Investments needed to help poor people take advantage of an on-going boom in livestock production in developing countries

Ploughing with cattle in West Bengal

Farmer Noor Ali ploughs his field in Brahampur, India. A better understanding of the multiple roles played by livestock in developing communities will help improve livestock production and accelerate economic development in poor countries (photo credit: ILRI/Mann).

Following the 2008/9 global food price crisis, agricultural experts agree that more investment in food production is needed to meet increasing world food demand. Global food security, however, is unlikely to be achieved unless livestock production is made more efficient.

Farm animals fulfil an important role in developing communities, where many people depend on mixed crop-and-livestock farming systems or live in marginal areas where animal agriculture is the only means of producing food. For most of the world’s poorest, about 600 million people, animals provide not only milk, meat and eggs but are also a source of draught power and manure for crop farming, resources that help livestock keepers diversify their income.

For many of these livestock keepers, greater investment in livestock production would make a significant difference in helping them come out of poverty by increasing their sources of food and income. 

The role of livestock in developing communities: Enhancing multifunctionality, a new book co-published by the University of the Free State South Africa, the Technical Centre for Agricultural and Rural Cooperation (CTA) and the International Livestock Research Institute (ILRI), argues that a better understanding of the multiple roles played by livestock in developing communities will help decision-makers and development practitioners not only improve the livestock sector’s efficiency and productivity but, through that, accelerate economic development in poor countries.

Livestock production in the developing world faces the challenge of how to meet an increasing demand for meat, milk and eggs with limited land, water and other natural resources, say two of the book’s authors, Siboniso Moyo, ILRI’s representative in southern Africa, and Frans Swanepoel, senior director of research and professor of sustainable agriculture at the University of the Free State, in Bloemfontein, South Africa.

Examining trends and drivers in livestock production in developing communities, the authors say that the smallholder livestock sector needs to adapt to increasing population and urbanization and the other changes coming in the wake of these changes, such as rapidly changing livestock systems, environments, climates and consumption patterns. All these changes, they say, require stronger policies and institutions.

The authors propose strengthening institutions and policies, providing livestock owners with credit, improving veterinary services, increasing the delivery and uptake of livestock technologies and improving the infrastructure of livestock markets.

The increasing demand for livestock in developing countries due to rising populations and incomes offers many poor livestock keepers new opportunities to raise their incomes by increasing the production and marketing of their livestock products. The main questions are how to include poor people in this livestock boom, and how to help smallholders increase their livestock production while making more efficient use of their land, water and native stock.

Three other big challenges of the fast-changing livestock sector in poor countries are finding ways to feed the increasing numbers of animals in the face of diminishing natural resources, developing diagnostics and vaccines to better protect animals against neglected tropical diseases of livestock as well as zoonotic diseases, which are shared by livestock and people, and finding optimal ways for small-scale livestock keepers to adapt to climate change and reduce their production of greenhouse gases.

The authors, however, note that rising prices of livestock products can open up new market opportunities for small-scale producers, though this alone will not guarantee their competitiveness. Without support, many smallholder livestock producers, especially those in marginal areas, with limited access to information and knowledge, will find it difficult to compete with larger livestock operations in meeting the increasing demand for livestock products while also meeting the more stringent food quality and safety standards the new market is demanding.

‘The livestock sector is an important part of developing communities and the multiple roles that livestock play in meeting the livelihoods of people need to be enhanced for the sector to continue contributing to poverty reduction,’ the book says. ‘Research and development agencies need to come together to address these challenges comprehensively.’

This book provides a list of ‘Livestock development projects that make a difference’ and ways to promote gender equality and empower women through livestock development. Watch for more highlights from the book in upcoming ILRI news articles.

