Focus
 
Helping Small Enterprises Capture the Livestock Products Market
in West Asia and North Africa
Aden Aw-Hassan, Farouk Shomo, and Luis Iñniguez
The good news is that demand for small ruminant products in West Asia and North Africa (WANA) is expected to grow due to increased affluence and population growth. The bad news is that the poor in marginal areas of the region whose livelihoods depend on livestock production may lose their market share due to low productivity and poor marketing infrastructure. Improper livestock production practices may also erode the natural resources.

S
mall ruminants (sheep and goats) are an important source of income for the poor living in semi-arid areas (less than 300 mm average annual rainfall) mainly because they require low initial capital and maintenance costs, and use marginal land and crop residues to produce milk and meat. They are a source of key nutrients, in particular proteins and minerals, for poor households. The WANA region is one of the important domestication centers from where small ruminants expanded to other areas. Current estimates indicate that there are 75 sheep and 35 goat breeds in the region, adapted to the marginal environments. The population of small ruminants in WANA increased from 380 million head in 1960 to 660 million head in 2000. Consumption of small ruminant meat, which increased from 1.2 to 3 million tons during 1961-2000, is expected to rise to 4.4 million tons by 2020.

Why the small ruminant sector is growing
A number of factors are leading to the growth of the small ruminant sector in WANA. Improvements in services such as free vaccination and availability of veterinary medicines are contributing to better health and reduced mortality of flocks. Governments also intervene during drought periods to assist farmers through distribution of subsidized animal feeds, rescheduling of loans, and investments in water development and animal health. In the 1990s, several countries implemented measures and policies aimed at limiting the social and economic damage caused by droughts. These included emergency purchases and distribution of concentrate feed to livestock owners; veterinary measures, water development, and access to credit and debt relief.

Feed imports and use of crop residues as feed are contributing to the improvement in nutritional status of small ruminants in WANA. Though feed subsidies have been largely eliminated in recent years, producers, especially those with collateral, can still receive subsidized government loans to buy feed. Also, producers are now able to effectively collect and utilize crop residues, which have reduced such drought-mitigation practices as culling of animals. The reduced reliance on natural grazing and increased utilization of crop residues and purchased feed has also led to the development of intensive and semi-intensive production systems such as lamb fattening.
A sheep market in Syria.

A significant factor in the trends of small ruminant production is income growth in the Gulf countries which has led to a rapid increase in meat consumption. In addition, the region has experienced rapid population growth and positive changes in average incomes. The population of WANA grew from 400 million in 1981 to more than 640 million in 2000. The increase in urbanization resulting from this high population and income growth has brought changes in dietary patterns in favor of meat consumption. This is because consumers in urban areas have more options to diversify their diets and are, therefore, likely to consume more meat and milk products.

The environmental costs
The increase in small ruminant production, however, is taking place at a heavy cost to the environment. High stocking rates have contributed to natural resource degradation, mainly vegetation and soil degradation and the loss of plant biodiversity. The resulting land degradation is increasing the pace of desertification as growing animal numbers compete for grazing resources. Desertification and soil degradation in WANA are affecting at least 709 million hectares of rangelands and are reaching alarming levels, particularly in Afghanistan, Algeria, Ethiopia, Iran, Morocco, Pakistan, Saudi Arabia, Sudan, and Turkey.

How the poor are losing out
The increased demand for small ruminant meat in WANA offers both opportunities and challenges to small producers. In the past, most countries in the region imported small ruminant products from within WANA due to competitiveness, proximity, consumer preferences, established trade networks, and religious and cultural familiarity. However, many countries in WANA now import small ruminant meat from Australia, Bulgaria, Hungary, New Zealand and Romania. WANA countries currently hold about 61% of the market within the region, an indicator that local exporters are not taking full advantage of the expanding regional market and may even further lose market share if the trend continues.
Farmers discuss the benefits of an elevated milking ramp with an ICARDA researcher.
Among the reasons for this decreasing share of the market are small ruminant health-related trade restrictions, poor market infrastructure, and lack of information about the dynamics of export markets and lack of polices to effectively respond to export market requirements. Gulf importers, for instance, say that livestock from Australia and New Zealand arrive in much better physical shape than those from the horn of African countries because of better handling. In addition, many small ruminant producers in WANA use nomadic, semi-nomadic or transhumance production systems which rely on the use of common rangelands for feed resources and living space. Because rangelands are state-owned, producers have no incentives to invest and improve their livestock productivity. Therefore, extensive production systems with low productivity dominate. These systems are relatively less competitive.

