Salesforce Miami User Group Event - 1st Quarter 2024
Creating a livestock sector with global competitor advantages in East Africa
1. Creating a livestock sector with global
competitor advantages in East Africa
Amos Omore
International Livestock Research Institute, Dar es Salaam, Tanzania
Agribusiness East Africa Conference, 28-29 January, 2014
Serena Hotel, Dar es Salaam, Tanzania
2. Key messages
• Trends show global and Africa’s livestock
industry is growing rapidly
• Significant opportunities exist for East
Africa’s livestock sector
• Research solutions are needed to
transform the livestock sector
• More investments are required to take
successes to scale
• Acting now, together and coherently,
we can create a sustainable livestock
sector with global competitor advantages
in East Africa
3. The global & EA’s livestock sector is growing rapidly
4. Livestock dominate list of highest value commodities:
4 of top 6 globally and 3 of top 6 in Africa
Highest value
commodities
globally:
Highest value
commodities in
Africa:
Source: FAOSTAT, 2013
5. Percentage growth in demand
for livestock products: 2000−2030
5
Based on anticipated change in absolute tonnes of product comparing 2000 and 2030
FAO, 2012
6. Economic opportunities in the livestock sector
The 4 billion people who live
on less than US$10 a day
(primarily in developing
countries) represent a food
market of about $2.9 trillion
per year. (Hammond et al. 2007)
• Consumption of meat and
milk in developing countries
is forecast to increase faster
than that for any crop
product. (IAASTD 2007)
• 17 billion domestic animals
• Asset value $1.4 trillion
• Employs 1.3 billion people
Rosegrant et al. 2009
7. Drivers of livestock growth: more, richer
people and urbanization
Population growth
Over 9 billion people
to feed globally by 2050
Income growth
5 of the 20 fastest-growing
economies in the world
are in eastern Africa.
Urbanization
Africa’s current population of 1.1 billion
is expected to double,
to 2.3 billion, by 2050,
and over half will live in urban areas.
9. Per cent growth in consumption of livestock
products between 1995 and 2005
FAO, 2012
10. Extraordinarily high increases in demand
for animal-source foods in Africa expected
• By 2050, the meat and milk markets are projected
to increase 145 and 155%, respectively, over 2005/07 levels.
• Over this period, Africa’s increase in volume of meat consumed
will be on par with that of the developed world and Latin America.
• Gains in the size of Africa’s milk markets will be stronger
than in any other region except South Asia.
• Annual growth rates in both meat and milk consumption
are projected to be higher in Africa than in any other regions,
excepting meat in South Asia.
• In both volume and value, beef, milk and poultry will provide
business opportunities for Africa’s livestock producers, sellers and
investors.
11. Africa is a net importer of animal-source foods
Africa total meat trade
• Production will not
keep pace with
consumption growth
2000
1800
1600
Quantity (Tonnes)
1400
1200
Imports
1000
Exports
800
• Africa expected to
continue being a net
importer of animalsourced foods
• Global trade share:
3%
600
400
200
0
1961
1970
1980
1990
2000
2010
• Intra-regional trade
(2009): 10%
Calculated from FAO data (FAOSTAT, 2013)
12. Future livestock sector
markets and opportunities
• Developing, not developed, countries (Africa significant)
• Starting point is the smallholder producers
• Transforming the sector to meet demand
in environmentally sustainable and healthy ways:
– Use and take to scale research-based successes in
> technology (feeds, breeds, health) to push productivity
> markets to pull productivity
– New business models
13. East Africa is well placed to exploit these opportunities
ILRI Spearheading a
New Way Forward
14. Regional GDP Gains to 2015 from Growth in
Selected Commodity Sub-Sectors (US$ million)
Source: ASARECA/IFPRI Report #150
15. More opportunities in milk than in beef and
other meats
Milk
Oilseeds
Cassava
Sorghum_Millet
Vegetable_Fruits
Beef
Maize
Bananas
Coffee_Tea
Potatoes_Sweetpotatoes
Rice
Wheat_Barley
Beans_Peas
Poultry
Sugar
0
100
200
300
400
500
600
The region dominates production Africa’s milk (40%), beef (23%) and mutton
(26%) in 2007
Source: ASARECA/IFPRI Report #150
16. But there are still huge production and productivity
gaps: No EA country appears in the big league!
