Livestock Economics and

Pastoral Development
 Course Objectives
◼ To provide students with a clear, up-to date, and straightforward approach
to learning how a market-based economy functions, and how to use
simple economic principles for improved decision making. Emphasis is
placed on the intuition of profit maximization, and how the intuition can
be used to improve both personal and professional decision making.
◼ To showcase the power of economic principles to explain and predict
issues and current events in the livestock, agribusiness, international
trade, natural resources, and other sectors.
◼ To develop the ability to use and manage resources for optimum returns
to resources.
 Course Outline
◼ Introduction to Economics
◼ Price Supply and Demand
◼ Consumer Options
◼ Facilities and Companies
◼ Consumer to Consumer Relation
◼ Free Shops and Compositions
◼ Role of Animal Resources in Economic Development
◼ Economy of Meat and Milk Production
 References
◼ Archana Ruhela and Malini Sinha (2010). Livestock Economics. Oxford
Book Company, Jaipur, India.
◼ Andrew Barkley and Paul W. Barkley (2013): Principles of Agricultural
Economics. Cenveo Publisher Service.
◼ John B. Penson, Jr., Oral Capps, Jr., C. Parr Rosson III and Richard T.
Woodward. Introduction to Agricultural Economics. Seventh Edition.
Pearson, 2018.
◼ Subba Reddy, S., Raghu ram, P., Neelakanta Sastry T.V., Bhavani Devi I.,
2016, Agricultural Economics, Oxford & IBH Publishing Co. Private
Limited, New Delhi.
 Method of Delivery
◼ Lectures
◼ Discussion
◼ Presentation
 Mode of Assessment
◼ Class participation 5%
◼ Assignments and quizzes 15%
◼ Mid-term examination 10%
◼ Final examination 70%
◼ Total 100%
 Class Participation
◼ Generally, Participation in class discussion is critical. This does not
require that you stun your classmates with insight.
◼ Sharing relevant experiences is very valuable. Clarification questions
are also highly valued (if it’s not clear to you, chances are it’s not
clear to others). Good class participation also involves:

-Arriving on time
-Remaining seated until class is over, and
-Remaining quiet and attentive unless contributing to class discussion.

◼ The purpose of assignments is to review what you learn in the class

and provide practice in applying concepts learned in class. You can’t
learn without practice.
 STUDENT CODE OF CONDUCT
◼ No talking when the instructor is talking.
◼ No hats in class
◼ Cell phones must be turned off during class
◼ Participate in class discussion.
◼ Language of instruction for this class is English. You have
to write all of your answers and talk to me in English.
◼ Late coming to class is not allowed
 Livestock Global Value

▪ The livestock sector is a significant global asset with a value

of at least $1.4 trillion.
▪ The livestock sector employs at least 1.3 billion people
globally and directly supports the livelihoods of 600 million
poor smallholder farmers in the developing world.
▪ Keeping livestock is an important risk reduction strategy for
vulnerable communities, as livestock are important providers
of nutrients and traction for growing crops in smallholder
farming systems.
▪ Livestock products contribute 17 percent to kilocalorie
consumption and 3 percent to protein consumption globally.
▪ However, there are large differences between high- and low-
income countries.
 South Sudan Livestock
▪ The population of South Sudan is overwhelmingly rural and
primarily dependent on subsistence farming or animal
husbandry for their livelihoods.
▪ South Sudan has Africa's highest livestock per capita, with
13.78 million cattle and 32.54 million sheep and goats (FAO
SAT, 2021).
▪ About 65% of households in South Sudan are livestock
producers, either as pastoralists or agro-pastoralists.
▪ However, livestock’s contribution to the economy of South
Sudan is low due to its traditional, untapped, and
underdeveloped nature.
▪ South Sudanese keep livestock not only as a source of food,
but livestock signifies status and wealth and serves as the
main livelihood asset for pastoralist communities.
 South Sudan Livestock

