Determinants and implications of the growing scale of livestock farms in four fast-growing developing countries

Livestock are among the few commodities that smallholder farmers widely produce that are growing rapidly in demand, and thus the interest for poverty alleviation is strong. However, there are signs that smallholders may ultimately be displaced from this source of livelihood by competition from larger-scale farms.This report investigates factors affecting the scaling-up of selected livestock products in Brazil, India, the Philippines, and Thailand, with particular attention directed at understanding issues affecting small-scale producers.<br /><br />Specifically, the research examines whether the market share of large farms is growing relative to small farms and, if so, why. The analysis is directed primarily toward the issues of efficiency in production and its determinants, but also deals with the unit costs of inputs received and the unit prices for outputs obtained. The environmental impact of small and large scale livestock production and mitigation efforts by both are also considered.<br /><br />Overall, the study&rsquo;s findings suggest that:<br /> in many cases smallholders other than the smallest backyard producers will be able to stay in the livestock business for a long time. However, if the opportunity cost of family labour rises. much of the competitiveness of smallholder operations vis-&agrave;-vis large farms will be vitiated small farms have less of a negative impact on the environment than do large farms, hence environmental concerns are compatible with promoting small-scale livestock production the future of large and small producers will sink or rise together depending on their ability to act collectively to deal with emerging environmental and disease threats possible key to pro-poor livestock development is institutional development that overcomes the disproportionately high transaction costs that smallholders face in securing quality inputs and getting market recognition for quality outputs.<br />The authors conclude that it is hard to see a bright future for smallholder livestock production in fastgrowing developing countries, which will require ways to allow smallholders to establish trust and reputation along the value chain. On the other hand, it is unlikely that smallholders will disappear anytime soon, and the livestock sector is fundamentally a sector in which all participants sink or swim together.