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A Living from Livestock Pro-Poor Livestock Policy Initiative Outlook for Viet Nam’s Livestock Sector J. Otte, A. Costales, and D. Roland-Holst Hanoi, MARD, 23 March 2010
A Living from LivestockPro-Poor Livestock Policy Initiative
Outlook for Viet Nam’sLivestock Sector
J. Otte, A. Costales, and D. Roland-Holst
Hanoi, MARD, 23 March 2010
A Living from LivestockPro-Poor Livestock Policy Initiative
Production of main livestock products (mean 1993-95 and mean 2003-2005)
Growth in domestic
production has been
remarkable:
• Pork 120%
• Poultry 133%
• Beef 25%
• Milk 220%
over a decade!!!0
500
1,000
1,500
2,000
2,500
Pork Poultry Beef Milk
1993-1995
2003-2005
‘000 MT
A Living from LivestockPro-Poor Livestock Policy Initiative
-600
-500
-400
-300
-200
-100
0
100
200
2000 2001 2002 2003 2004 2005 2006 2007
Poultry Meat
Pigmeat
Ovine Meat
Milk
Viet Nam’s trade balance for main livestock products, 2000-2007
Yet trade balance in livestock products has deteriorated!!!
Million US$
A Living from LivestockPro-Poor Livestock Policy Initiative
Sources of growth in domestic demand for livestock products, 1995-2005
• Population growth: 16%• From 73.3M to 85.0M
• Per capita demand growth:• Milk = 180%
• Poultry meat = 104%
• Pork = 97%
• Beef = 16%
A Living from LivestockPro-Poor Livestock Policy Initiative
Per capita consumption of meats
0
5
10
15
20
25
30
Pork Poultry Beef
1995
2005
kg/capita (Viet Nam)
0
10
20
30
40
50
60
70
80
90
Viet Nam China D'ped
kg meat / capita
A Living from LivestockPro-Poor Livestock Policy Initiative
Viet Nam’s appetites continue to grow
• Where is the main
market for Viet Nam’s
livestock producers?
• Who are the
customers?
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2000
2005
2010
2015
2020
2025
Pork
Poultry
Beef
Income elasticities (Viet Nam)
A Living from LivestockPro-Poor Livestock Policy Initiative
Demand for pork and poultry
0
10
20
30
40
50
60
70
80
90
D'ped D'ping Asia &
Pacific
2006-08
2018
Million MT
0
10
20
30
40
50
60
70
80
90
D'ped D'ping Asia &
Pacific
2006-08
2018
Million MT
Pork Poultry
A Living from LivestockPro-Poor Livestock Policy Initiative
Asia-Pacific & China’s trade balances for pork and poultry
-4,000
-3,500
-3,000
-2,500
-2,000
-1,500
-1,000
-500
0
Pork Poultry
2006-08
2018
Thousand MT
-2,000
-1,500
-1,000
-500
0
500
Pork Poultry
2006-08
2018
Thousand MT
A Living from LivestockPro-Poor Livestock Policy Initiative
Consumer food preferences by income
7,000
4,0002,000
26,000
Live animals, wet marketsWet markets, cheap cold chain
Inexpensive, partially processedcold chain products
High value processed andconvenience cold chainproducts
Income & consumer preferencesAho, 2005
100
Annual per capita income in USD ppp
Proportion of population in agriculture (%)
ChinaIndia
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0 20 40 60 80
Indust
LAC
NENA
S.Asia
SE&E.Asia
SSA
Tran
1,000 Hardly any market participation
Average income by Quintile
A Living from LivestockPro-Poor Livestock Policy Initiative
Consumer concerns & preferences
0
1
2
3
4
5
Marketplace
conditions
Unknown
source
Disease risk Distrust
inspection
Ranking of Safety Concerns
0
1
2
3
4
5
Price Taste Disease risk Regular
Supply
Ranking of Chicken Attributes
A Living from LivestockPro-Poor Livestock Policy Initiative
Willingness to pay for local varieties
0
15
30
45
60
75
Local Chicken Crossbred
Chicken
Industrial
Chicken
Regular Price
High Price
Price by Chicken Type (VND in ‘000)
A Living from LivestockPro-Poor Livestock Policy Initiative
Willingness to pay for safety
52%69%74%93%Industrial
66%70%87%92%Cross
Bred
74%89%91%99%Local
12,500
VND
10,000
VND
5,700
VND
5,000
VND
TYPE
Approximately 10%of current price
A Living from LivestockPro-Poor Livestock Policy Initiative
FAO ‘Sectors 1 to 4’Share of producers Share of production
A Living from LivestockPro-Poor Livestock Policy Initiative
Conclusions
• Major growth potential in domestic market
• Prospects for creating significant exportable surplusrelatively small
• Smallholders are still very prominent, produce a highly valued product, and are resource efficient but have limited capacity to expand production volume
• Twin-track approach to livestock sector development:• support ‘industrial’ sector for volume & import substitution
• support ‘smallholder’ sector for value, resource use optimization, & rural development / poverty alleviation
A Living from LivestockPro-Poor Livestock Policy InitiativeAnimal Production and Health DivisionAnimal Production and Health DivisionAnimal Production and Health DivisionAnimal Production and Health Division
Livestock Sector Analysis, Information & Policy BranchLivestock Sector Analysis, Information & Policy BranchLivestock Sector Analysis, Information & Policy BranchLivestock Sector Analysis, Information & Policy Branch
