Statistics published by government agencies provide information on the production of livestock products such as meat, milk, eggs, hides, feathers, wool and skins and products derived from these. However, the role of livestock in developing countries is much broader than this. Livestock are important culturally and may be part of religious beliefs and practices (Ashdown 1992; Horowitz 2001; Harris 1978); in establishing the status of the farmer (Birner 1999); as providers of employment to the farmer and/or family members (Sansoucy et al. 1995); in helping achieve food security (Food and Agriculture Organization, 1999); as a store of wealth (Council for Agricultural Science and Technology 2001); as a form of insurance (Fafchamps and Gavian 1996); in contributing to gender equality; in the recycling of waste products and residues from cropping or agro-industries (Ke 1998; Steinfeld 1998); in improving the structure and fertility of soil (de Wit et al. 1997); in controlling pests (Pelant et al. 1999); and for the amusement and recreation of children and adults living in rural areas (Abeyratne 2001; Hai 2001).
Many of those functions listed above do not involve marketable output. Consequently analyzes of livestock industries in developing countries sometimes overlook or downplay the various contributions made by the livestock industries to the economy, particularly those that do not involve the market. Instead, attention might be focussed only on a limited number of activities, such as the ability of an animal to produce meat or milk. As much as anything, this reflects the difficulty researchers and policy advisers face in agreeing which of the functions performed by livestock - such as those outlined in the previous paragraph - are really important. Further complications are that the role played by livestock is likely to vary within different parts of the one country, and almost certainly between countries. The functions are also likely to change over time as economic conditions and also as the goals and objectives of livestock owners change. Moreover, it needs also to be recognized that many of the functions of livestock are overlapping.
The purpose of this chapter is to make use of examples from the countries of the Asia-Pacific region to illustrate the diverse roles played by livestock. However, the description of livestock functions is not intended to be exhaustive. Already Chapter 1 has pointed out that livestock are important as a food source to people living in the Asia-Pacific region. Hence, this role will not be explicitly discussed in this chapter.
Employment and the livestock industries
Livestock are an important source of employment. The Indian dairy industry which is smallholder based, generated income for 24.5 million people in 1987, and an estimated 27.6 million people in 2000 (Bansil 2001). Jobs created on farm by livestock include activities such as the cleaning of manure and feed refusal from barns, as well as the collection of feed. Information on the labour involved in these activities is very limited. Bansil (2001) draws on a survey conducted in the Punjab in 1978-79 that found the average amount labour input in the Operation Flood programme (this is India's dairy programme) averaged 1.7 hours per animal per day. Harvesting, transporting and chaffing of fodder accounted for 58 percent of total labour input; feeding accounted for another 19 percent of the labour that was used; and milking, watering and sweeping the animal shed accounted for another 7 to 8 percent of the labour used. Sri Lanka is another country where the livestock sector is important in providing employment. Abeyratne (2001) says that the pigmeat and caprine sub-sectors are relatively small, but they provide gainful employment to a large number of people. About 3.5 million of these are traditional Sri Lankan farmers.
Large-scale industrial livestock production facilities such as those found in the intensive poultry or pigmeat industries are capital intensive, but they still provide employment opportunities. Adnam and McCarthy (1998), for example, have estimated that a 5 000 head cattle feedlot in Indonesia would employ 10 supervisors and 30 workers, providing a livelihood for 40 families. At the time they prepared their report (July 1998), there were 46 feedlots in Indonesia with a capacity of approximately 130 000 head, leading them to conclude that feedlot employment could support 1 500 families. Apart from the direct employment associated with this form of activity, jobs created in rural areas can have important spillover benefits to the local economy. Farm families tend to spend in their local area, helping to create employment. Developing country research reported by Mellor (2001), for example, has estimated an expenditure elasticity of 1.5 on locally produced non-farm goods and services.
Livestock industries provide employment for particular groups, but specific details on wages paid, the hours of work involved etc are usually lacking. The cut and carry system is a common feature of the livestock industries of many developing countries. It involves labourers collecting grasses from common property areas for large ruminants, usually kept by small farmers. The availability of this form of employment to rural workers with few alternative employment opportunities is important since it is a disincentive for them moving to urban areas, helping at least to stem the urbanization process and the social problems associated with outmigration from rural areas[16].
