The benefits of helping a livestock ride out of poverty and into world trade

While much political debate and posturing will no doubt be heard in the lead up to the upcoming WTO negotiations, Australian politicians, farmers and the general public would do well to take account of another major development in agricultural trade which also offers much for Australia and its near neighbours.

Demand for meat and milk is expected to double between 2000 and 2020 in Asia. Coined the "Livestock Revolution", much of the demand is centred in developing countries and is fuelled by population growth, increasing urbanisation and growing prosperity.

For people in developing countries of the region this means increased access to high-quality animal products and micronutrients, but also offers the opportunity for increased incomes, nutrition and health.

But the poor may not benefit and developed countries like Australia may not profit from a greater slice of world trade unless specific actions and polices are implemented outside any developments related to Cancun in September.

The benefits of international trade in stimulating economic growth are widely acknowledged, particularly in south-east Asia and China. However, agriculture is one trade sector, worldwide, in which there has been considerable protection of domestic markets. WTO negotiations to liberalise agricultural trade seek to establish risk-based rules to regulate trade flows and improve access to markets. These rules need to reflect the needs of all producers and consumers, the poor as well as the rich. In addition, economic efficiency arguments need to be linked to broader welfare considerations, such as pollution, antibiotic and pesticide resistance, and increased income disparities.

Outside of the much-discussed WTO round, there remains much hope for rural development. In Asia, poverty remains a fact of life for more than 650 million people, despite spectacular economic growth in several countries. The poor are largely found in rural areas and many keep livestock - in south-east Asia there are 60 million poor farmers who keep livestock. The equivalent figure for South Asia is 200 million.

Livestock contribute to food security through their multiple roles in Asian farming systems and eating even a small amount of animal products corrects micronutrient deficiencies in the cereal-based diets of the poor. Livestock are an important and regular source of income and often the only insurance against crop failure. The poor clearly value livestock. In Bangladesh, more than 50 per cent of the requests for loans to the Grameen Bank, which assists the "poorest of the poor", are for the purchase of livestock, mainly for milk production and fattening for sale. Manure provides fertilizer for crop production while livestock convert crop-residues and other feeds not directly usable by humans into high-value and nutritious meat and milk. In these and other ways, livestock make vital contributions to human development and to agriculture, an industry that provides employment for over half the workforce in countries like Indonesia and Thailand.

The development of industrialised systems to produce pigs and chickens is a feature of the "Livestock Revolution" in Asia. In Thailand, for example, 80 per cent of the pigs are produced in industrialised systems. Urbanisation, technologies, complex market-chains, enhanced transportation systems, and output-maximising policies are driving these changes. To better serve society, policies need to reflect the true economic, social and environmental costs of livestock production systems, from small to large scale.

How can the poor capture the opportunities provided by the "Livestock Revolution"? A range of largely public interventions outside contentious trade negotiations, can improve their market access and incomes. These include pro-poor policies, technologies and institutions. As examples, pro-poor policies include targeted investment in rural infrastructure and the removal of subsidies that favour large versus small producers. Vaccines have been an effective technology for the poor. A thermostable vaccine against rinderpest has reduced risk for smallholders as well as contributing to the near-eradication of rinderpest worldwide. Dairy cooperatives in India have helped improve the incomes and livelihoods of more than 10 million households. However, some argue that their pro-farmer milk policies have been at the expense of poor consumers, showing that interventions need to be assessed and re-assessed for their net pro-poor benefits.

Access to markets for the poor is a key demand of developing countries. The challenge is to balance the protection of food safety with poverty reduction benefits. Such tradeoffs are nothing new, as acceptable standards for safe foods have evolved to reflect changes in food production and distribution systems. While access to international markets will require standard safe food rules, exceptions appropriate for individual domestic markets should be considered. For example, where consumers boil milk, the local sale of unpasteurised milk allows small producers and market agents to gain a living with minimal health risks to consumers.

And what are the implications for Australia? The "Livestock Revolution" offers a great opportunity for Australia, since most of its benefits will occur in Asia. With strategic livestock interventions, reduced poverty and enhanced sustainable development should be achieved in many Asian countries. Richer neighbours will demand more livestock and other products, make better trade partners and present less risk of exporting their disease, environmental and social problems. Recent evidence shows that it is increasingly difficult to isolate a country, either from disease threats such as SARS or FMD or socio-political conflicts. Thus, appropriate livestock development in Asian countries can be of great benefit to Australia and Australia has much to offer in this process.

Dr Seré is keynote speaker at "The Livestock Revolution: A Pathway from Poverty?" at Parliament House, Canberra on 13 August with other speakers including The Hon. Alexander Downer, Minister for Foreign Affairs; The Rt Hon Mike Moore, former Director, World Trade Organisation; and Dr Chris Delgado, International Food Policy Research Institute, Washington.