Benefits and risks of globalized livestock markets
Committee on Agriculture discusses the impact of globalization on livestock production
13 April 2005, Rome - Globalized livestock markets can increase national income and improve nutrition, but they are also posing potential risks to livelihoods, human health and the environment.
The livestock sector, traditionally based on local production and consumption, supports the livelihoods of an estimated 600 million rural poor, FAO said in a report submitted to the agency's Committee on Agriculture, meeting in Rome from 13-16 April 2005.
Meat production in developing countries has grown by 230 percent and milk production by 200 percent since the early 1980s. Population growth and higher incomes have both contributed to rising demand. By 2030, FAO estimates, the developing world will consume almost two-thirds of the global milk and meat supply, compared to just one-third 25 years ago.
International trade in livestock products has increased from four percent of production in the early 1980s to about 13 percent in 2003. In value terms, several developing countries - notably Brazil, China and Thailand - are among the top 20 exporters and importers of livestock products.
Benefits and risks
The benefits globalized markets are offering to producers, traders, processors, suppliers, retailers and consumers are: new employment opportunities, increased income, direct cost savings and an increased choice of products, FAO said. Consumers will also benefit from more competition, reduced prices and an increase in product quality due to higher food standards.
"Well managed, a globalized livestock sector can benefit the national economy, provide employment, promote technology transfer, increase food safety and raise the diversity of food products available. However, there is potential for adverse effects in the form of market exclusion, heightened risk and negative externalities," FAO said.
For small producers, for example, it may be difficult to make the necessary investment. Large retailers and supermarkets often tend to shift to centralized procurement systems, selecting producers meeting quality and safety standards. Safety and quality requirements can become non-tariff-barriers, as expensive to overcome as the former tariffs.
"Non-tariff barriers still exist, and appear to be growing, in the form of requirements and regulations, related principally to food safety and animal health but perhaps in the future to other factors such as animal welfare and environmental concerns," the report noted.
Globalized markets are typically riskier for producers, FAO said, since the entire market can close down with the outbreak of a disease or the discovery of a quality problem.
"Outbreaks of transboundary diseases such as foot-and-mouth disease, Contagious Bovine Pleuropneumonia and new threats such as Avian Influenza, cause disruption within national, regional and international markets." Smallholder producers and small traders have limited scope and ability to insure themselves against losses.
Another concern in developing countries is the pollution of soil and water caused by waste from commercial livestock units.
FAO proposed a framework to help member countries deal with globalization's unintended consequences. "Demands and complexities are likely to grow, not diminish," the report said, calling for greater dialogue between the international community and national governments and between the public and private sectors.
The FAO Committee on Agriculture, which meets every two years, will also discuss Sustainable Agriculture and Rural Development (SARD) and Good Agricultural Practices (GAP) and FAO's Strategy for a Safe and Nutritious Food Supply.
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