▪ Livestock is sold for cash, slaughtered for cultural practices,

bartered for grain, used as payment for penalties, and given
for dowry.
▪ Hence, any disruption in livestock, such as dramatic rises in
disease outbreaks and death, poses a grave threat to the
livelihoods and food security of pastoralist communities
across the country.
 The Significance of Livestock
in South Sudan

▪ Livestock is key to food security and its four channels of

availability, accessibility, utilization, and stability.
▪ In areas where the potential for crops is limited, the pastoral and
agro-pastoral systems are the main sources of food and
sustainable livelihoods.
▪ Livestock accounts for 30% of the total primary food consumption
in value terms in South Sudan.
▪ Sixty (60%) percent of the country’s livestock is raised under the
pastoralist system. Most livestock farmers' income comes from the
pastoral system.
▪ Livestock, therefore, contributes both directly to food availability
and indirectly to food accessibility by generating income.
▪ Despite this huge number of livestock in the country, persistent
cattle rustling face livestock rearing and farming communities.
 What is Livestock Economics?
• Economists are particularly interested in how people produce
and consume items such as food, clothing, housing, and a
myriad of other things.
• Economists divide people into two broad groups, Producers
and Consumers.
• Note, though, that many, perhaps most, people belong to
both groups.
• Producer is an individual or firm that produces (makes;
manufactures) a good or provides a service.
• Consumer is an individual or household that purchases a good
or a service.
 What is Livestock Economics?
◼ A Good is a physical product, and a Service is an intangible
product such as a haircut, an insurance policy, or cell phone
service.
◼ These two groups of people are so important in economics
that they have several names:
◼ Producers = firms = business firms = sellers
◼ Consumers = households = customers = buyers.
◼ Livestock producers are individuals, families, or firms that
grow and sell livestock and livestock products. The animal
products include milk products, meats, wool, furs.
Definition of Livestock
Livestock refers to domesticated
animals raised in an agricultural
setting for food (meat, milk, eggs),
fiber (wool, leather), manure and
draught power.
Essentially, they are animals kept for
human use and benefit. This includes
cattle, sheep, goats, pigs, and
poultry, among others.
Definition of Economics
Economics is a social science that
deals with how consumers, producers
and societies choose among the
alternative uses of scarce resources
in the process of producing,
exchanging, and consuming goods
and services.
What is Livestock Economics?

