Livestock contribute about 40% of agricultural GDP and provide livelihoods and incomes for at least 1.3 billion people worldwide. Globally, livestock is an important resource to society providing a wide range of benefits including food, livelihood, nutrients, work, insurance, traction, and clothing.
In many high income countries (HIC) across the world, the surging demand for livestock products is largely met by large-scale livestock production and associated food chains. Nonetheless, hundreds of millions of small-scale producers and pastoralists depend on livestock for their livelihoods. Beyond food production, farm animals play other important economic, cultural and social roles and provide multiple functions and services. They are an essential part of agroecosystems.
Intensive production of livestock is booming globally, but small producers in low to medium income countries (LMICs) are failing to participate fully in sector growth. Of the 770 million people surviving on less than USD 1.90 per day, about half depend directly on livestock for their livelihoods.
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Livestock production is a distinct economic activity for both small-scale farmers and large-scale livestock producers. Regardless of the scale, livestock producers are connected to their market and selling product is the central development point beyond immediate personal consumption.
Small-scale livestock producers are facing many challenges, some differing from large-scale producers. At the smallest level livestock and their products may be entirely utilised by the family or immediate local group for food with an allied value as a mobile asset that can be sold to meet urgent needs such as health care or education. Such trading as occurs often falls well short of commercial marketing as understood in high-income countries (HIC) with the producer having little knowledge regarding actual value and potentially exploited by “middlemen” reselling to a final processor. Similar lack of access to production knowledge coupled with environmental constraints results in a struggle for productivity and competitiveness.
Globally, there are two main forms of commercialisation: live animals and various livestock products (mostly meat and milk). In 2016, live animals represented around 10% of the value of animal product exports at the global level. The livestock marketing chain can be long as for live export or where regional breeding, growing and finishing activities are 1,000 or greater km apart. Similarly, the final livestock transfer from property to abattoir may represent a short walk or extensive journey by rail, road or ship and combinations with many or only a few parties involved.
The distribution chain from slaughter is also complex and highly variable with that of co-products including blood, hides and pelts, meat and bone meals and pharmaceutical ingredients vastly different to meat. Carcasses may also be processed to cuts and cuts further value added, portioned and packed in multiple configurations either at the point of slaughter or externally with exported product typically involving further fabrication prior to sale at the final destination. Consequently, the animal products supply chain involves a huge variety of employment-creating services and inputs and potential transaction costs including environmental impact. The location, and related economic and employment activity in initial production, transport, primary processing, further value adding, final product distribution and retailing ranges from entirely local to international. The location of each step and process will have significant impact on the overall economic impact of livestock production at a local, regional and national level.
The importance of animal agriculture is by nature vastly different by region; critically linked to economic survival where the animal is raised and processed and to human dietary balance and sufficiency where finally consumed. Despite massive differences in scale and base economic security many issues are also common across high-income countries (HICs) and low to medium income countries (LMICs) including direct impact on individual livelihoods and on the need and desire to protect and improve individual production resources.
In many LMICs, raising livestock is central to resilience and adequate dietary intake directly reflected in human health, development and survival. Livestock play a crucial role in delivering economic growth, sustainability and social improvement. This is true for rural communities across the globe but amplified in LMICs where livestock are crucial to survival. For example, in Africa, livestock raising involves the highest percentage of the working population (about 65%). Agricultural value-chains contribute about 30% of the GDP in most African countries, generating incomes, economic growth and job creation.
In Ethiopia, a very low-income country, agricultural growth is a dominant variable both in income growth and poverty reduction—accounting for 73% of employment growth in the fast agricultural growth case. In Nigeria, income from livestock is mostly attributed to poultry and cattle. The gross revenue from cattle activities is mainly due to milk production in the commercial and agropastoral production. Sale of live animals in the pastoral system are likely to be as a result of low milk yields and short milking periods.
