Role of Animal Husbandry in Enhancing Agricultural Growth ... Pratap Singh Birthal.pdf · Role of Animal Husbandry in Enhancing Agricultural Growth and Poverty ... ICAR-National Institute

Role of Animal Husbandry in Enhancing

Agricultural Growth and Poverty Reduction

Pratap S Birthal ICAR National Professor

ICAR-National Institute of Agricultural Economics and Policy Research

New Delhi 110012

Agriculture in India since 1991

Economic growth = 7%

Agricultural growth= 3.2%

Self- sufficient in food production

Reduction in rural poverty

Diminishing pro-poor effect?

Declining landholding size

Tardy shift of labour from agriculture to non-agricultural sectors

Deceleration in technological gains

Degradation of land and water resources

Increasing frequency of extreme climatic events

Agrarian distress

Agriculture alone income is not sufficient to alleviate distress

Economic and Environmental

Contribution

Functions of livestock

Food & nutrition

Energy: draught power, fertilizers and domestic fuel

Regular cash income

Wealth, banking and insurance

Equity: poverty

Gender

4

Animals

Value of outputs of livestock (at 2004-05 prices)

20.9

30.1

0

5

10

15

20

25

30

35

0

500

1000

1500

2000

2500

3000Rs billion %

Dairy vis--vis cereals (Rs. billion at 2004-05 prices)

0

200

400

600

800

1000

1200

1400

1600

1800

20001981 - 1

982

1982 - 1

983

1983 - 1

984

1984 - 1

985

1985 - 1

986

1986 - 1

987

1987 - 1

988

1988 - 1

989

1989 - 1

990

1990 - 1

991

1991 - 1

992

1992 - 1

993

1993 - 1

994

1994 - 1

995

1995 - 1

996

1996 - 1

997

1997 - 1

998

1998 - 1

999

1999 - 2

000

2000 - 2

001

2001 - 2

002

2002 - 2

003

2003 - 2

004

2004 - 2

005

2005 - 2

006

2006 - 2

007

2007 - 2

008

2008 - 2

009

2009 - 2

010

2010 - 2

011

2011 - 2

012

2012 - 2

013

Milk Cereals

Livestock a Cushion against climatic shocks: %Fluctuation in the of Output of Livestock and Crops

-12

-10

-8

-6

-4

-2

0

2

4

6

19

81

- 1

98

2

19

83

- 1

98

4

19

85

- 1

98

6

19

87

- 1

98

8

19

89

- 1

99

0

19

91

- 1

99

2

19

93

- 1

99

4

19

95

- 1

99

6

19

97

- 1

99

8

19

99

- 2

00

0

20

01

- 2

00

2

20

03

- 2

00

4

20

05

- 2

00

6

20

07

- 2

00

8

20

09

- 2

01

0

20

11

- 2

01

2

Agriculture Livestock

Regional distribution of livestock income (% of AgGDP)

Livestock and Agricultural Growth Crops Livestock Fisheries Forestry All

% 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

TE2012-13 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 2012-13 2.76 4.3 5.1 1.10 3.1 9

Distribution of land and livestock

(%), 2012-13

Landless Small Medium Large

Households 7.4 85.4 6.9 0.2

Land 0.0 53.3 40.9 5.8

Cattle 3.4 82.7 12.9 1.0

Buffalo 12.4 70.7 15.9 1.0 Small ruminants 4.5 81.1 13.8 0.6

Pig 0.0 91.8 8.1 0.1

Poultry 7.5 84.2 7.9 0.4

Livestock growth and rural poverty

11

Poverty regressions

Dependent variable :

Poor=1 otherwise =0

Dependent :

Ln poverty gap

Coeff. t-stat Marginal

effect

Coeff. t-stat

Log per capita income -1.272 -45.66 -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

No. of observations 45094 14826 12

Contribution to Environment

Methane emission

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 55million draught animals 5.2 million ; saving of diesel : 13.0 million t

13

Doubling farmers income

through animal farming

Is it possible to double farmers income?

Between 2002-03 and 2012-13

Per capita income of farmers increased by 34%,

At this pace it may take 14 years

By farm size:

Only large farmers could near-double per capita incomes

Farmers (< one hectare) could increase by 10-38%.

