Livestock Breeding Technologies and Rural Development

Development Experiences

Cees de Haan1

Introduction: Livestock Development in a Changing World

Support for livestock development will remain an important element of the

international development agenda, although the nature of that support might significantly
change. First, there is an increasing realization, that livestock development programs can
play an important role in reducing rural poverty in the developing world. Over 500
million of the world's poor (LID, 1998) derive at least a part of their livelihood from
livestock, and for many of them, raising animals is the only way of getting out of their
poverty trap. With an increasing focus of the international development agencies to
poverty alleviation, we see also a growing attention of these agencies to the livestock
sector.

Second, the demand for animal products in the developing world is growing fast,
and this can be expected to continue. Recent projections show that over the next twenty
years, the demand for meat in the developing world will increase by about 2.7 percent
and the demand for milk and dairy products by about 3.2 percent (Delgado et al, 1999).
If current trends continue, a large share of this increased demand will have to be
produced domestically. Over the last decade, the share of meat, which was
internationally traded remained at about 14 percent of the total global consumption
(McCalla et al, 1998). If internally traded share remains globally constant, that means
that the increase in demand has been coming from domestic production. While increased
globalization and trade liberalization might offer some possibilities for increased
international trade, might increase the share somewhat, increasing environmental
regulation in the OECD countries will constrain expansion of the production there. In
addition, there are other constraints to an expansion in the OECD countries. WTO tariff

1
Sr. Livestock Development Advisor, World Bank, Washington D.C. The opinions in this paper are
those of the Author, and do not necessarily reflect those of the World bank or its affiliates.
reforms is eroding some of the advantages of farmers in the EU and US, so production,
especially of the highly protected dairy sector is shrinking. With land and water
becoming major limiting factors to the expansion of dairy and beef production in
respectively New Zealand and Australia, the future expansion can be expected to be in
the developing world (McCalla et al, 1998), with especially good opportunities in the
Southern Cone of South America, and in niches in East Africa and South Asia.

Evolving Livestock Strategies

This growth in production in the developing world, if left unche cked, could easily
lead to increased environmental pressure and social inequity, as smallholders are being
crowded out by industrial production (de Haan, et al, 1997). International development
support for livestock development is therefore changing to address these emerging issues.
From a pure production focus, often through parastatal agencies in the seventies and early
eighties, to an increasing attention to the milk and meat production of smallholders and
mixed farmers in the late eighties and early eighties, international support for livestock
development is increasingly directed to address environmental and social sustainability
and food safety issues. Improving the national supply of livestock products is
increasingly seen as a pure private responsibility, public services are increasingly being
concentrated on environmental mitigation and poverty alleviation.

Livestock Genetics and International Agencies

The above developments are, to some extent, reflected in the characteristics of the
support provided by international agencies for livestock genetics. In the seventies and
early eighties, the main emphasis was on the export of exotic breeds from the developed
countries to large parastatals or private producers in the developing world. Rather
massive exports of lots of 500-1000 head of mostly female stock, especially Holstein-
Friesian from US and Europe to East Africa and Latin America, were typical examples
of this development phase. They demonstrate the clear emphasis of that period on
increasing production without attention to the social impact and financial and institutional
sustainability. The results were generally poor, due to the poor sustainability of the
parastatal farms and the poor adaptation of the imported exotic breeds to the local
conditions.

This changed in the eighties to increased attention to institution building, whereby

the main emphasis was on the establishment of Natural Breeding or Artificial
Insemination Centers for commercial farmers or smallholders. The World Bank has
supported AI in countries such as China, India, Morocco, Nigeria, Tunisia and Vietnam.
East Africa was typically covered by some of the bi- lateral donors, such as Sweden and
the Netherlands for Kenya, and Denmark for Tanzania. A typical World Bank program
consisted of the establishment of AI centers and the provision of equipment for the
production and distribution of Liquid Nitrogen, artificial insemination equipment,
training of staff, means of transport, and the provision of bulls and/or frozen semen, and
more recently embryos.

Currently, the emphasis is more on genetic improvement for poverty alleviation,

and there is also an increased attention for the conservation of local animal genetic
resources. In areas of high population pressure, where the majority of the rural poor live,
the small farm size often precludes an increase in herd or flock size. For example, 60
percent of the farmers with livestock in India own less than 0.5ha, and increasing the
number of animals per household, is therefore not possible. Improving the productivity
per animal is often one of the few possibilities of increasing farm income and get farmers
out of the poverty trap. Poor people generally live in marginal areas, under harsh
climatic conditions, where the exotic breeds are less adapted. Conservation of local
genetic resources through the genetic improvement of these local breeds has therefore
gained importance in the international agenda. Finally, the small herd size of the poor
doesn't allow the maintaining of sires at each farm, and other ways of delivery of genetic
resources need to be sought. Artificial insemination is conceptually the main channel to
reach these poor people with improved genetics of high genetic and sanitary standards.
 Artificial Insemination in the Developing World

Undoubtedly, artificial insemination services are making progress in the

developing world. According to Cunningham (1999), there were (1995) nine million first
inseminations in the developing world, or 17 percent of the number of inseminations
world-wide. Five million of these first inseminations are in South Asia. Most advanced is
India, with about ten million total inseminations (five million first), covered by about
20,000 AI stations, about half of them by the cooperative movement of the National
Dairy Development Board. Growth has been rather slow, although it is picking up, in
particular in Asia. In India, about ten percent of the breedable cow and buffalo
population are now covered by AI. And undoubtedly, AI has been a major force behind
the growth in dairy production in the developing world, in particular in the peri- urban and
high potential areas, with good infrastructure and large production units. However, there
are major constraints to AI in many areas, and in particular for smallholders.