The role of the traditional livestock industries as providers of employment to women needs to be mentioned. In most of the developing countries of the Asia-Pacific region, women are responsible for household vegetable and fruit production, poultry raising and livestock care. Mumtaz (1995) cites studies in Pakistan indicating that women spend between one-fifth and one-quarter of their daily working hours in livestock related activities. According to research published in 1988 and quoted by Mumtaz (1995), a sample of rural women estimated that of 14 livestock production tasks, the work done by males in rural families outweighs that of females in only three. These were the grazing and watering of animals, the sale of products to agents, and the care of sick animals. In the cleaning of animals and in caring for those that are sick, the work of both sexes was about the same. Women were exclusively responsible for cleaning sheds, manure collection, egg collection and selling produce to villagers. In the Pacific Island Countries (PIC), women often own poultry - in particular chickens - to provide food for the family. Poultry are rarely sold but may be given as gifts as part of customary obligations. Men in the PIC usually own the cattle and pigs (Ramsay 2001). In China, a socio-economic survey carried out as background information gathered for a World Bank project - the China Smallholder Cattle Development Project - found that women provide over 70 percent of the labour used in household cattle raising. They can effectively carry out cattle operations since they involve cow calf operations within the family compound. In its discussion of these findings, the Bank noted that the All China Women's Federation has been involved in a number of livestock credit schemes for women.
Prior to the IMF intervention in the Indonesian economy in 1997, a policy measure was in place in the smallholder dominated dairy industry of Indonesia requiring that processors use domestic milk before they could make use of imports. Riethmuller et al. (1999) point out that although there were some undesirable economic effects associated with this policy measure, the dairy industry provided at least some employment to over 100 000 operators of small farms and their families. Specific information was not gathered in this study on other employment opportunities these people may have had. It is safe to say their alternatives were limited, illustrating the importance of the dairy industry to the income position and livelihood of these farm households.
Equity, income distribution and livestock
Related to the discussion in the last section, smallholder based livestock industries seem able to improve the income situation of the poor. At the level of the small farmer, cash can be generated regularly from direct sales of livestock products, such as milk, eggs and manure; occasionally from the sale of live animals, wool, meat, feathers and hides; and from fees earned from providing draught power or transport services. Delgado et al. (1999) reviewed studies showing the place of livestock in the income of the rich and poor across a broad range of developing countries. They concluded that the general pattern is for the poor to earn a greater share of their income from livestock than the rich. This is because the poor have limited access to land and capital, and so the rearing of livestock using household waste or common property resources gives them an opportunity to improve their income position. There appears to be no clear consensus among researchers, however, as to the relative importance of large ruminants in poverty alleviation compared to smaller species such as poultry, pigs and goats.
Singh (2001) has drawn attention to the opportunity livestock provides for low-income farmers to accumulate capital, which in turn helps reduce hunger among these farmers. He says that for India ".... 43 percent of people who do not own even a single livestock are malnourished..." (p.23), and that only 14 percent of those with one bovine animal were malnourished. Singh explains that the addition of one cattle or buffalo to the assets of farmers reduces the incidence of hunger by 16 and 25 percentage points, respectively. In India, cattle and buffalo are not given food that can be eaten by the farmer and his family. Instead they are able to exist on crop residues, roadside grasses and waste. They convert this material into marketable products such as milk, manure and traction power, not all of which are fully used (see Box 12). Animals play a crucial role in household food security in other parts of South Asia besides India. In remote pastoral areas of Pakistan, for example, where there is little or no access to alternative food sources, livestock help supply essential nutritional needs through meat and milk.
