Do higher meat and milk prices adversely affect poor people?

Based on new projections for global food demand, higher prices mean that a larger number of poor consumers will have reduced access to food. This is a key finding in the latest issue of id21 insights.

The February 2008 issue of id21 insights focuses on ‘The growing demand for livestock’.  Population and economic growth in developing countries are increasing the demand for food, particularly meat and milk. The growth in food consumption is shifting from industrial to developing countries. As global demand for meat and milk increases, many policies will focus on promoting international trade in livestock and livestock products.

This insight paper contains eight short articles exploring who will benefit from the expanding global markets.

In the article, ‘Do higher milk and meat prices adversely affect poor people?’ division director and policy economist at the International Food Policy Research Institute (IFPRI), Mark Rosegrant and ILRI agricultural systems analyst, Phil Thornton, explore what rising prices will mean for the poor.

One of their key findings is that a larger number of poor consumers will have reduced access to food. Poor livestock keepers will be hit hard and higher cereal prices will impact negatively on all poor people. This is based on new projections for global food demand, produced by IFPRI’s ‘IMPACT’ model and linked to ILRI’s livestock spatial location-allocation model (SLAM).

Thornton warns ‘while there are considerable opportunities for livestock growth, there is a danger that smallholder producers and other poor livestock-dependent people may not be able to take advantage because their access to markets and technologies is constrained.’
The expected growth in demand and supply of livestock-related products will mean profound changes for animal production systems. While there are many opportunities, there are also risks that need to be considered and managed:

• If appropriate food standards and regulatory systems are not implemented, expanded market activity and a rise in exports of livestock and livestock products could threaten food safety and increase the risk of animal disease transmission.
• Declining resource availability could lead to the degradation of land and water resources in livestock systems, as well as loss of animal genetic resources/indigenous livestock diversity.
• In grassland-based systems, grazing intensity is projected to increase by 50% globally as early as 2030, which may result in resource degradation in places.

Pro-poor international trade policies needed

Rosegrant and Thornton conclude that long-term policies will be necessary to ensure that the development of livestock systems plays a role in reducing poverty, as well as mitigating negative environmental impacts, encouraging income equality and supporting progress towards reducing malnutrition.

‘People are increasingly recognising the need to promote pro-poor international trade. We need policies to ensure that small-scale farmers can produce safe livestock products and sell them in appropriate markets. Unfortunately, there are not many examples of this happening in practice’ concludes Rosegrant.

Download id21 insights 72:

Related ILRI article:

A recent ILRI top story (November 2007) highlighted opportunities arising from soaring global milk prices. Rising prices worldwide meant that new export opportunities were opening up for Kenya’s dairy sector. Kenya has about 1.8 million rural households keeping some 6.7 million dairy cows.  These small-scale farmers and traders handle more than 80% of all the milk marketed in Kenya.

This good news came with a warning: poor consumers dependent on milk would eventually be faced with higher local milk prices and that innovative ways of reducing the negative impacts on the poor would need to be devised.

Further Information:

Phil Thornton
Agricultural Systems Analyst
International Livestock Research Institute (ILRI)


Mark Rosegrant
Director of Environment and Production Technology Division
International Food Policy Research Institute (IFPRI)
Washington D.C.

Background Information:

About id21 insights
id21 insights is a thematic overview of recent policy-relevant research findings on international development aimed at specialist and generalist audiences. Funded by the UK Department for International development (DFID), it is distributed free to policymakers and practitioners worldwide

Other articles in id21 insights 72 (February 2008):

Editorial – The growing demand for livestock: will policy and institutional changes benefit poor people?
Enhancing women’s access and ownership of livestock
Is pastoralism a viable livelihood option?
Meat and milk: developing countries and the global livestock trade
Supporting livestock-centred livelihoods: what can NGOs do?
Veterinary medicine: the slow road to community and private sector participation
Commercial destocking: A livelihood-based drought response in southern Ethiopia

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