5. Weaknesses in the livestock industries of Asia: results from a survey of livestock policy makers and researchers

An FAO sponsored workshop attended by policy makers, researchers and officials from developing countries in the Asia-Pacific region was held in Bangkok in February 2001 to consider recent developments in the livestock industries and to discuss what form government policies for these industries should take. As part of this process, participants discussed various aspects of the livestock industries, including the strengths and weaknesses that they believed existed in the livestock sectors of their own countries. The purpose of this chapter is to outline the findings. Information such as this is important and useful since it serves to highlight areas where additional research is required and it also helps to identify emerging policy issues.

Methodology

The material presented in this chapter is not based upon a formal survey. Participants at the FAO workshop provided an overview of the livestock sector in their home countries. Following each presentation, there was a general discussion by researchers and policy makers familiar with the livestock industries in the region. The results are based upon this discussion. An important caveat to the material in this chapter is that the views and opinions reported here should not be attributed to particular individuals from the participating countries. The points made about particular countries often emerged from discussion about that country by all conference delegates.

The problems mentioned have been grouped into a number of broad categories as follows:

• marketing
  
• infrastructure
  
• political/institutional
  
• production
  
• environmental.

Responses were placed into one of these categories to gain insights into where the main weaknesses were perceived to exist. Clearly, some of these categories overlap. Furthermore, a clear-cut classification of the problem in some cases does not exist. No explicit recording of the frequencies of mentions of particular problems/issues was made. The comments made in the discussion in regard to the number of times a particular issue was raised are therefore subjective. Table 22 summarises the problems/weaknesses that were mentioned during the course of the workshop

Table 22 Problems identified by workshop participants, February 2001

Country	Type of problem	Specific problem mentioned
Bangladesh	Marketing	- Restricted market access and low and unstable prices - Low profits due to payment of high commissions to too many middlemen
	Infrastructure	- Minimum availability of extension services and facilities
	Political	- Livestock farmers have limited political influence and are not well organized to lobby for their industry
Sri Lanka	Production	- Lack of suitable animals with an adequate genetic potential - Shortage of feed resources at affordable prices - Effects of disease both on mortality and productivity
Indonesia	Marketing	- Limited market access
	Production	- Lack of suitable land - Low productivity - A low level of technology - Poor management - Poor quality feed and forage - Poor hygiene - A lack of breeding stock
	Infrastructure	- Limited access to capital
Laos	Production	- Feed supply, specifically limited dry season green growth, and much forage has low nutritional value - Disease control - Low productivity
	Infrastructure	- Inadequate animal health service available - Limited technical support and insufficient proven practical livestock extension - There is a general lack of technical knowledge on application of newer more intensive animal production technologies
	Marketing	- Unstable product price - Processing activities have not been developed
Philippines	Production	- Lack of availability of quality stocks of animals - Recurrent disease outbreaks
	Marketing	- Poor marketing systems - Low cash flow
Cambodia	Production	- High animal losses through infectious diseases - Low reproductive and production rates - Production losses through poor management and internal parasites - Expense of vaccines for some infectious diseases - Farmers are reluctant to use vaccines or are unaware of the benefits - Lack of energy and protein sources for pigs and poultry and during the dry season for cattle/buffalo - Little appreciation of the role of nutrition in production losses - Little knowledge about local feed sources
	Infrastructure	- Inadequate and inconsistent supply of vaccines
	Marketing	- Poor meat processing and marketing facilities
China	Environmental	- Severe degradation in some areas
	Infrastructure	- Poor infrastructure - Inefficient technical services and disease control
	Political/institutional	- Land rights are weak providing little protection to farmers - Weak bargaining power of farmers
	Marketing	- Distorted price signals - Difficult to gain access to markets
	Production	- Weak ability to invest in pasture improvement

The following observations may be made based upon the responses recorded in this table and upon the discussion that took place in the workshop.

• A problem that was mentioned frequently by participants involved extension. Research results do not seem to be conveyed adequately to farmers, particularly in regard to feeding practices and animal health. Since a large part of the responsibility for animal production is with women and to some degree with children (see Chapter 4 of this report), it appears that greater attention needs to be placed on evaluating the most effective way of conveying extension information to these groups. Surprisingly, however, it was rare for any mention to be made of the need to evaluate the economic merits of different feeding systems. The approach used in many developed countries of providing extension services on a user pays basis was seen by some participants at the workshop as introducing a bias against small-scale farmers. This group often does not have the resources to pay for the extension service.

• The "government" was often mentioned as being able to provide solutions to many of the problems facing the livestock industries. However, livestock farmers were viewed as having little political influence, and so as a consequence according to some participants, their industry was often given a low priority by government policy makers. Mention was made of the importance of effective lobbying by farmers to achieve their objectives. Increasing the role of government seems contrary to the moves being made in many countries to deregulate their economies and it may represent dissatisfaction with private sector outcomes that are viewed by some as downplaying the social dimension of any action.

• Because it was often the case that different government agencies - often with quite divergent agendas - had an interest in livestock, it turned out that in some countries policies lacked consistency. The claim was made that the agencies sometimes represented different ministries or came from different levels of government. A number of participants drew attention to the presence of subsidies in other agricultural and/or non-agricultural industries, and were critical of the damage that these subsidies were doing to the livestock industries. Other participants commented that the multiplicity of organizations/agencies with an interest in livestock meant that otherwise satisfactory policies failed to operate. The policies were not the problem, it was the implementation that caused the problems. One participant stressed the need to get the institutional arrangements correct as a way of ensuring that policies operated efficiently so that unanticipated side effects did not arise. An example of the number of ministries involved in the livestock industries is provided in Box 15.

