The developing world’s smallholder livestock sector

Board of the International Federation for Animal Health, Brussels, 25 April 2013

Jimmy Smith

The global livestock sector

Total animals:17 billion

Asset value:$1.4 trillion

Employs:1.3 billion people

Uses:1/3 of the earth’sice-free surface

0

50,000

100,000

150,000

200,000

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Mill

ion

tons

Developing

Developed

Where is the growth?Gains in meat consumption in developing countries

is outpacing that of developed countries and this is expected to continue

Four of the five highest value globalagricultural commodities are livestock products

4Source: FAOSTAT, 2010 data

Growing Incomes are a key catalyst to demand growth for livestock products

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0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000

Per

cap

ita m

eat

co

nsu

mp

ion

(kg

/year)

Per capita GDP (US$ PPP)

US

Japan

Chi

Ind

Bra

Rule of thumb:

Growth in demand for Animal source foods begins to levels off when incomes exceed $10,000.

Percentage increase in demandfor livestock products

Developing Countries Developed Countries0

20

40

60

80

100

120

MeatMilkEggs

2000 to 2040

IFPRI-ILRI IMPACT model results

Far higher growth in demand will occur in developing countries

Global food production: From where?

Herreret al. 2009

Developing-country mixed crop-livestock systems, predominantly smallholders, supply the large proportion of livestock products

By 2040, 70% of global beef and milk will be produced in developing countries by smallholders in transition

2000 204040

45

50

55

60

65

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85

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BeefPorkLambPoultry MeatEggsMilk

IFPRI-ILRI IMPACT model results

%

Source: (Steinfeld et al. 2006)

Large productivity gaps between richand poor countries are not closing

Some developing country regions have gaps of up to 430% in milk

Africa Latin America South Asia Industrialized Countries

4111021

517

4226

397

1380904

6350

Milk (kg/cow/yr)

1980 2005

Animal disease remains a key constraint

Young Adult

Cattle 22% 6%

Shoat 28% 11%

Poultry >50% 30%

Source: Otte & Chilonda; IAEA

Annual mortality of African livestockAround half due to preventable or curable diseases

Endoparasit

esPPR

CBPP

Ectopara

sites

CCPPFM

DTry

ps

Shoat pox

Newcastl

e

Bruce

llosis

Bovine TBLS

DRVF

ECFBVD

0

1

2

3

4

5

6

7

8

South AsiaAfrica

Billi

on $

lost

yea

rly

Annual losses from selected diseases –Africa and South Asia

Estimates from BMGF

AfricaSouth Asia

Modeling gains from dairy technology interventions - Value of change in milk yield and herd growth

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

Genetics Feed Animal Health

Herd Mgmt

Perc

ent i

ncre

ase

due

to in

terv

entio

n

Reducing disease can increase milk yields up to 350% - greater than improving feed, genetics or management

Source: ILRI 2010

Smallholder livestock keepersare competitive

1. East African dairy In Kenya, 1 million smallholders keep the largest dairy herd in Africa

(larger than South Africa)

The lowest-cost milk producers globally are found in Uganda

Small-scale Kenyan dairy producers get above-normal profits of 19-28% in addition to non-market benefits (finance, insurance, manure, traction) of a further 16-21% (source: SDP-ILRI, 2005)

Small- and large-scale poultry and dairy producers in Kenya have the same levels of efficiency and profits (source: Omiti et al., 2004)

2. Vietnam pig industry 95% of production is by producers

with fewer than 100 animals

Pig producers with 1-2 sows have lower unit costs than those with more than 4 sows (ILRI 2010)

Models show industrial pig production could grow to meet no more than 12% of national supply in the next 10 years

Smallholders will continue to provide

most of the country’s pork for years to come

Smallholder livestock keepersare competitive (cont.)

Key points related to smallholder competitiveness

Smallholders will continue to supply most of thelivestock products in most developing countries

There will be different trajectories of livestock growth,with strongest dynamics in Asia

In many regions,smallholders will increasinglycommercialize theiroperations

Demand foranimal healthinputs will increase

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Increasing opportunities for animal health inputs

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As smallholder producers in the developing worldcontinue to commercialize, they increasingly payto reduce their animal disease burdens.

Potential private-public synergies

Joint public-private testing of innovations:– Innovative franchise models are providing smallholders with

access to agro-vets (‘Sidai’ in Kenya) – New low-cost, pen-side diagnostic tools are providing

diagnostics for smallholder settings– New mobile phone systems are helping farmers monitor

the health and reproduction of their animals (‘iCow’ in Kenya)

Enlightened self interest for poor and rich alike:Research on some disease of the South (e.g., African swine fever) can reduce threats of those diseases moving to the Northdue to climate change and increased trade

Challenges for private-public partnerships

Different animal health models and trading systems:− Need to understand demand for inputs and then test product

applications− Need innovative, low-cost products that meet smallholder

needs− Need new delivery systems that match smallholder settings

and infrastructure--Risk based rather than hazard based food safety regulations--Commodity based trade

Key messages

Demand for livestock source foods is growing faster in the in the developing than the developed world

Smallholder producers are now and will continue to be a large part of the supply response for decades to come

Animal health constraints are binding in developing countries

As smallholder systems modernize, their need for animal health and other inputs will grow

New opportunities exist for synergies between private and public investments in animal health

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