Foreword
Highlights of the Year
ICARDA's Research Portfolio
International Cooperation
Research Support Services
Appendices

ICARDA's Research Portfolio
Theme 4. Socioeconomics and Policy
  Project 4.2. Socioeconomics of Agricultural Production Systems in Dry Areas
 

Knowledge gained through socioeconomic studies can be applied when researchers work with farmers to develop improved, more sustainable production systems and household livelihood strategies. In 2002, ICARDA scientists completed a comprehensive study of small-ruminant production in WANA. Examining socioeconomic and market trends, this study promises to provide a platform for policy decisions which could greatly benefit the rural poor involved in this sector. ICARDA's Mashreq/Maghreb Project has already improved household food security in the region, by developing and introducing improved crop and livestock technologies. Recent surveys show an impressive rate of adoption, indicating a significant contribution to the welfare of farmers in the dry areas of WANA.

Livestock production and its influence on livelihoods in the dry areas

In ICARDA recently completed a comprehensive desk-based study of livestock production and livelihoods in the dry areas. Soon to be published, this study synthesizes current information about small-ruminant production and trade in the WANA region and raises critical questions concerning the improvement of this important sector. Such questions relate to factors that affect regional trade in small ruminants, influencing the income of millions who depend on them. The detailed picture given will be valuable both to ICARDA, in planning research for this sector, as well as to other international and national organizations interested in the sector's performance and the role it plays in the livelihoods of millions of rural people.
     Livestock production accounts for about one-third of the agricultural revenue of the WANA countries. In terms of the national incomes of these countries, the livestock sector was valued at US$107 billion in 1999, with small ruminants contributing $US25 billion (about 3%) to the total GDP. Some countries in the region depend more on livestock than others. For example, in 1999, livestock accounted for between 17% and 52% of the GDPs of Ethiopia, Mauritania, Pakistan, Somalia, and Sudan, but only between 3% and 8% of the GDPs of Algeria, Egypt, Iran, Morocco, Syria and Tunisia. Small-ruminant production is the main agricultural output in less favored areas (those receiving less than 300 mm of annual rainfall), and is the basis for the livelihoods of most of the poor people in such areas.
Trends in small-ruminant populations

In 2000, the WANA region contained 480 million head of small ruminants, 70% more than in 1960 (Fig. 22).
     Large producers (Group I), such as Ethiopia, Iran, Pakistan and Sudan, hold 56% of the total WANA small-ruminant stocks. Medium-sized producers (Group II), including Afghanistan, Algeria, Morocco and Somalia, hold about 19% of the total stocks. Small producers (Group III), including Egypt, Iraq, Saudi Arabia, Syria and Tunisia, hold 10% of the total. The remaining 15% of small ruminants are distributed amongst the other Gulf countries, and Lebanon, Jordan, Libya and Yemen.
     Supply and demand factors influence the region's small-ruminant population. On the supply side, the improvement of veterinary services (such as free vaccination) is a major factor contributing to the growth of the small-ruminant population. The provision of feed subsidies, organized feed deliveries, feed stores in dry rangelands, and credit (for sheep-fattening cooperatives) are also important factors, reducing production costs and risks, and increasing profitability. However, feed subsidies, though often intended to


Fig. 22. Small-ruminant population trends in the WANA region between 1961 and 2000 (Groups I, II and III denote groups of countries with high, medium and low production).

Consumption of meat of small ruminants in WANA increased from 1.2 million tonnes in 1963 to 3.0 million tonnes in 2000.
achieve social and equity goals by supporting livestock producers during drought years, are not avilable in the poorest WANA countries (such as, Ethiopia, Mauritania, Somalia and Sudan). On the demand side, the market has driven the increase in the small-ruminant population of the WANA region, providing powerful signals to producers. Two major demand factors affecting meat consumption are income and population growth.
     First, per capita meat consumption in WANA countries is strongly associated with per capita income. The Gulf countries with a GNP of over US$8000 per capita, recorded the highest per capita meat consumption (over 50 kg). The poorest countries, with per capita incomes of less than US$500, showed the lowest per capita meat consumption (below 20 kg). Second, rapid population growth (from 400 million people in 1981 to over 640 million in 2000) also increased demand. These demand factors led to the emergence of profitable sheep-fattening systems, targeted at major urban centers and export markets.
     Consumption of the meat of small ruminants in WANA increased from 1.2 million tonnes in 1961 to 3.0 million tonnes in 2000-an average annual growth rate of 2.2%. Small-ruminant meat production increased from 1.2 million tonnes in 1961 to 2.7 million tonnes in 2000-a slightly lower annual growth rate of 2.1%. The gap between production and consumption was filled by imports.

