The International Livestock Research Institute (ILRI) was one of the participants at a high-level 74th Annual Conference of the Indian Society of Agricultural Economics (ISAE) held 18-20 December 2014 in Aurangabad, India.

Steve Staal, ILRI’s regional representative for East and Southeast Asia, delivered a keynote address at the meeting, where he emphasized the role smallholders will continue playing in meeting rising demand for livestock products in the country and the region.

This year’s conference was organized by the Babasahed Ambedkar Marathwada University Department of Economics and brought together agricultural economists, policymakers, researchers, private sector and government officials and representatives from India and the region’s agribusiness sector.

This year’s conference focused on livestock marketing and supply chain management of livestock products, labour scarcity in agriculture, mechanization and the effects of subsidies on agricultural trade and the environment.

In his keynote, Staal said India’s status as the world’s largest milk producer and global leader in bovine meat exports was proof of the ongoing livestock revolution in many South Asian countries. It is estimated that by 2050, developing country demand for meat and dairy may grow by 50%, with demand in South Asia rising at the fastest rate of 4% annually.

According to Staal, smallholders will continue to play a major role in meeting this growing demand for livestock products in most of region, because they dominate ruminant livestock production.

A milk producer in India (photo credit: ILRI/Stevie Mann)

‘Smallholders are competitive because of the limited economies of scale and the crop-livestock synergies in ruminant production and local preferences for the fresh/traditional products for which they are best placed to provide,’ Staal said.

But he cautioned that smallholders are not immune to the threat of ‘supermarketization’ or the increasing share of large-scale food retailers that offers the convenience of being able to buy a variety of standardized products in one place.

To ensure they continue participating and benefitting from the changing livestock markets, Staal said there is need for new innovations in organizational models for linking farmers to output markets and to reliable high-quality services and inputs.

According to Staal, India offers many examples on successes in this regard. He said livestock sector stakeholders in the region should take advantage of rich opportunities offered by India’s long history of smallholder cooperatives, producer companies, use of variations of hub and cluster approaches and innovation platforms, which have successfully applied a business-oriented model for markets and services, including attracting private sector business development service providers.

Transporting fresh milk by motorbike in India (photo credit: ILRI)

He concluded that lessons from India’s innovative hub approaches in which private sector buyer companies and smallholder farmers share costs of livestock services and extension provision could offer a model that the CGIAR research program on Livestock and Fish that is carrying out dairy value chain interventions in Bihar.

See the presentation.