By state:

decline in farmers per capita income in Bihar and WB;

little or no change in Assam and Jharkhand

an increase equivalent to all-India average in Uttar Pradesh,

Gujarat and Kerala;

increase of 47-93% in other states, Odisha it more than doubled

Cumulative distribution of per capita income Average per capita income: Rs14470

Distribution of farmers, and per capita income

% of total households Per capita income

70%

17% 9% 4%

Marginal Small Medium Large

0

5000

10000

15000

20000

25000

30000

35000

Mar

gin

al

Sm

all

Med

ium

Lar

ge

11346

16399

22142

34941

Distribution by land and income class (%)

Composition of income classes (%)

Composition of land classes (%)

77 63

49 35

70

16 25

28

27

20

7 12 22

39

11

0

20

40

60

80

100

Low-income Middle High

75 56

42

16

23

20

7 15

21

2 7 17

0

10

20

30

40

50

60

70

80

90

100

Low Middle High

Marginal Small Medium Large

Low-

income

Middle-

income

High-

income

All

Marginal 6067 20639 50478 11346

Small 7191 21026 55318 16399

Medium 7717 21436 54842 22142

Large 7366 22574 68284 34941

All 6395 20972 55450 14470

Per capita income: land-income class

Farmers Income Sources (%)

By land class By income class

47

23 16

9

33

30

57 69 80 47

14 12 11 8

12

9 8 4 4 8

0102030405060708090

100M

arg

ina

l

Sm

all

Me

diu

m

Larg

e

All

Wages & salaries Cultivation of crops

Farming of animals Nonfarm business

38 33 28 33

45 45 50 47

11 13 13 12

6 8 9 8

0

10

20

30

40

50

60

70

80

90

100

Low

Mid

dle

Hig

h

All

Wages & salaries Cultivation of crops

Farming of animals Nonfarm business

Low-

income Middle-income

High-income

All

Landholding size (ha) 0.41 0.44 0.45 0.42

Gross returns (Rs/ha) 46230 70047 105149 54686 Cost of cultivation (Rs/ha)

20575 24364 25729 21602

Net returns (Rs/ha) 25655 45683 79420 33084 % cropped area irrigated

65 61 57 64

Cropping intensity (%) 144 148 162 145 % area under high-value crops

6.3 8.9 14.6 7.4

LIMF: Productivity and crop choices

Low-

income Middle-income

High-income

All

% engaged in livestock production

47.1 58.3 59.3 50.1

% engaged in non-farm business

7.8 16.5 20.7 10.3

% receiving wages & salaries

52.1 69.4 73.6 56.8

% with job card 45.7 48.4 38.0 45.6

LIMF: Access to income sources

LIMF: Access to credit and information

45

39

55

45

51 51 47

41

0

10

20

30

40

50

60

% having access to credit % having access to information

Low-income Middle-income High-income All

Opportunities

Changes in consumption pattern (% of food expenditure)

Rural Urban 1993-94 2004-05 2011-12 1993-94 2004-05 2011-12

Foodgrains 44.8 38.7 31.7 31.5 28.9 24.9

Dairy

products 15.0 15.5 18.7 17.9 18.6 20.3 Egg, fish,

meat 5.2 6.0 7.4 6.2 6.4 7.3 Fruits &

vegetables 12.2 14.5 13.8 15.0 15.8 14.8

Edible oils 7.0 8.4 7.8 8.0 8.2 7.0

Others 15.8 16.9 20.6 21.4 22.1 25.7

Projected demand (million tons)

Milk

0

50

100

150

200

2020 2025 2030

143 162

185

Meat and eggs

0

2

4

6

8

10

12

14

16

2020 2025 2030

11

.2 12

.9 14

.7

Exports (US$ million/annum)

1996-2000 2001-2005 2012-13 Agricultural products

5265 6668 27477

Livestock products

243 480 2907

% of agri products

4.6 7.2 9.9

Bovine meat 180 339 2457

% of livestock products

74.1 70.6 84.0

Dairy products 22 94 116

27

Export of buffalo meat

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

Buffalo meat: Price competitiveness (US$/t)

India trade in dairy products

(000 t milk equivalent)

-800

-600

-400

-200

0

200

400

600

8001

96

1

19

64

19

67

19

70

19

73

19

76

19

79

19

82

19

85

19

88

19

91

19

94

19

97

20

00

20

03

20

06

20

09

20

12

Trade balance Import Export

Dairy: low-cost and higher growth

% share in exports 2010-12

Cost of production (US$/ton) 2010-12

Production growth (% annum 2001-13)

India 0.2 311 (408) 4.5 Australia 3 426 -1.4 New Zealand 13 470 2.9 US 8 427 1.7 EU 60 442 0.02

Challenges?