First, current programs, with prevailing technologies are expensive and difficult to
sustain. A typical program in East Asia for a national station, including semen
production, costs US $ 1.5 million or more, a provincial or regional station (without
semen production) with about 100,000 inseminations cost about US $ 200,000. At the
field inseminator level, the investment costs for about 500 inseminations per year (a good
average number in developing countries) are between US $ 250 and US $ 2500
depending mainly on the type of transport means and the liquid nitrogen capacity.
Operating costs (without labor and semen) are US $ 1-2 per insemination, with an
additional cost of about $ 2.00 per dose semen. Total costs, including labor easily arises
to US $ 4-5 per insemination or about US $ 10 per calf born. This is the equivalent of
30-40 liter of milk, a significant part of the household income at the prevailing
production levels of 1000-2000 liters per lactation.

Second, results from many areas of the world show that non-return and conception
rates of AI is are significantly below those of natural service. For example, public
services in India, generally report non-return rates at first insemination of 20-40 percent,
against about 60 - 70 percent for natural service (World Bank, 1997). Only the state of
Kerala shows a success rate of about 50 percent at first insemination. Poor heat
detection, resulting from genetic as well as nutritional factors, deficient infrastructure and
communications and rigid administrative rules of the dominant supplier, the public
service are main factors behind these poor results. Maintaining stored semen in cryo-
preservation and the exact timing of the insemination consist major quality problems.

Third, the quality of the genetic material on offer is often not suitable for the
producer in the developing countries and even less for the small holder. Most semen
provided by services in the developing world comes from sires from temperate climates,
ignoring the Genetic x Environment interactions, which define to a large extent the
phenotypic outcome. For the selection of sires adapted to tropical environments,
performance (milk, meat) recording systems have not been very successful in developing
countries, and if kept, the number of dams for progeny testing is usually too low, to
identify sires appropriate for the prevailing conditions. This is even worse for the local
breeds, which, as mentioned before, can be the most efficient way of genetic
improvement for the stock of the poor living in marginal areas.

Fourth, willingness to pay for AI is below the cost price. In an extensive survey in
three states of India, using sophisticated survey techniques, Ahuja et al (2000) reported
averages charges for AI between $ 0.50 and $ 1.40 per insemination, and an average
willingness to pay going up to US $ 2.50 of 80 percent of the population surveyed. It was
interesting that the highest fee paid, and highest level that small holders were willing to
pay, was in the state of Kerala, where AI has been introduced in a massive scale over the
last three decades. In contrast, actual pay for natural service was US $ 1.00 till US$ 2.00,
still above all levels indicated for AI in all states. The higher price being paid for natural
service, is certainly due to the higher conception rates. A regular calving, and therefore a
regular lactation each year is still the most important objective of the small holder farmer.

Fifth, it is therefore not surprising that the financial sustainability of current AI

services is a major problem. Currently most programs require subsidy. Current charges
in India, for example vary between US $ 0.05 and $ 0.50 per insemination2 way below
the US $ 4.00 -US $ 5.00 the insemination actually costs. Similar low levels are reported
in North Africa. This high level of support implies that continuous public sector support
is required, although the service as such is a poor private good. With fickle government
funding, it is therefore not surprising, that AI services have performed rather poorly. On
the other hand, with the high level of subsidy to public services, private sector has been
very reluctant to come in.

The Need for New Approaches

The above overview, I hope, presents a compelling case for trying new approaches
in the delivery of better genetics in the developing world. There is clearly a need for
genetic improvement, especially in traits suitable to achieve a high and sustained
production under the harsh conditions of the tropics. The current system using
sophisticated equipment for AI has serious disadvantages beyond the peri- urban areas
and commercial units. A more robust system, as the agenda for this meeting will discuss,
is therefore highly desirable, and could merit significant interest of the development
international community.

References.

Ahuja, Vinod, D. Umali-Deininger and C. de Haan (2000) Agricultural Support Services and the
Poor: Case of Livestock Health and Breeding Services in India. World Bank Technical Report (in
press)
Cunningham, E.P. (1999). The application of biotechnology to enhance animal production in
different production systems. Livestock Production Science 58 1-24.
Delgado C. et al., 1999. Livestock to 2020: The next food revolution. IFPRI/FAO/ILRI.
Technical Paper Washington D.C.
de Haan, C., Steinfeld, H and Blackburn, H. 1997. Livestock and the environment: Finding a
balance. European Commission Directorate-General for Development: Brussels.
LID (1998). Poverty reduction: A review of best practice in the livestock sector. Livestock In
Development, Crewkeren.
Mc Calla A. and de Haan, 1998. An international trade perspective on livestock and the
environment. In proceedings of the International Conference on Livestock and the Environment
held in Ede/Wageningen, the Netherlands, 16-20 June 1997, organized by World Bank, FAO,
International Agricultural Centre, February 1998, pp 13-21.

2
The difference between the price charged to the farmer and the government official fee levels are
caused by payments directly to the inseminators
World Bank (1999). Enhancing Growth and Development: India Livestock Sector Review. South
Asia Rural Development Series. World Bank and Allied Publishers Delhi.