Market shares and implications for the poor

Traditionally, small ruminants were traded between WANA countries-a result of competitiveness, proximity, consumer preferences, established trade networks and religious and cultural familiarity. However, because many WANA countries could not meet the newly increased demand, new, non-WANA small-ruminant traders (including Australia, Bulgaria, Hungary, New Zealand and Romania) recently captured a substantial portion of the WANA small-ruminant


Fig. 23. Market share of WANA and non-WANA countries in the WANA small-ruminant market (1961-2000).

market. Though originally small in the 1960s (about 20%), their market share expanded to over 80% in the late 1970s (Fig. 23). WANA countries regained some of that lost market share in the 1990s, but even so, controlled only about 38% of the regional market by 2000.
     Probably it was the occurrence of a sharp rise in domestic demand in the traditional exporting countries of WANA which gave non-WANA exporters the opportunity to fill the gap between demand and supply. But, the following factors probably also contributed to the WANA producers' loss of traditional markets.
     Many WANA producers use nomadic, semi-nomadic or transhumance production systems, and rely on the use of common rangelands for feed resources and living space. Because such lands are usually state-owned, producers have no incentive to invest and improve their production capacities. Therefore, extensive production systems with low productivity dominate. These systems are relatively less competitive (in terms of price) than the high output:input ratio systems of the non-WANA exporters, leading to further potential loss of export markets.
     A lack of region-wide institutions governing animal health regulations and a lack of common rules may also have led to unilateral decisions to ban trade on the grounds of health, with or without evidence of significant health risks to consumers. Moreover, recent outbreaks of livestock diseases (such as Rift Valley Fever in East Africa, and Foot and Mouth and Mad Cow Disease in Europe) raise serious concerns which, if not addressed, could have a negative impact on the livelihoods of livestock producers in WANA.

Policy action needed

At the national level, policy changes are needed to stimulate the adoption of productivity-enhancing practices, to increase investment in the vast rangelands (upon which many livestock producers rely) and to reduce the risk of environmental degradation. Productivity-enhancing technologies are the key to competitiveness in the market place. Without productivity improvements, producers may not only lose traditional export markets, they may also lose their domestic markets to more competitive producers.
     ICARDA is collaborating with national agricultural research programs to develop and adapt livestock productivity-enhancing technologies in the dry areas. Market efficiency and access to investment capital (to modernize production systems) also affect the profitability of livestock enterprises. Research is needed on livestock marketing and the role credit plays in livestock improvement. Such research could provide guidelines for policy action. Certainly, in exporting countries, policy action is needed on measures which will reassure importing countries that livestock production meets required standards, minimizing human health risks.
     At the regional level, common policies and coordinated efforts on health-related regulations on livestock trade are essential. Without such polices, small-ruminant producers in WANA may fail to compete in the regional and global markets. This would have negative impacts on the livelihoods of poor, rural communities, particularly in livestock-exporting countries.

Adoption and economic impact of improved technologies in Mashreq and Maghreb countries

ICARDA's Mashreq/Maghreb (M&M) Project has developed and introduced several improved crop and livestock technologies into the farming systems of Algeria, Iraq, Jordan, Lebanon, Libya, Morocco, Syria and Tunisia. The project is being implemented by NARS in the eight countries, and by ICARDA and IFPRI, and is funded by the International Fund for Agricultural Development (IFAD), the Arab Fund for Economic and Social Development (AFESD), and the International Development Research Centre (IDRC). In order to assess the adoption rates of the introduced technologies (in terms of the percentage of sample farmers and percentage of land areas of sample farmers), surveys were recently conducted with 1148 farmers throughout the project. The economic benefits of the technologies were also calculated-i.e. productivity increases, cost-benefit ratios, and internal rates of return (IRRs).
     New barley technology is being adopted at high rates in the Project's target areas (Table 27)-a result of the improved varieties' higher yields, improved resistance to disease and lodging and, in some areas, distinctively higher returns.
Table 27. Adoption of improved barley cultivars and their impacts on productivity.
Country
Adoption (%)
Change in
productivity (%)
Farmers
Land area
Iraq
60
54
17
Jordan
55
67
25
Libya
17
12
na
Morocco
46
40
35 (grain), -12 (straw)
Syria
32
21
20
na= data not available.
     In Iraq, the improved barley variety 'Rihan 03' yielded 43% more grain than the local variety ('Aswad') when grown with fertilizer. This gave a net productivity increase of 19% over the local variety under the same input levels. In Syria, the net productivity increase was 20%; household food security (annual production of barley/household) also improved, by 14%, in comparison with local varieties. Amongst those who adopted the improved variety in Syria, the Gini coefficient was calculated to be 0.69, as compared with 0.82 for non-adopters. This means that the adoption of improved varieties has reduced the dispersion of the distribution of net returns among barley farmers there.
     In Morocco, improved varieties ('ACSAD 60', 'Annoucer' and 'Tamelalet') also increased barley grain yield (by 35%), although straw yield decreased by 12%, in comparison with the local variety. However, this trade-off does not affect the economic feasibility of using improved varieties. Moreover, the improved varieties contribute greatly to feed security, by increasing feed availability by 0.175 tonnes/head annually. Improved barley varieties had a neutral impact on the equality of income distribution among farmers in Morocco, with Gini coefficients estimated to be 0.14 for the local variety and 0.13 for the improved variety.
     Developed, tested, and disseminated by the M&M team as part of a collaborative effort, feed-blocks are another success story arising from this project. Feed-blocks (dietary supplements) are used to improve sheep production. Therefore, the project's experts trained private firms and extension staff in the setting-up of manufacturing plants. Feed-block production (from agro-industrial by-products) and use is now well established in Iraq (Fig. 24), where many sheep owners, regardless of flock size, now use them. A survey of 81 Iraqi sheep owners also indicated a high purchase rate, with blocks bought twice, on average, during the 1999/00 season. Through the M&M Project, feed-block technology has also spread to other countries, with adoption rates of 21% and 32% for farmers in Jordan and Morocco, respectively. Tunisia's adoption rate was only 17%; but, it was found that, in one dry season, around 25% of small ruminants in one community were fed feed-blocks.