Box 12 Bovine hides in India
|
In India hides are damaged due to poor flaying especially in the small and unregistered slaughterhouses. At present nearly 35 to 40 percent of leather goes to waste (Bansil 2001). A committee setup by the Government had recommended the utilization of hides from fallen animals, upgrading of lower grade hides and skins, and commercial cattle farming to increase the quality. According to the forecasts prepared by the Indian Council of Leather Exports and presented by Bansil (2001), by the year 2003, nearly 30 percent of the total demand for leather in India would have to be met through imports. India is one the largest bovine leather producers in the world accounting in recent years for 12 percent and 6 percent of global output of heavy and light bovine leather respectively. However, its share in the world trade for bovine leather has been rather small, less than 2 percent for light leather and only 0.6 percent in heavy leather. During the period 1974-76 to 1992, the world trade in bovine heavy leather increased three folds, while India's exports only doubled. A more striking picture emerges for bovine light leather since world trade in value terms jumped more than eight times, while the value of India's exports rose by only 94 percent during the same period. India did not benefit fully from the fast expanding global market for bovine leather. Till the 1980s, India was exporting raw and unfinished leather. This has changed over the years, with the share of value-added products increasing continuously. During the mid-1990s, value added products accounted for 81 percent of the total leather exports, while the share of finished leather had declined from 22 percent in 1992-93 to 18 percent in 1996-97. The leather industry exhibited tremendous growth as a result of simplification of export procedures. The government's decision to encourage exports of value added
leathers; the liberalization of capital good and component imports; increasing
costs of production (especially wages); and growing concern about the negative
environmental impact of tanneries in industrial countries helped improve the
competitiveness of Indian leather products. India's competitiveness is also due
to low wage rates in India (Bansil 2001). |
|||
|
Year |
Cattle and buffalo |
Hide production |
Bovine leather exports |
|
1985 |
271 |
823 |
157.8 |
|
1990 |
270 |
830 |
196.6 |
|
1995 |
296 |
930 |
na |
|
2000 |
314 |
976 |
na |
The part that livestock play in poverty alleviation will vary from country to country, depending on the characteristics of the country and institutional and policy arrangements. In the paper by Singh (2001) referred to in the previous paragraph, the point is made that in India, livestock can improve the income situation of the poor. Dolberg (2001) says the same for Bangladesh. He, and before him Jensen (1997), describes a programme in Bangladesh based upon semi-scavenging poultry that provides employment for women in activities such as hatching of the chicks, preparing animal feed, rearing of layers, the collection of eggs and provision of veterinary services. Dolberg (2001) points out that there is a tendency for landless farmers to own small animals such as goats and poultry.
Earlier it was noted that in the PICs, poultry kept by women are used as food by the family. The nutrition of the members of farm households is one dimension of human capital. Fafchamps and Quisumbing (1998) point out that studies have found higher levels of human capital can improve off-farm earnings for farm households. The effect of higher levels of human capital on farm productivity is unclear. It is not only in influencing the income level of the farm household that livestock will play a part. Dolberg (2001) has observed that the most economically vulnerable households are those with the least assets, and that as asset mix and asset quantity increase, the vulnerability of the household to financial distress will fall. This suggests that a farm household with some livestock (chickens, goats or pigs, for example) in their asset portfolio will be less vulnerable to income shocks than similar households without any livestock in their asset portfolio. Hai (2001) describes the situation in Viet Nam and says that many farmers consider pig husbandry as a means of saving. They utilize their food leftovers and buy the cheapest food for rearing pigs. As the pig grows, the smallholder's "savings" in the pig increases. In many farming systems in Viet Nam, pigs constitute the main, if not the only, capital reserve of farming households. Most importantly, it is a financial reserve that can be readily realised. The World Bank (2001) say that the "banking function"of livestock is declining in most parts of the developing world, although they acknowledge it is increasing in other (unspecified) parts. The Bank attributes the decline of this function to the establishment of informal and formal rural finance institutions, such as the Grameen Bank in Bangladesh and the fall in inflation rates in many countries. Nonetheless, a number of programmes have been developed with the objective of helping farmers accumulate assets in the form of livestock. Box 13 describes a Philippine example.
Box 13 The cattle financing programme for farmer cooperatives in the Philippines
|
The Land Bank of the Philippines operated a programme entitled the Cattle Financing Programme for Farmer Cooperatives. This was a breeder dispersal programme and it had two broad objectives:
The authorities thought these objectives could be met through imports of breeder cattle. Over the period 1992 to 1994, about 20 boatloads - holding approximately 28 000 cattle were imported from the Northern Territory of Australia - and dispersed to 540 cooperatives representing 18 000 farmers. Farmers in the scheme faced a seven-year loan period, with a two-year grace period on interest and principal. The opportunity for participation in the programme depended upon two broad considerations:
The programme was nationwide, but about 25 percent of the
cattle went to the southern island of Mindanao. With regard to ability to repay
the loan, it was thought when the programme was developed that farmers would be
able to get three calves in 7 years. However, in some cases, farmers were unable
to get even one calf. In some other cases, the "borrowed" breeder died, but
insurance covered these losses. Imports of breeders under this programme have
now stopped and only local breeders are being used in the programme. So far,
about 300 head of locally born cattle from the imports have been dispersed to
farmers. The mortality rate associated with the programme has been 32 percent
over a recent five year period - or about 6 percent per year - and about 13 000
calves have been produced over the same period. Given that 41 262 breeders have
been financed under the programme, it has had limited success. The main problem
with the programme has been nutrition and breeding. Industry sources claim
farmers lack proper training in nutrition and also are unable to detect when the
cow is in heat. Another breeding issue is that of bull use. Because there are
limited number of bulls to service the cows, sometimes no bull is available when
the cow comes into heat. Under revised arrangements, cattle breeding is done on
a commercial basis and farmers are required to use night corrals - cows must be
kept with the bull at night in an enclosure. |
Income distribution will be changed in a number of ways with a change from a traditional production system to a large-scale intensive system. Land values close by the large-scale production facility might fall because of the negative externalities associated with the facility. These negative externalities include odour pollution and manure runoff. Similarly, land values may be harmed by related infrastructure such as roads. This is because roads might disrupt drainage and/or irrigation systems, reducing the production capacity of neighbouring agricultural land. The income position of the small farmers and those associated with the production, processing and marketing of livestock output from small farms is likely to be harmed. On the other hand, there may be benefits if the infrastructure results in improved all weather access for the small producers. While job opportunities may arise in processing, these opportunities will probably not be available to all, such as older workers or those caring for children.