Volume of milk produced in
2011(>10 million tonnes)
Average production/cow
EU-27
Israel
India
Denmark
Netherelands
USA
Spain
China
Belgium
Brazil
EU
Italy
Russia
South Africa
New Zealand
Russia
Turkey
China
Pakistan
Egypt
India
Argentina
Nigeria
Ukrain
-
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,00010,000
11,000
12,000
0 10 20 30 40 50 60 70 80 90 100110120130140150160
Surce: IDF/FIL dairy Situation report, 2012
17. More opportunities in local & regional markets
Brazil, Argentina and India much more
competitive in the meat trade: They land
beef in importing countries at costs < 50%
than the most competitive African
countries (Rich, 2009)
High perishability, lack of cold chains and
poor infrastructure make livestock
products uncompetitive in the region
High feed costs and seasonality must be
overcome to meet high quality standards
Market share (%): Informal raw milk
markets
Uganda
Tanzania
Kenya
80%
Exploit local demand
85%
90%
95%
100%
18. Smallholders who dominate the livestock sector
are often competitive with bigger producers
• At least 80% of East Africa’s current
livestock production comes from
the smallholder sector.
• In many cases, East Africa’s smallholder
producers can compete well with
larger livestock producers.
• Smallholders are expected to continue
to dominate East Africa’s livestock
production for generations to come.
• The challenge is how to continue to meet
the growing demand for livestock from
the smallholder sector, and do so
sustainably.
19. Aggregate welfare effects of removing trade
barriers
• Non-tariff barriers and transport costs in EAC hinder
effective supply response to local & regional demand
• Removal of tariffs within EAC doubled dairy trade to 11%
in a decade
Source: Gelan & Omore (2013)
21. East African research-based livestock successes:
FEEDS
• 70% of production cost – FEED
• 70% of feed – CROP RESIDUES
• Potential huge demand for grain for
MONOGASTRICS
• Opportunities:
– Improved crop residue
quantity and quality
– Improved use of crop residues
with other feed resources
– Use of sorghum and other alternates
to maize for monogastrics
22. East African research-based livestock successes:
BREEDS
• Imported ‘improved’genotypes
often unsuccessful in many areas
• African breeds have huge potential:
− Appropriate breeding and selection
− Introduction of cross-breds
Example
• ‘Hairless’ worm-resistant red Maasai
sheep are now, in the face of climate
change, being restocked by
Maasai communities.
23. East African research-based livestock successes:
HEALTH
• Animal health becomes more
important with improved genotypes
• Research solutions for animal
diseases:
− Vaccines (e.g. East Coast fever)
− Diagnostics
• In Uganda, where pork consumption
is skyrocketing, projects are
enhancing the pig value chain and
helping the country’s ensure the
safety of its pork products.
25. Both investments and reforms
needed in Africa’s livestock sector
• Live up to CAADP targets to employ agriculture-led growth to achieve MDG1
of halving poverty and hunger
o Pursue 6% average annual sector growth at national level
o Allocate 10% of national budgets to the agriculture sector
• Investments as well as policy and institutional reforms
that target markets are needed.
• These can ensure that the business opportunities
generated by the growing demand for animal-sourced foods
translate into widespread benefits for the population.
• Research, development, investment, businesses and farmers themselves
need to be better aligned and connected.
• To meet the growing demand, we’re going to have to do things differently.
26. Examples of private-public synergies
Joint public-private testing of innovations:
• Innovative franchise models are providing smallholders
with access to agro-vets (‘Sidai’ in Kenya)
• New low-cost, pen-side diagnostic tools
are providing diagnostics for smallholder settings
• New mobile phone systems are helping farmers monitor
the health and reproduction of their animals (‘iCow’ in Kenya)
• Index based livestock insurance is reducing risk for pastoralists
using banking, insurance and IT from private sector innovation
• ”East Africa Dairy Development (EADD) project is connecting
farmers to service providers and new business opportunities
through a hub model
• R&D partnerships under “Maziwa Zaidi” to adapt ‘hub model’ for
marginalized groups in Tanzania
27. Acting now, together and coherently,
we can create a competitive and sustainable
livestock sector in East Africa
28. Africa’s livestock agenda:
A right now opportunity window
• Partnerships − including R&D, investment,
private and public sectors − are essential.
• Start with the smallholder producer.
• Transform the sector to meet
demand in environmentally
sustainable and healthy ways.
• Use and take to scale research-based
successes in:
− Technology (feeds, breeds, health)
− Markets
− New business models
If we don’t act soon, importers will.
29. An example of acting together:
Tanzania Dairy Development Forum
30. Key messages
• Trends show global and Africa’s livestock
industry is growing rapidly
• Significant opportunities exist for East
Africa’s livestock sector
• Research solutions are needed to
transform the livestock sector
• More investments are required to take
successes to scale
• Acting now, together and coherently,
we can create a sustainable livestock sector
with global competitor advantages in East
Africa