In order for the poor small ruminant producers to compete favorably on the increasingly open market, a number of changes need to be made in policies, production systems and marketing. ICARDA has been studying various options (see page 16) with the national agricultural research systems in the region.

Technology options
The adoption of improved animal health and nutrition practices, genetic enhancement and better handling are essential for achieving higher small ruminant productivity. Plant species adapted to the dry areas can increase feed supply, particularly during dry years, as the experience of North African countries like Tunisia and Morocco, which now grow cactus, shows. Spineless cactus or shrub (Atriplex halimus) alone or intercropped with barley, vetch, oats, or other forage crops can improve the supply and quality of feed resources and prevent soil erosion, especially on hillsides. Multi-nutrient feed blocks, made from agro-industrial by-products and other ingredients, are a low-cost source of feed and nutrient supplementation that can increase animal productivity. Early weaning of lambs is another way to increase milk production and economic returns. Improved rams can be distributed to producers to improve flock performance. Lamb fattening, dairy processing into high-value commodities and targeting of niche markets with specific products can help increase earnings from small ruminant enterprises.

Policy options
At the national level, policy action is needed on measures that stimulate the adoption of productivity-enhancing practices and measures that increase investment in the vast rangelands on which many livestock producers rely. Policies that encourage organized communities to collectively manage their grazing areas could have a positive impact. Policy actions are also needed from exporting countries to assure importing countries that livestock production meets the required standards with minimum risks to human health. At the regional level, common polices and coordinated efforts on animal health-related regulations and common livestock trade rules are essential to improve trade and producers' income. Many of the small ruminant producers who live in the marginal dry areas have no or little landholdings, which makes them ineligible for credit from formal sources. Informal credit from traders is often the only source of capital with very high interest rates. New institutional reforms, such as community-based micro-credit that improve the access to capital, should be investigated.

Conclusions
Increasing population, urbanization and incomes in WANA are leading to a growth in demand for animal products, which opens opportunities for poor farmers in domestic and export markets. However, these farmers face the challenge of producing for a competitive market. There is a need to focus on improving production and marketing infrastructure to enable small livestock producers retain a reasonable share of the market.
Dr Aden Aw-Hassan (a.aw-hassan@cgiar.org) is an Agricultural Economist; Mr Farouk Shomo is a Research Associate (Economics); and Dr Luis Iniguez is a Senior Small-Ruminant Scientist at ICARDA.





ICARDA's Research on Small Ruminant Production in the Dry Areas
ICARDA is conducting research aimed at improving the productivity of small ruminant production systems in Central and West Asia and North Africa to increase the incomes of farmers using a market-oriented and natural resource management approach.

Research areas
•
Constraint analysis and characterization of production systems
•
Characterization of markets and market opportunities for small ruminant products
•
Processing of primary products
•
Assessment of options to improve product quality
•
Use of technologies to improve small ruminant productivity. Currently, attention is given to biological and economic feasibility of:
•
 Enhancement of the feed base by identifying and utilizing promising forages
•
 Strategies to improve small ruminant feeding systems (i.e. use of by-products and shrubs to cope with forage shortages)
•
 Management strategies to better target market opportunities (i.e. breeding out of season for production systems with availability of feed resources, to produce milk and lambs in periods favored by higher demand and prices)

Complementary activities
ICARDA looks for strategic alliances with advanced research institutions through specific project development and the hosting of exchange researchers as well as post-graduate study programs. Areas of research include:
•
Work on shrubs and by-product utilization to enhance the feed base
•
Mineral deficiencies in dry areas
•
Identification of main causes and improvement of low fertility rates in sheep and goats
•
Adaptation of traits to improve productivity
•
 Quality of products
•
 Modeling of small ruminant production incorporating range and crop-livestock interactions
•
 Small ruminant epidemiology and biological control to reduce parasite loads
•
 Inbreeding levels in non-registered and non-recorded flocks/herds

Facilities
ICARDA has modern research facilities which include laboratories for animal nutrition and health analysis, a milk processing plant to transform milk into derivatives, and a flock of about 400 Awassi sheep and a herd of 70 Shami (or Damascus) goats for specific on-station studies.
 
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