Livestock can be used in an emergency situation to improve the economic situation of smallholders. An example of this was the use of poultry flocks of 50 to 60 birds to provide employment for Indonesian who had to return to their villages after the financial crisis of 1997 hit Jakarta and other cities. These birds helped provide eggs and poultry meat after the modern intensive industry collapsed (D. Steane, pers. comm. 5 June 2001). In Papua New Guinea, a scheme operates in which day old chicks are sold to villagers in lots of from 50 to 1 000 chicks. The chicks are grown by the villagers and sold in the local market in an effort to improve their income situation. By the latter part of 2001, the income benefit to villagers from this scheme has not been established (Ramsay 2001).
The importance of livestock manure
Animal manure is valuable as a fertilizer, and improves the soil over and above the simple chemical nutrients of N, P and K. As an input into the crop cultivation systems, manure is an important link between crop and animal production throughout the developing world (Rodriguez et al. 1998). De Haan et al. (1996) estimate that livestock produce about US$750 million worth of fertilizer for tropical irrigated agriculture in Asia, and help save about US$650 million worth of fossil fuel in the region. Not all farmland will necessary benefit from manure application. Gavian and Fafchamps (1996), using field level data from a sample of 60 households found that tenure insecurity encourages farmers to divert scarce manure resources to more secure fields where ever they can. They found that replacing traditional systems with western style tenure through land titling and other measures is not necessary: what mattered was whether the field was held permanently or temporarily.
Manure can be a source of income for small farmers. An example of this is in Viet Nam where farmers operating small farms sell manure to plantations for fertilizer and to improve soil quality. The income opportunity this creates for farmers could result in them substituting one species for another. Tulachan and Neupan (1999) point out that buffaloes give 75 percent more manure than cows. Use of buffaloes rather than cows would reduce the production of milk, affecting nutrition. However, government subsidies on chemical fertilizers disadvantage those among the rural poor who earn income from the collection and sale of manure. Manure and chemical fertilizer are substitutes, with the result that a subsidy on chemicals will reduce the demand for manure as a fertilizer. This will be reflected in a lower price for manure. To the extent that subsidies on fuel or transport reduce the cost to the farmer of chemical fertilizers, these subsidies will also result in lower manure prices.
Manure, produced through the recycling of residue material by ruminants, is a significant source of fuel in many developing countries. It is estimated that 8 percent to 12 percent of the world's population depend on manure for heating and cooking (Rodriguez et al. 1998)[17]. The use of manure from ruminants relieves households from spending time in collecting fuelwood, allowing more time to be spent in farming or other activities. The collection of fuelwood has had a serious impact on forest lands, resulting in their degradation. Prasad et al. (2001) and Tulachan and Neupan (1999) discuss this issue in relation to the Himalayan ecosystem.
Religion
The importance of religion as an influence on the consumption of livestock products in the countries of the Asia-Pacific region has been raised in this chapter on a couple of occasions. There are other aspects of the livestock industries where religion can also be a factor. Religious issues might become an issue with the use and disposal of animal by-products, including manure. Mulyono (1998) discusses the waste disposal problem associated with the pigmeat industry in Indonesia's Special Province of Jakarta. Mulyono points out that initiatives tried in the past to use waste associated with pigs for fertilizer or as a source of energy were unsuccessful because of a Muslim prohibition on touching or consuming any part of the pig.