Read more about The role of livestock in developing communities: Enhancing multifunctionality

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Index-based livestock insurance project in northern Kenya wins best practice award

Andrew Mude of ILRI receives IBLI award

Andrew Mude of ILRI receives the best-practice award for the Index-based Livestock Insurance project from Manfred Wiebelt, the director of PEGnet (Photo: PEGnet) 

The International Livestock Research Institute (ILRI) led Index-based Livestock Insurance (IBLI) project in northern Kenya, which provides livestock insurance to over 2000 households in Marsabit district to help livestock herders sustain their livestock-dependent livelihoods during drought, has received a best-practice award from the Poverty Reduction, Equity and Growth Network in recognition of the project’s innovative approach of combining scientific research and practice.

The award was presented to Andrew Mude, an economist with ILRI, who also heads the Index-based Livestock Insurance project, during the Poverty Reduction, Equity and Growth Network’s conference ‘Policies to Foster and Sustain Equitable Development in Times of Crises’ held in Midrand, South Africa, on 2-3 September 2010.

Over the past two years, ILRI in collaboration with partners from Cornell University, the BASIS I4 project at the University of California – Davis, and Syracuse University, have come up with a research program that has designed and developed the insurance program. It is now being implemented by commercial partners as a market-led index-based insurance product that is protecting livestock keepers from drought-related animal losses particularly in the drought-prone arid and semi arid areas of Kenya. The program uses satellite imagery to determine and predict potential losses of livestock forage and issue insurance payouts to participating members when incidences of drought occur.

The first pilot product of this project, launched in January 2010 in Marsabit, brings together Equity Bank of Kenya, UAP Insurance and Swiss-Re as commercial partners who are running a commercially viable insurance product. This is a first-of-its-kind initiative in Africa and it holds enormous potential for benefitting livestock keepers in the region and across the continent. So far, the project has recorded over 2000 contracts covering livestock worth over US$1 million and attracting premiums of over US$77,000.

The project is expected to bring economic and social benefits to livestock keepers and protect households against drought-induced livestock losses thereby reducing their likelihood of descending into poverty. By insuring the assets of pastoralists against catastrophic losses, members will be able to come out of poverty, be protected from the risk of falling into poverty and at the same time will have opportunity to explore other activities for household economic development.

The impact of the project is currently under assessment to find out its benefits before it can be scaled up to other districts in the country. 

The Poverty Reduction, Equity and Growth Network brings together researchers with an interest in issues revolving around poverty, inequality and growth in developing countries and links them to German development policy bodies with the aim of among others, using research results for policy advice on pro-poor growth strategies.

More information about the Index-based Livestock Insurance project can be found on the project website: www.ilri.org/ibli/

The following ILRI news article shares information about the project’s launch in Marsabit:  http://www.ilri.org/ilrinews/index.php/archives/1440

To find out more about the Poverty Reduction, Equity, and Growth Network’s 2010 conference please visit http://www.pegnet.ifw-kiel.de/

Big optimism for Africa and Asia at global and African forums

Sere_InACrowd2_FARA2010_ByMcGaw

World leaders say 'big powers must tap into the dynamism of the developing world'

Time Magazine's report Look who's leading on the Global Forum it hosted in June 2010, along with Fortune and CNN, in Cape Town was full of good news for and from the leaders of ('what we will soon have to stop calling') the developing world. Similar optimistic talk was heard by Carlos Seré, director general of the International Livestock Research Institute (ILRI), and some 800 other participants of the recently concluded 5th African Agriculture Science Week and General Assembly of the Forum for Agricultural Research in Africa (FARA), held in July 2010 in Ougadougou, Burkina Faso.

From the FARA Week 2010 blog:
'The FARA General Assembly occurred amidst growing interest from both inside and outside of Africa on how to realize the continent’s untapped agricultural potential. A report released earlier this month from McKinsey & Company predicts Africa’s agriculture sector could rapidly advance from generating US $280 billion a year today in revenue to $500 billion by 2020 to as much as $880 billion by 2030. According to some estimates, Africa has 60 percent of the world’s remaining arable land and an unmatched bounty of natural resources and plant and animal biodiversity.'

