Indira Gandhi Institute for Development Studies(IGIDR), and the International Food Policy Research Institute (IFPRI) on ‘Harnessing Opportunities to Improve Agri-Food Systems’ on July 24-25 , 2014 in New Delhi. The two day conference aims to discuss the agricultural priority of the government and develop a road map to realise these priorities for improved agri food systems.

1. LIVESTOCK FOR ACCELERATED
AND INCLUSIVE GROWTH
Pratap S Birthal
National Centre for Agricultural Economics and Policy
Research, New Delhi
IGIDR-IFPRI workshop on ‘Harnessing Opportunities to
Improve Agri-Food Systems’ July 24-25, 2014

2. Background
 Target of 4% growth in agriculture
 How to accelerate agricultural growth?
 Area expansion, price increases,
technology, diversification
 Can diversification toward animal
production accelerate growth?
 Smallholders (<2ha):
 Size of land holding (0.6ha)
 Can such tiny pieces support their livelihood
and come out of poverty?
 Exit from agriculture or Diversify towards
activities that generate more income such as
horticulture and animal production?
 Will smallholders benefit from livestock-
driven growth?
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3. How does livestock contribute to
agricultural growth and poverty
reduction?
Food and
nutrition
Energy in
agriculture,
fertilizers and
domestic fuel
Regular cash
income
Insurance and
banking
function
Equity: Inter-
household and
intra-household
3

4. Organization?
The way forward to convert challenges into
opportunities?
Challenges in livestock development?
Livestock be an engine of agricultural growth and
a pathway out of poverty?
Opportunities for livestock sector to grow?
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5. Opportunities?
Changing food basket: share of animal products in
food expenditure increased from 20.3% in 1993-94 to
26.1% in 2011-12 in RURAL, and from 26% to27.5% in
URBAN segment
Income growth and urbanization
By 2020 demand for milk is expected to be 156 Million
tons, and of meat and eggs to be 13 Million tons
Share of livestock products in agricultural exports
increased from 3.7% during 1991-95 to 8.9% in 2005-10.
Buffalo meat is the main export product

6. Exports of Buffalo meatvs BasmatiRice
(US$Million)
0
1000
2000
3000
4000
5000
6000
1987-88
1988-89
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Basmati Rice
Buffalo Meat

7. India’s share in globalbovine meatexport
(QTY)
0%
5%
10%
15%
20%
25%
30%
35%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Australia Brazil EU 27 India New Zealand US

8. What turned India largest exporter?
International factors:
• Appreciation of major exporting countries vis-à-vis exporting countries making exported
meat costly.
• Reduction in producer subsidy in EU
• Mad cow disease in late 1990s in Europe, and in the early 2000s in US
• EU restriction on Brazilian imports for safety reasons
• India is close to key markets of South East Asia and Middle East ; low shipping cost.
Domestic factors
• India supply ‘HALAL’ slaughtered meat a desired requirement in Islamic countries.
• Low cost of production hence low price
• There is no practice of using hormones, antibiotics or any other chemicals for fattening.
• Indian buffalo meat is lean and blends well with other value-added products.
• Indian buffalo meat is low in fat and cholesterol and is free from radiation.
• Disease free (Rinderpest, mad cow disease, program on FMD).
Traditional markets: Malaysia, Philippines, UAE, Jordan, Oman, Kuwait, and Iran.
New markets: Vietnam, Saudi Arabia, Syria, Thailand, Angola, Algeria, Congo and Egypt.
Major destinations now are: Vietnam, Malaysia, Thailand and Egypt..

9. Indianbuffalomeat pricevis-a-visworldbeef
price(US$/t)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
India
World