Livestock production is also influenced by religious customs in the Himalayan kingdom of Bhutan but at a different stage in the production process. Bhutan's pork industry is relatively large. Productivity in the production of pork meat could possibly be increased by large-scale facilities involving a couple of hundred breeding sows. However, this would be at odds with religious beliefs which prevent animal production taking place in facilities of this size because Bhutanese people will not kill more animals than are required for their own requirements. A strategy to get around this would be for farmers to be given responsibility for raising animals on behalf of others and this happens, with Nepalese workers being used to slaughter animals.
Other issues
Pest control
Chickens, geese and ducks help control insect pests and weeds, reducing the need for chemical weedicides and pesticides. Research from West Java and reported by Riethmuller (1999) indicated that for a 1 ha plot, allocating 0.8 ha to rice, 0.1 ha to rice-fish and 0.1 ha to ducks, net returns would double over the traditional rice-rice-fallow practice. Goats can control weeds and at the same time add to the income of smallholders involved in plantation crops such as rubber production. Similarly cattle, sheep and goats have been used in Sri Lanka, Malaysia, Indonesia and the Philippines to control weeds and vegetation under coconut trees and oil palm (Devendra 1991).
Social capital
Livestock can help build social capital in rural areas. Social capital, according to Pretty (2001), is the cohesiveness of people in their societies, and comprises trust, common rules, norms and sanctions for behaviour. Pretty argues that one of the reasons for the emergence of non-sustainable systems is that social capital has been undervalued. Social capital tends to be a public good, which increases with use. It is hard to imagine it having a market value. Boyle (2001) says that social capital is a term not normally found in economics. His view is that it refers to the wider social networks and associations that households engage in to improve their livelihood strategies. Sharing of animals for ploughing or for providing draught power for irrigation are examples of how livestock can add to social capital. Another example is the use of animals owned by landless farmers by other farmers engaged in crop production to recycle plant residues on their cropping land into manure. In-kind provision of credit to poor farmers to develop livestock production is a third example. Box 14 provides details of a scheme of this nature in Java.
Box 14 In-kind credit on Java
|
The World Bank (2001) describes a programme set up in the
mid-1980s on the Indonesian island of Java. Farmers targeted for participation
in the scheme were divided into groups of ten, with each farmer receiving two
female goats or sheep. The leader of each of the groups received training in
animal management. The leader was also given a good quality ram or buck. The
Bank explains that each recipient had to repay four lambs or kids over a period
of three years. An evaluation of the project in 1988 concluded that the project
could be used to improve group dynamics of farmer groups, as well as income,
animal performance and the level of technology used by farmer
participants. |
The Council for Agricultural Science and Technology 2001 cites research published in 1985 that estimates 30 million tractors would be needed to replace the 30 million draught animals used at that time on small farms in Asia. The Council argues that the use of animals has saved foreign exchange needed to purchase fossil fuels. The issue is complicated however since crop yields might be higher with tractors. Mengjie and Yi (nd) contend that despite increasing trends towards mechanisation, one-third of China's total agricultural output in the 1980s and 19909s was produced using draught animals, of which there were about 80 million in 1993. In 1980, they estimated that about 25.6 percent of the power source used on Chinese farms came from draught animals with 21.6 percent from humans and the balance from machines. By 1990, the relatives shares were 57.8 percent (machines), 29.7 percent (draught animals) and 12.5 percent (humans). They expected the trend towards machines to continue so that by 2000, the contribution of animals would be down to 17.7 percent. The share of human power was expected to be 12.9 percent and machines 69.4 percent. The use of animal for traction releases women in particular from drudgery and time consuming task such as water gathering.
Concluding comments
Livestock industries produce joint outputs in proportions fixed by technology, and they also produce goods that are complements in consumption. For traditional farmers, the social status associated with livestock ownership may be one of the "outputs" of livestock, and this may be no less important than the marketable outputs of livestock. Manure might be the most important "economic" product produced by livestock on many small farms.
It is apparent that generalizations about the livestock industries in developing countries are difficult to make. However, one generalization that can be made is that the economic consequences of livestock industries should not be considered in isolation from their social consequences. This chapter has argued that there is extensive anecdotal evidence to suggest that small livestock industries play many important social functions. An implication of this is that a case can be made in at least some livestock industries and in some countries/regions for public support of small-scale producers.
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