Number-driven growth in dairy

Crossbred

cows

Local cows Buffaloes

Prod Yield Prod Yield Prod Yield

1992/93-

2000/01

7.1 1.6 1.3 1.7 3.4 2.9

2001/02-

2012/13

7.7 0.6 3.3 1.7 5.4 2.8

Yield gap, feed and fodder

There is an yield gap from 40-50% in all dairy species

Breeding: AI 20%, success rate is poor

Crossbreds? Life-cycle productivity; inappropriate infrastructure

Feed and fodder scarcity: 11% in dry fodder, 35% in green fodder, 28% in concentrates

Decline in common grazing lands in quantity as well as quality

Investment in livestock sector (Rs million at 2004-05 prices)

0.0

5.0

10.0

15.0

20.0

25.0

0

10000

20000

30000

40000

50000

60000

70000

80000

19

90

-91

19

91

-92

19

92

-93

19

93

-94

19

94

-95

19

95

-96

19

96

-97

19

97

-98

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

Total % of agri

Composition of investment (%)

Dairy

development,

25.0

Veterinary

services and

animal health,

29.1

Cattle and

buffalo

development,

10.5

Sheep

&wool , 2.0

Piggery

0.4

Poultry ,

2.4

Fodder,

1.0

Direction and

administration,

19.1

Research,

education and

extension , 3.0

Others, 7.5

Veterinary infrastructure and manpower

Year No. of

veterinary

institutions

No. of

veterinarians

Cattle

equivalent

units per

veterinary

institution

Cattle

equivalent

units per

veterinarian

1982 33,323 18,000 8,394 15,540

1992 40,586 33,600 7,632 9,219

1997 50,846 37,200 6,129 8,377

2003 51,973 38,100 5,926 8,084

2007 52,757 40,421 6,310 8,236

2014 60896 70,767 5466 4703

37

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

Only 5% farmers have access to livestock related information

a. Higher income: 50-100%

Reduction in marketing and transaction cost (60-90%)

Reduction in production cost (lower input prices)

Higher yield (5-10%)

Higher output price (5-10%)

b. Access to credit (broiler)

c. Reduction in risk price and production risk (broiler)

d. Reduced uncertainty in input supply &quality

e. Access to infrastructure and improved technology

f. Scaling up

Value chains benefit farmers, but

under-developed

Dairy cooperatives

1980-81 1990-91 2014-15

No. of societies 13284 63415 165835

Members, million number

1.75 7.48 15.40

Milk procured, million tonnes

0.94 3.54 13.85

Milk procured, % 2.96 6.57 9.45

40

NDDB

Emerging private sector

Processing capacity (lakhL/day)

% share

Coop Pvt Govt Total

1996 242 244 73 559

2002 284 324 122 730

2007 373 494 102 970

2012 433 733 40 1206

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1996 2002 2007 2012

43.3 38.9 38.5 35.9

43.7 44.4 51.0

60.8

13.0 16.7 10.5 3.4

Coopertaive Private Government

Regional disparities in dairy processing

Milk production

(%)

Total

Processing

capacity (%) Coop-PC (%) Pvt_PC (%)

AP 9.6 7.0 5.2 8.6

Bihar 5.2 0.8 1.6 0.4

Gujarat 7.8 11.2 26.4 1.4

Haryana 5.3 2.5 1.3 3.4

Karnataka 4.3 4.3 9.1 1.5

Kerala 2.1 1.6 3.1 0.7

MP 6.7 5.0 2.7 6.8

Maharashtra 6.6 22.7 19.5 21.0

Orissa 0.9 0.2 0.5 0.0

Punjab 7.3 5.8 4.6 6.9

Rajasthan 10.5 3.9 5.4 3.2

Tamil Nadu 5.3 8.2 11.1 6.8

Uttar Pradesh 17.6 20.1 6.6 30.3

West Bengal 3.7 2.1 2.2 2.2

Value chains and smallholders chains?

Low volume, small marketable surplus, high transaction costs of participation, high cost of contracting, food safety compliance

Why small farmers are excluded?

Less dependence on a few large producers; spread supply risk; Optimal utilization of capacity, manpower; More labor, more efficient, More dependent on inputs and services hence better motivated for contract compliance

Why small farmers should

not be excluded?

Cooperatives

Producers associations

Intermediate contracts How to include:

Concluding remarks Improve and prioritize investment to

improve yields

Feed and fodder

Genetic enhancement

Delivery and information systems

Build capacities of farmers especially

women to own, and to protect livestock

against risks:

credit and insurance

Improve farmers access to markets

especially in eastern and hill states

Compliance with global food safety

standards for enhancing exports

Thank you