The particular goal of this research is to decompose the historical—and projected— changes in livestock productivity into two components: shifts in the global technology frontier, and movement towards that frontier by individual regions.
Our historical analysis shows that the situation can be very different across products for the same country. Mainly efficiency growth or catching-up can explain productivity growth in pig production in the developing regions since 1961. China’s growth in efficiency explains most of its productivity growth in pig production. Movement in the pig frontier was relatively low and appears to be slowing down. Poultry and milk productivity offer a very different picture from developments in the pig sector. Here, it is movement in the frontier that has been dominating the industry over the past three decades and many of the regions have been falling further behind. These are clearly the most dynamic sectors and the ones where there is the greatest future potential for growth due to catching-up. However there are several important exceptions to this general trend. Poultry production in China and beef production in Korea have been catching-up to the frontier at a remarkable pace in the 1990s.
To assess the likely consequences of future changes in livestock productivity on international trade in livestock and related products, we used a modified version of the GTAP model of global trade to make projections to the year 2005. Uncertainty in future productivity growth rates was also taken into account. Our findings are that Asian countries show negative impacts on the trade balance of livestock products with the exception of China that will need high productivity growth rates between 1995 and 2005 to avoid deterioration of the trade balance in livestock products. In general, for the Asian countries we can see the trend toward increasing imports relative to exports in most of the agriculture-related sectors especially in the case of grains and other crops. Among the developing regions, South America appears as a major exporter of beef and other meats and sub-Saharan Africa shows deterioration in the trade balance of all livestock products. All developing regions will keep negative trade balances in dairy products.
By recognising the uncertainty associated with the estimates of livestock productivity growth worldwide, we obtained confidence intervals for the trade balances which show that China will still be a net exporter of livestock products in the year 2005 (in the absence of any major policy changes). Our results suggest that other East Asian countries will mostly be net importers and the developed countries and South America will be net exporters of livestock products.