Fig. 24. Development of feed-block technology
in Iraq: production and use.

Feed-blocks ready for distribution in Iraq.
     In Iraq, the use of feed-blocks increased sheep production by 32%, by increasing the number of lambs born. They also increased annual meat and milk production (by 4.09 kg and 8.28 kg/ewe respectively), when 116 kg of feed-blocks/ewe were used with conventional feed resources (barley grain, straw and green fodder). The benefit-cost ratio for feed-block use was 1.56, while the IRR was 87%. Comparing this IRR with the effective rate of interest (10%) indicates that investment in feed-blocks is paying farmers high dividends.
     In Tunisia feed-blocks are being used as a substitute for expensive feed resources (such as barley grain and wheat bran), giving an estimated IRR of 57% while maintaining weight levels in small ruminants. In Jordan, where early weaning is used to increase milk production, the use of feed-blocks adds an additional 0.78 JD/head (US$1.01) to the net revenue gained.
     Because they are a welcome supplement during drought seasons, in Iraq, the project also made available 11.4 kg of feed-blocks per head during the dry 1999/2000 season, when up to 85 kg per head were bought and used by some sheep owners to bridge the feed gap they faced.
     The planting of cactus, and its use as an animal feed, is expanding in the Maghreb region with government support. In Algeria and Tunisia the practice is well established, with adoption rates of 40% and 17%, respectively, among farmers in the target communities. Furthermore, 37% and 24% of the target communities' lands in Algeria and Tunisia are planted with cactus. Estimates of the IRR obtained in Tunisia when cactus is planted in natural rangeland vary from 73% (without government subsidies) to 80% (with government subsidies). When planted in marginal cereal-growing land, IRRs for monocropped cactus range from 61% to 66%, and from 81% to 89% for cactus alley-cropped with barley. Comparable IRRs were obtained for cactus alley-cropped with barley in Algeria (71%-99%). Similarly, in Morocco, alley cropping saltbush (Atriplex spp., another drought-tolerant forage) with barley gave an IRR of 79% (compared with 59% for monocropped barley), indicating the efficiency of research investment in this technology.
     Using rainfall data (1974-1998), estimated production functions were used to predict yield levels of barley in rotation with forage legumes. The barley/vetch, barley/vetch-barley mixture and barley/fallow rotations were most profitable, and thus are recommended for the low-rainfall area in Iraq. The barley/fallow rotation was one of the most efficient, even though the net return it gave was not the highest, probably because of its low coefficient of variation. However, before recommendations are given to individual farmers, more information on their personal preferences and objectives is needed. For farmers with

Simple structures, such as this stone dyke, help farmers retain precious rainwater to maintain their plantations of fruit trees and fodder plants, such as the spineless cactus, foreground.
mixed crop-livestock enterprises, the rotations of barley/vetch and barley/vetch-barley mixture are recommended, as they allow better crop/livestock integration.
     Several other technologies have increased the welfare of the rural poor in the selected areas. In Syria, the use of vetch in barley rotations, and early weaning, had adoption rates of 28.5% and 28.8%, respectively, influencing sheep raising and related economic returns. Sheep-raising in the Maghreb region also benefited from the use of improved rams. In Algeria, for example, 6% of sheep owners bought improved rams, and 16% of the ewes in the study communities were mated by them.
     In conclusion, the technologies introduced are economically feasible regardless of government subsidies, though government incentives are important initially, in securing widespread dissemination of the technology. However, the relatively high IRRs noted were only achieved because the technologies introduced were designed specifically for the areas the project targeted in the low-rainfall Mashreq and Maghreb countries.