Livestock economics is an aspect of

agricultural economics that deals with
how producers, consumers and societies
use scarce resources in the production,
processing, marketing and consumption
of livestock and livestock products.
 Definition of Livestock
Economics
◼ Livestock economics covers all the four branches of
economic life of the livestock community,
production, exchange, distribution and consumption.
◼ The primary interest is in applying economic logic to
problems that occur in livestock production.
 Concept of Livestock
Economics
◼ Demand for and consumption of livestock products have
steadily increased in Africa due to robust and sustained
economic growth over the past two decades – coupled with
population growth, rising incomes, a growing middle class,
and urbanization, all driving a shift in dietary habits.
◼ The estimated average consumption of 19 kg of meat and 44
kg of milk in 2013 is set to increase to 26 kg and 64 kg,
respectively, in 2050.
◼ However, under current trends African producers will be
unable to sustainably satisfy this growing demand.
◼ This is largely due to challenges that include unsustainable
production practices, the impacts of climate change, as well
as limited adoption of appropriate technologies along the
value chain.
 Concept of Livestock
Economics
◼ Without dramatically transforming the sector, estimates show that
between 2030 and 2050, one tenth to one fifth of the beef, pork,
poultry and milk consumed in Africa will come from outside the
continent.
◼ Climate change affects rainfed fodder (pasture) and water availability,
increasing seasonal fluctuations in production, while higher frequencies
and intensities of droughts and floods cause greater livestock mortality,
as well as a decrease in productivity and a fall in the quality of forage.
◼ Temperature changes and varying rainfall levels can also affect the
severity and distribution of diseases and parasites, impacting animal
health.
◼ The livestock sector is a significant contributor to global human-
induced greenhouse gas emissions through the production of feed and
other inputs, as well as downstream operations for transport, cooling,
storage and processing of livestock products.
 Concept of Livestock
Economics
◼ In addition, livestock overgrazing can lead to biodiversity loss
through a reduction in plant cover, which negatively affects the
population sizes of wild herbivores and predators.
◼ Poor manure management practices, especially from large-
scale livestock farms, can further amplify nutrient pollution
(soil, water and air), while the imprudent use of manure can
reduce soil fertility and lead to excess minerals and nitrates in
surface and underground water resources.
◼ Finally, a lack of adoption of basic biosecurity standards for
human and animal health is another challenge preventing
especially small livestock keepers and pastoralists from market
participation and trade.
 Scope of Livestock Economics
◼ The rapidly increasing demand for livestock products pushes against a
traditional resource base for livestock production that cannot expand at the
same pace. The scope for increasing the traditional feed resource base is
limited.
◼ Firstly, across the world the most productive pasture lands are being turned
into cropland as the demand for high-potential arable land continues to
increase.
◼ Secondly, the basic principles of crop research are to optimize the
transformation of land resources, solar energy and inputs into high value
products, for example, into grains. Consequently, the availability of crop
residues for animal feed does not increase with rising yields.
◼ Finally, livestock economics must be concerned with solutions of those
problems that require the active participation of the Government, i.e.,
problems connected with price control, supply of credit, international trade.
 Basic Economic Decisions
◼ Every economic system must resolve five basic issues:
◼ The five questions may change slightly from person to person,
but they always come back to:
◼ What (if anything) should I produce?
◼ How much should I produce?
◼ How should I produce it?
◼ When should I produce it?
◼ For whom should I produce it?
◼ These basic questions form the foundation of the lessons and
discussions in this course.
 Significance of Livestock
Economics
◼ Livestock provides not only food for the producers, but also a range of
other products, which could be sold or consumed by the livestock owner to
provide nutrition, income, traction and fuel.
◼ The major products of livestock include draught power, meat, milk, eggs,
manure which is used as fertilizer or fuel, feathers, fiber, hides, and horns
◼ In addition to these products livestock serve as an asset and may provide
a reserve that can be converted to cash in times of need.
◼ For millions of smallholder farmers, animal draught power and nutrient
recycling through manure compensate for lack of access to modem inputs
such as tractors and fertilizer, and help to maintain the viability and
environmental sustainability of production.
◼ Often, livestock constitute the main, if not the only, capital reserve of
farming households, serving as a strategic reserve that reduces risk and
adds stability to the overall farming system.
 The contribution of Livestock
to the Economy
◼ Food Nutrition. Meat, milk and eggs provide more than protein. They
also provide essential micronutrients that are less available in plant-based
foods.
◼ Livelihood. One billion people are involved in livestock value chains
globally, with more than half of these dependent on livestock for their
livelihoods.
◼ Health. Livestock enhance human health in developing countries by
providing nourishing foods, which are the foundation of good health and
help the body protect itself against, and recover from, diseases.
◼ Environmental Protection. Livestock production helps make optimal use
of all the planet’s biomass, exploiting its full ecological potential and
supporting a circular, regenerative food production system where nothing
is wasted.
 Key Takeaways
◼ Livestock plays multiple roles in the livelihoods of people in
developing communities, especially the poor by providing food
and nutrition, work, economic and social status, and ensure
environmental sustainability.
◼ Population growth, urbanization, and most importantly,
increasing income have resulted in a rapid increase in demand
for livestock products, which is likely to continue well into the
future.
◼ This growth of the livestock sector presents both enormous
opportunities and challenges.
◼ A vibrant animal research enterprise will be central to an
effective response to potential threats to animal agriculture to
ensure national as well as global food security.