10. Livestock Generates Agricultural Growth
(% annual growth)
Crops Livestock Fisheries Forestry Agriculture
% share in agricultural GDP
TE1982-83 72.1 18.8 2.8 6.3 100
TE1992-93 69.2 22.4 3.8 4.6 100
TE2002-03 67.2 24.4 4.5 4.0 100
TE2010-11 65.1 26.5 4.7 3.8 100
% annual growth
1980-81 to 1989-90 2.71 5.3 6.6 -0.05 3.2
1990-91 to 1999-00 2.76 3.9 5.1 1.27 3.0
2000-01 to 2010-11 2.65 3.9 3.4 1.90 3.1
1980-81 to 2010-11 2.76 4.3 5.1 1.10 3.1
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11. Average Value of Output of Livestock vis-à-
vis Foodgrains , (Rs billion at 2004-05 prices)
Livestock Milk Foodgrains Rice Wheat
1980s 870 563 1201 527 311
1990s 1300 883 1539 704 446
2000s 1864 1278 1685 771 510
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12. Livestock Cushions Agricultural Growth:
Fluctuation in the of Output of Livestock and Crops
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13. Inclusiveness:
% share of marginal farm households
1981-82 1991-92 2002-03
Rural households 41.2 48.3 48.4
Land 11.7 15.5 24.1
Livestock
Cattle 30.0 47.3 53.4
Buffaloes 27.9 35.8 50.3
Small ruminants 38.6 46.2 62.4
Pigs 56.0 49.9 76.8
Poultry 48.8 54.9 63.8
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14. Inclusiveness: poverty regressions
Dependent variable :
Poor=1 otherwise =0
Dependent variable:
Log absolute poverty gap
Coeff. t-stat Marginal
effect
Coeff. t-stat
Log per capita income -1.272 -45.660 -0.265 -0.319 -15.520
Proportion of income
from crops
-1.214 -22.480 -0.253 -0.333 -9.400
Proportion of income
from livestock
-1.726 -20.210 -0.360 -0.448 -6.990
Controls: Education and
social group
No. of observations 45094 14826
Chi2 3900.12 415.33
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15. Livestock and environment
• Negative externalities
– Over-grazing, deforestation, water pollution
– Methane emission from livestock: 12 million t
• Positive externalities
– Recycling of agricultural byproducts and
residues save 40 million ha
– Substitution of fuel wood by dung cake saves
1.6 million ha
– Use of dung as manure saves 1.2 million t of
NPK
– Tractors required to substitute 57million
draught animals 5.5 million ; saving of diesel :
13.1 million t
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16. Concerns?
 Deceleration in yield growth of all types of dairy
animals: Number-driven growth cannot be
sustainable in the long run
 There is an yield gap from 40-50%
 Breeding: AI 20%, success rate is poor
 Feed and fodder scarcity: 11% in dry fodder, 35%
in green fodder and 28% in concentrate feed
 Decline in common grazing lands in quantity as
well as quality
 Poor livestock delivery systems despite having
more than 50 thousand veterinarians excluding
para-vets and 55 thousand institutions

17. POLICIES FOR
SUSTAINABLEGROWTH

18. Public spending on livestock
TE1992-93 TE2000-01 TE2008-09
Total spending (Rs million,2004-05 prices) 37396 41561 47261
% of total agricultural spending 13.6 9.9 4.6
Public spending as % of livestock VOP 3.6 2.8 2.3
Composition of public spending (%)
Dairy development 41.5 38.6 25.0
Veterinary services and animal health 23.7 24.1 29.1
Cattle and buffalo development 14.0 11.7 10.5
Sheep and wool development 2.7 2.4 2.0
Piggery development 1.8 0.5 0.4
Poultry development 3.1 2.4 2.4
Fodder development 0.9 1.0 1.0
Direction and administration 4.2 8.7 19.1
Research, education and extension 2.2 3.0 3.0
Others 5.8 7.6 7.5
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19. Credit and insurance
• Share of livestock in agricultural credit
has hardly ever exceeded 5%
• Livestock credit is treated as term credit
• Only about 30 million bovine heads are
insured, of which 25% are insured under
IRDP programs
• Bias in insurance against low-producing
dairy animals

20. Marketing: Dairy cooperatives
1980-81 1990-91 2010-11
No. of societies 13284 63415 144246
Members, million
number
1.75 7.48 14.46
Milk procured,
million tonnes
0.94 3.54 9.56
Milk procured, % 2.96 6.57 7.84
20
NDDB

21. Unbalanced growth of cooperatives
% of
output
procured
States Share in
total milk
procured
Share in
milk
produced
Private
plants
10-30% Gujarat (31%)
Maharashtra (15%)
Karnataka (25%)
TN (13%), Kerala
(12%)
66% 27% Maharshtr
a (23%)
Karnataka
(5%)
<7% A P (5%),
Rajasthan(6.2%),
Bihar (3.5%), M P
(2.3%), Orissa,
(4.5%) W B (3.1%)
19% 34% Weak
Uttar Pradesh (2%),
Punjab (3.2%),
Haryana (2.5%)
10% 34% Strong
(55%)
NDDB
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22. National Dairy Plan
 Genetic enhancement through AI:
 Increase number of high genetic merit bulls and import of
exotic purebred bulls or equivalent embryos.
 Increasing the annual production of high quality semen to 100
million doses to improve AI coverage from 20 per cent to about
35 per cent.
 Doorstep AI delivery services
 Feed and nutrition:
 Awareness about the balanced ration
 Improve supply of certified / truthfully labelled fodder seeds.
 Conservation of green fodder through silage for use in fodder deficit areas.
Marketing
 Strengthen existing dairy cooperatives
 Promoting Producer Companies.
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23. ThankYou