production is going to continue. In most countries, under present policies, the share of production by smallholders will decrease. We are witnessing a dualistic mode of development with an increasingly modern, demand-driven and capital-intensive sector on the one hand and a traditional, resource-driven sector on the other. Industrialisation of livestock production is driven by economic pressure for competitiveness. In the long term, production of pigs, poultry and milk is likely to be fully industrialised, while ruminant meat production will continue to be predominantly extensive. Animal product processing, too, is likely to be fully industrialised. There are serious concerns as to the environmental sustainability of intensive livestock operations, particularly given the nature of industrial production in most countries. There are clear indications that the path to development would look different if environmental costs were included. This emphasises the need to safeguard the systems that are more sustainable: more often than not, these are associated with smallholders and mixed systems.
Given that intensification of livestock production will continue, there is a need for the public sector to address the consequences. The role of the public sector is essentially to facilitate employment and income-generating activities in an environmentally sound, private-sector-led livestock industry producing safe, quality products. This can be achieved by:
providing basic property rights and safe access to resources;
providing basic infrastructure;
providing longer-term, more sustainable policies and the means to optimise the use of national resources;
monitoring food safety and quality, animal diseases and environmental impact;
providing a regulatory framework for these and enforcing it;
playing a role in research and extension targeted at poverty reduction and environmental resource protection; and
making institutional arrangements which enable smallholders to participate in them or to expand their commercial livestock enterprises.
In order to cope with the consequences of the dynamic development of the livestock industry, there is
a need for government policies and activities to be proactive and within the principles of good
governance.
