Prosperity

Globally, livestock contribute about 40% of agricultural gross domestic product (GDP) and provide livelihoods and incomes for at least 1.3 billion people. However, despite their economic importance, livestock receive just a small fraction of official development assistance to agriculture. With more investment, livestock production can be the economic driver for millions of people in low- and middle-income countries.

Contribution to the economy

Although livestock’s share of agricultural GDP is generally higher in high-income countries than in low- and middle-income countries, it is expected to grow in low- and middle-income countries. While this growth will generally benefit livestock producers, they face risks. One is that small- and medium-scale producers will be confined to local and informal markets while commercial producers benefit most from the growth in larger, more integrated markets. Another risk is that, depending on a given pathway of livestock development, environmental hazards and resource degradation may occur.

While the private sector can capitalize by investing in this livestock growth, public investments are needed in market infrastructure and public-private partnership mechanisms. In addition, policy support and investments are necessary to drive technologies and strategies that increase livestock resource efficiency and mitigate environmental threats.

Livestock investments

National public-sector livestock investments are low in most low- and middle-income countries. Public resources commensurate with the livestock sector’s contribution to economic growth should be invested to ensure increased productivity and participation by smallholders so they can capitalize on new market-driven opportunities. Evidence should be used to prioritize public agricultural investments with the highest potential for rural growth and returns to investment.

Market and trade opportunities

Policies should facilitate trade in underexploited regional markets by removing non-tariff trade barriers, harmonizing standards and investing in trade infrastructure. Domestic livestock markets are generally much larger than export markets in low- and middle-income countries, with 90% of livestock products produced and consumed in the same country or region. Policies should respond to this domestic demand and provide incentives for increased value addition and supply efficiency among locally processed livestock products, with priority to traditionally consumed products.

Export-oriented policies that require large infrastructure investment should be weighed against realistic assessments of the potential benefits, including an understanding of the constraints imposed by sanitary and phytosanitary regulations and product quality standards.

Smallholders and livelihoods

Given the importance of smallholders in supplying low- and middle-income countries with livestock products, increased smallholder productivity and production is essential to meet the growing demand for these products. This will require policy and infrastructure support to help smallholders access critical inputs and services (for example, animal breeds and feeds and veterinary services).

Approaches are also needed to help small- and medium-scale farmers participate in livestock product markets in ways that allow them to comply with increasingly stringent market standards, such as via innovative business-oriented collective action or contractual approaches to gain from economies of scale and joint capacity development.

Many poor households rely on livestock assets for insurance and savings and so tend to keep surplus livestock, which may have negative effects on the environment. Policies should provide alternative insurance or financing options, such as a weather-based insurance index and reliable savings plans, to allow livestock keepers to manage their animals with a more market-driven orientation.

Employment and income

The livestock sector should be integrated into national rural development policies and programs. It has growing potential to create employment for the youth and women, not only in livestock keeping but also in processing livestock products, producing and selling livestock feeds and providing livestock information services.

Sustainable development policies in dryland settings should balance the goals of improved livelihoods of livestock keepers and environmental conservation. While policies should account for the fragility of many pastoral environments and support sustainable livestock keeping, they should also help diversify enterprises beyond livestock. New public-private partnerships should also be supported to provide veterinary services in remote pastoral settings.

ILRI News on Prosperity