Box 15 Government agencies and Sri Lanka's livestock sector

Abeyratne (2001) describes government agencies in Sri Lanka. "The institutional support for the livestock industry in Sri Lanka is provided both by the state as well as private institutions. The state sector is mainly engaged in policy formulation and implementation and providing the public goods while the private sector, input supplies and marketing facilities. Several Ministries and state institutions are involved in livestock policy formulation and implementation and the supply of the public goods. The main Ministry responsible for livestock policy formulation is the Ministry of Livestock Development and Estate Infrastructure. There are other Ministries like, Ministries of Finance and Planning; Agriculture, Cooperatives and Food; Trade and Commerce; Health; Education and Higher Education; Mahaweli Development; Industries; Provincial Councils; Social Welfare and Samurdhi Development; Rehabilitation, Lands, Environment, etc. Thus policy formulation and implementation becomes a rather difficult matter when such a large number of Ministries are involved. When such a large number of Ministries are involved in livestock development, it is obvious that most state Departments under each Ministry too will be have something to contribute. Thus implementation of a clear government policy becomes rather a complicated matter."

• Concerns were expressed about the marketing activities of middlemen, particularly in regard to their dealings with farmers. With urbanization and rural to urban migration, farmers remaining in rural areas will move away from being purely self-sufficient operations and begin to become more active participants in the market. Hence, providing them with market opportunities will become an increasingly important issue. Information asymmetries were mentioned as a problem. In the case of Nepal, for example, one participant felt that small farmers would benefit greatly from the establishment, through public funds, of a village based livestock market. Scales for the weighing of livestock would prevent the farmers being exploited by the middlemen/traders, who through their experience are apparently much better at gauging the weight and yield of an animal than the farmer.

• The access of developing countries to export markets was mentioned as a problem for developing country livestock industries. Non-tariff barriers, particularly phyto-sanitary regulations, represent a form of government intervention in developed countries that developing countries lack the capacity to influence through negotiations. The reform of these barriers is a goal of the multilateral negotiations being conducted under the auspices of the World Trade Organization.

• Traditions, cultural practices and religion limit the economic opportunities available to the farmers in the livestock sector and at the same time represent a drain on available resources. While religion prohibits the slaughter of cows in India, the utilization of by-products such as hides from animals that have died of natural causes is not well organized and as result this potentially valuable resource is often lost (Chapter 4 of this report provides some background on India's hide production). These issues are also of importance in the design of livestock based programmes intended to achieve improvements in human nutrition. In India, for example, there are cultural biases against the consumption of goat meat and pigmeat and so programmes where these meats are intended to play a central part may have limited success.

• Infrastructure, particularly its limited nature, was mentioned as being a problem on a number of occasions. The availability of animal medicines and the staff to administer these, and transport and handling facilities, the shortage or unavailability of cold storage facilities and slaughtering/processing facilities were examples of the infrastructure problems that participants identified. Regulations also operated to prevent the full utilization of infrastructure. In Bangladesh, for example, government regulations disallow the use of slaughtering facilities three days of each week.

Many - if not all - of the issues raised in Table 1 have also been identified in other fora as problems/issues. For example, in an Asian Productivity Organization seminar into marketing systems for farm products in Asia and the Pacific held in 1989, the problems listed included: inadequate collection, analysis and dissemination of timely and relevant marketing information; inadequate market infrastructure and facilities such as roads and transport, storage and warehouses, packaging and processing facilities; a bias towards production in the provision of institutional credit resulting in limited loans for marketing purposes; and absence of certified grading system/non-implementation of proper grading and standards (Asian Productivity Organization 1990). The same organisation in another seminar, but this time into agricultural cooperatives, found that cooperatives suffered because of marketing problems, government policy and intervention (some participants thought that there was too little, while others too much) and a lack of access to credit (Asian Productivity Organization 1991). A paper by Riethmuller and Smith (1999) into problems identified by Indonesian dairy experts came up with broadly similar results: the need for improved animal genetics, better extension and the need for improved animal health. That the same set of problems continue to persist is indicative of the degree of difficulty in resolving these problems.

Concluding comments

Policy makers are faced with the problem of allocating scarce research resources into areas that are likely to provide the greatest net benefit to the economy funding the research. To help them in this process, research of the type reported in this chapter is invaluable since it helps identify the priority areas. Production, marketing and infrastructure related issues were seen by the workshop participants to be of most importance to the livestock industries. Surprisingly, there was very limited discussion of the negative externalities associated with the intensive livestock industries. To a large degree, this was possibly a reflection of the belief no doubt held by many "that little or nothing could be done" to remedy these externalities. There would appear therefore to be a potentially high payoff from documenting the various approaches that have been taken in developed countries to help developing country policy makers devise feasible options. In the design of any policies, it needs to be recognized that a substantial part of agricultural production is provided by resource-poor farmers. This situation does not exist in the developed countries where fewer producers are providing an increasing share of production.

References

Abeyratne, A. S. 2001. Perspectives and Strategies for the Asian Livestock Sector in the next Three decades (2000-2030) - Sri Lanka. Unpublished report prepared for FAO, Bangkok.

Asian Productivity Organization. 1990. Marketing Systems for Farm Products in Asia and the Pacific. Tokyo.

Asian Productivity Organization. 1991. Agricultural Cooperatives in Asia and the Pacific. Tokyo.

Riethmuller, P. and D. Smith. 1999. Strengths and Weaknesses of the Indonesian Dairy Industry. Livestock Industries of Indonesia prior to the Asian Financial Crisis: RAP Publication 1999/37. FAO. Bangkok.