From Time Magazine:
'The theme of the [Global Forum] was the New Global Opportunity. The phrase is not just a recognition that, as the world economy emerges from the Great Recession, there are markets aplenty in the developing world but also that, if we are wise, we will take the chance to build an economy that is more inclusive than before and more respectful of the need to conserve natural resources for future generations. That way, everyone will benefit. As former U.S. President Bill Clinton said in a keynote address to the forum, right now the world is "too unequal and too unsustainable to be stable." But it doesn't need to be like that. The question facing the more than 350 leaders of government, business and civil society assembled in Cape Town was how to help build a different world.

'The developed economies of the Atlantic region are seeing a fragile recovery at best, one with little growth in jobs — and even that slow growth is threatened, in the view of many economists, by the hair-shirted fiscal tightening that has been seen of late in Europe. Concomitantly with the forum, world leaders at the G-8 and G-20 summits in Canada were wrestling with the question of how long stimulus programs that have injected much-needed demand into economies could be continued. In that context, the performance of what we will soon have to stop calling the developing world has been tremendous. China grew by 8.7% in 2009, according to official figures. India showed excellent growth too, and even in Africa — so long dismissed by seers as an underperformer — growth hit 2% before the recession took hold, which followed years when the continent was growing at the historically robust rate of 6% or more.

'This isn't simply a function of the famous BRICs — Brazil, Russia, India and China — setting the pace. Indeed, as veteran global economist Kenneth Courtis of Themes Investment Management pointed out, Russia has fallen out of the club of most-favored developing economies, having been unable (so far) to use its endowment of natural resources to build truly world-class companies. With Indonesia increasingly catching the attention of business leaders, and Africa too, it might be time to try a new acronym: ABICI, for Africa, Brazil, India, China and Indonesia. Whatever you call them, the performance of the leading economies of the developing world has been sufficiently robust that political leaders like Rob Davies, South Africa's Minister for Trade and Industry, were able to trumpet the potential of south-south trade — while acknowledging that even the best-performing southern economies had been hurt by the continuing weakness in the rich world.

'The caveat is important, especially if, as Oxford University's Ian Goldin warned, there remains the real risk of a double-dip recession in the most-developed economies. Household-debt levels remain worryingly high, which is bound to dampen the recovery of consumer spending, and some banks still have substantial exposure to overvalued assets. But the worrywarts notwithstanding, corporate titans in Cape Town could hardly restrain their sense of excitement about the opportunities in the developing world. For AstraZeneca's CEO David Brennan, DuPont's chair and CEO Ellen Kullman and management consultancy McKinsey's global managing director Dominic Barton, the story of the recession was the acceleration of a trend toward growth in the developing world that had been under way before the downturn started.

'It isn't just that the developing world provides vibrant markets — 84% of the world's population lives outside the combined area of the North Atlantic economies, Japan and the four original Asian dragons — that explains the new corporate focus. Increasingly, it is the potential for low-cost innovation in the poor world that can provide goods and services that can be sold everywhere. From telecom to banking to medical supplies, companies are finding business processes and products in the poor world that they can apply and sell everywhere.

'. . . From the perspective of developing nations, the question of talent takes on a different hue. There is a growing consensus among development economists that the key driver of China's stellar success in the past 20 years has not been government policy (however effective it may have been) or the technocratic skills of its public-sector managers (though they are certainly impressive). It is that for two generations — going back to the dark, autarkic days of Maoism — China has educated its women. China would not have been able to become the workshop of the world if its factory workers, mainly girls and women, did not have the literacy and numeracy essential to perform assembly tasks. If there is one lesson from China that African nations (and ones in South Asia too) need to learn, it is that you cannot build a modern economy if you ignore the innate talents of 50% of your population.'

More . . . (Time MagazineLook who's leading, 12 July 2010, and FARA Week 2010 blog