Before determining possible pathways out of poverty in which livestock can play an important role, ILRI examined the innovation process, which it divided into three interrelated components that are dynamic and overlap. These components never develop in a linear fashion but are characterised by dialogue and interaction among all those involved:

• adoption of research products, including new and existing knowledge, technologies and policies
• improvement or adaptation of existing tools, methods and approaches to make them better or more applicable to particular situations
• strategic research, involving the development of new tools and new approaches.

1. securing the current and future assets of the poor 
2. sustainably improving the productivity of agricultural systems of the poor 
3. encouraging participation of the poor in livestock-related markets.

Pathway 1—Securing the current and future assets of the poor

Livestock are important material and social resources for many of the rural poor and some of the peri-urban poor in the developing world and play integral roles in their lives. They are especially important assets for pastoralist people and make a greater contribution to their household economies and food security than in any other production system.

In some cases livestock are the only material asset that the poor can accumulate, and even the landless can do so by using communal feed resources, waste products and purchased feeds. For the poorest of the poor, livestock can, in some situations, be the first step along the pathway out of poverty.

Roles of livestock keeping revolve around storing wealth, contributing to food and nutritional security, providing draught power, transport and manure, and serving traditional social functions. But the productivity of the animals of the very poor is often low in yield of marketable outputs. However, although their productivity may be limited, these animals may possess other valuable traits such as disease resistance. Threats to the security of these vital assets include disease, theft and predation, drought, floods, earthquakes, seasonal feed deficits and site-specific nutritional deficiencies. Poor livestock keepers often reduce risk by keeping more than one species of animal. For example, pastoralists might keep cattle, or camels in arid regions, together with sheep and goats while mixed crop–livestock farmers might keep buffaloes, pigs and poultry.

Security of future assets of poor livestock keepers is equally important. It requires access to land and to natural resources and sustainable management of them. Factors such as HIV/AIDS and urban drift reduce the availability of family labour, which threatens current, labour-intensive, farming practices.

The combination of the factors that limit sustainable farming systems and the risk of devastating shocks reduce the capacity of the poor to either maintain or accumulate assets, thus limiting their ability to move out of poverty.

Pathway 2—Sustainably improving the productivity of agricultural systems of the poor 

Better livestock production efficiency (such as better use of land, labour and water) and greater use of inputs can improve productivity–of both indigenous and improved breeds. For example, productivity of local poultry breeds can be improved by vaccinating against Newcastle disease, protecting chicks from predators, and perhaps adding dietary supplements. Introducing improved breeds can increase productivity significantly, such as by replacing low-yielding zebu cattle with much higher-yielding crossbred or purebred dairy cattle in suitable smallholder dairy systems.

Improved breeds, however, are likely to be less disease resistant and require more inputs in feeds and in preventive treatments than indigenous breeds. Without them, the level of risk can increase significantly. Livestock keepers also need to practice a higher level of management, like stall-feeding units for cattle and balanced feeds for poultry. They also need reliable access to feeds and to animal health and breeding services. They must be able to handle seasonal feed shortages and any nutritional deficiencies. To do this means additional labour and capital, and lack of access to capital or credit is a critical constraint to this pathway out of poverty.

Pathway 3—Encouraging participation of the poor in livestock-related markets

Participating in livestock-related markets offers the poor, and especially women, a possible route to better livelihoods. This presents them with an opportunity to benefit from the increase in demand for meat and other livestock products predicted as part of the Livestock Revolution. Better market access can secure better income and welfare for smallholder livestock producers. By creating demand, markets promote economic growth. Markets also help accumulate material assets. They provide a means towards improved nutrition and balanced diets—and thus help reduce poverty. It is also important to keep in mind the wide range of other roles that livestock play in many societies. The challenge is to strike a balance between market opportunities and the non-financial roles that livestock play in the lives of the poor.

A wide range of livestock-related goods and services can be marketed: traditional products—live animals, milk, meat, offal, hides and skins, wool, eggs, feathers, bone, horn, manure—and services such as transportation and tillage. Value can be added for some of these products, for instance, by transporting animals or produce to distant markets where prices are higher; by processing milk to make products such as yoghurt; and by turning raw materials such as horn, bone and hides into craft items. Markets for non-traditional products and services are also emerging, such as payment for stewardship of biodiversity, eco-tourism, and perhaps in the future, carbon credits.

The ability of the poor to exploit these diverse marketing opportunities will in many cases be limited. They will not have the know-how, business contacts, capital or credit facilities. Roads to markets will be poor and communication systems lacking. Competition from large-scale producers may be overwhelming. And the small-scale producer may not be able to comply with animal disease control measures such as movement controls and quarantines or with public health legislation. Such barriers to market access limit opportunities for employment in livestock-based enterprises for the poor or for them to create enterprises. In many societies women’s access to markets is even more restricted.