Agriculture Reference
In-Depth Information
the annual growth in production of high-value foods outpaces the rate in developed
countries (von Braun, 2007). For example, milk production increased by 4% from
2004 to 2006 in developing countries compared to 0.3% in developed countries.
Similarly, meat production increased by 4.0% in developing countries compared to
0.6% in developed countries over the same time period.
Furthermore, this variation in price elasticities by income implies food price
increases will have a greater impact on developing country consumers than consum-
ers in higher-income countries. This will particularly hold true for urban consumers,
who will not benefit on the income side from food price increases in developing
countries. Although the distinct distributional impacts within a country will depend
on its unique market structures and relationships, recent evidence from southern
Africa shows that in a period of grain shortages large farmers unequivocally ben-
efited from higher average prices, while urban consumers (especially poor consum-
ers) and rural consumers (including small farmers who purchase a portion of their
food in the market) suffered welfare losses (Jayne et al., 2006). Hence, the mental
image of food-insecure rural people in developing countries increasingly needs to be
amended to include urban dwellers living at the bottom of the income pyramid.
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The “livestock revolution” (LR) is “a complex series of interrelated process and out-
comes in production, consumption and economic growth” (Delgado et al., 1999).
Unlike its predecessor the green revolution, the LR is being driven by dramatic
changes in demand for livestock products. Per capita demand for livestock products
has been relatively stagnant in developed countries but is expected to grow rapidly
in developing countries during the next 15 years. A case in point is milk and dairy
products consumption. Delgado et al. predict that total consumption of milk products
in the developed world will increase about 7% by 2020. In contrast, milk demand in
the developing countries is expected to increase 132% by that year. This rapid growth
implies two major changes in the structure of world food demand: The principal con-
sumers of livestock products will be in the developing world, and the value of livestock
production is expected to surpass that of grains by 2020. These changes are being
driven by population growth, by growth in incomes, by urbanization in the developing
world (which increases the range of food choices and results in greater dietary diver-
sity), and by the declining real prices for both livestock products and cereals during
much of the past three decades. Growth in incomes has allowed many (but certainly
not all) consumers in the developing world to reach a satiation point of sorts with con-
sumption of grains and tubers, and they now seek greater dietary diversity.
The growth in demand for livestock products will result in dramatic transformation
of the production and marketing components of the supply chain. To meet the rapidly
growing demand, there must be an accompanying transformation of livestock sup-
ply, including increases in land area devoted to forage production, increased animal
numbers, and increased productivity of animals and land. Increasing productivity
