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-à-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 farmer’s 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
