ILRI report quantifies demand for improved quality and safety of livestock products among urban Bangladeshi consumers

Demand for animal products has been increasing rapidly in Bangladesh due to urbanization and increases in per capita income.

There are rudimentary indications that demand for improved food quality and safety has also been increasing and that consumers were willing to pay higher prices for such attributes of products.

However, there is little empirical evidence on the criteria and indicators of quality and safety that consumers use in their buying decisions, or that suppliers use in differentiating products to promote sales, or the extent to which consumers are willing to pay for such attributes.

This study is the first attempt to comprehensively characterize and quantify Bangladeshi urban demand for animal products with a focus on quality and safety.

Based on a multi-stage sample survey of 900 households from Dhaka and Mymensingh cities, successive analyses present statements of preference based on ratings, identified quality criteria, stated sources of supply and recent purchasing behaviour both at home and away from home, and econometric analysis of relationships between price ratings and quality ratings across attributes, so as to generate willingness to pay for those attributes.

The findings show that officially defined grades and quality standards of livestock products are either absent or poorly defined and enforced.

On the other hand, producers and consumers in the market use specific attributes or criteria and indicators to differentiate quality and safety of livestock products and they also charge and pay different prices based on those attributes.

Although targeted at urban populations, considerable variation between locations in terms of the product preferences and attributes used to differentiate quality was identified.

Establishment of standards and grades will become necessary to meet consumer demand on the one hand and facilitate producers and market agents to respond to consumer demand on the other.

Whether smallholders will have any comparative advantage in supplying an expanding market requiring more homogenous and better quality and safer products need to be studied regularly along with studies on consumer demand because of the dynamic nature of the emerging and evolving market, the industry and the sector.

Access the report here.

Citation
Islam SMF and Jabbar MA. 2010. Consumer preferences and demand for livestock products in urban Bangladesh. ILRI Research Report No. 23. ILRI (International Livestock Research Institute), Nairobi, Kenya.

ILRI research report features case studies on consumer demand for livestock products in Africa and Asia

Rising developing country demand for livestock products propelled by income and population growth, and by urbanization offers poverty reduction opportunities to actors in the supply chain.

The increase in volumes demanded also features diversification and increased demand for quality attributes. Reliable food safety and information on animal husbandry and geographic origin have long been recognized as value-adding differentiation mechanisms in the developed world.

Anecdotal accounts suggest that this is also the case in developing countries.

However, little consistent rigorously researched evidence has been published on this subject.

This report presents results based on case studies conducted in a number of developing countries in Asia and Africa: Bangladesh, Cambodia, Ethiopia, India, Kenya, Tunisia, and Vietnam.

An overview of the theoretically consistent methods used and a synthesis of the results obtained in the various case studies are presented first followed by the case studies each describing a study of specific commodities in specific developing country locations.

A consistent set of results emerges, wherein consumers exhibit willingness to pay for quality and safety in animal-origin foods, and within which this willingness to pay is strongest amongst the wealthy and the urban dwellers.

However, the intricacy and variety of quality definition and measurement are demonstrated fully, as they occur between and within countries, commodity groups and other settings.

The key message from the results is the evidence that quality and safety considerations in products of animal origin food provide commercial opportunities for developing country producers, market actors and industry participants.

Access the report here.

Citation
Jabbar MA, Baker D and Fadiga ML. (eds). 2010. Demand for livestock products in developing countries with a focus on quality and safety attributes: Evidence from Asia and Africa. ILRI Research Report No. 24. ILRI (International Livestock Research Institute), Nairobi, Kenya.

Informal contract arrangements are an economic boost for Vietnam’s small-scale pig farmers

Farmer Ma Thi Puong feeds her pigs on her farm near the northern town of Meo Vac, Viet Nam. (Photo credit: ILRI/Mann)

The rapid growth in demand for pork in Vietnam presents an opportunity for rural pig-keeping households to improve their incomes. This project on contract farming for equitable market-oriented smallholder swine production in northern Vietnam sought to characterize the ‘true’ costs and benefits of contract farming of swine in northern Vietnam.

The ultimate objective was to understand the barriers to participation of smallholders in contract farming and other market arrangements and to identify a set of policy and intervention options that would facilitate profitable market-oriented livestock farming partnerships.

The project was carried out in four provinces of northern Vietnam that supply slaughter pigs to the Hanoi market: Bac Giang, Ha Tay, Thai Binh and Thanh Hoa. Selected case studies assessed a variety of institutional arrangements and provided information on marketing arrangements for pigs and pig products under different institutional forms, and on contractor strategies for targeting and selecting producers in Northern Vietnam.

Below are a few key highlights of the project findings.

Scale of production is a barrier to smallholder participation
Smallholder farmers keeping only a few pigs tended to be locked out of participating in formal contract arrangements primarily because contractors preferred to engage farmers with more than 50 sows and large-scale farms that generated outputs of more than 5 tonnes live weight per year.

Informal contract arrangements benefit smallholders
Informal contracts with co-operative societies can help small-scale farmers generate better returns in short-duration pig production systems such as production of crossbreeds under farrow-to-wean and grow-to-finish systems. However, for longer production cycles (farrow-to-finish), independent producers had higher returns to labour. The benefits of contract farming arrangements included lower transaction costs, protection from production and market risks, and access to quality inputs, services, financing, information and markets for outputs.

Informal contract arrangements are effective
Based on the comparison of returns to labour between farmers with and without contracts, informal contract arrangements were effective in facilitating economic returns from pig production by providing farmers with a number of benefits and services such as price discounts, technical assistance, market information, delivery of inputs to farm and collection of outputs from farm.

The project was supported by the Food and Agriculture Organization Pro-Poor Livestock Policy Initiative (FAO-PPLPI) and administered by the Market Opportunities theme of the International Livestock Research Institute (ILRI) in collaboration with staff from Hanoi Agricultural University and the International Food Policy Research Institute (IFPRI).

For more information, please contact Dr Lucy Lapar of ILRI (l.lapar [at] cgiar.org).

In the news: Director of ILRI's market opportunities theme interviewed on Vietnam agriculture TV channel

Agricultural economist and director of the Market Opportunities Theme at the International Livestock Research Institute (ILRI), Dr Steve Staal, was interviewed on the Weekend Agro-Products Market programme on VTC-16, Vietnam’s Agriculture and Rural Development television channel.

Dr Staal was speaking during a workshop for an ILRI-led project aimed at improving the competitiveness of pig producers in an adjusting Vietnam market. The workshop was held on 5 October 2010 at the Melia Hotel, Hanoi, Vietnam to mark the end of the project and to present research findings to stakeholders.

He highlighted the key findings of the project, noting that smallholder pig producers in Vietnam are indeed competitive and are likely to remain so, especially in light of projected future increases in consumer demand for fresh pork.

The three-year project (2007-2010) was sponsored by the Australian Centre for International Agricultural Research (ACIAR). The project collaborators were the Centre for Agricultural Policy - Institute of Policy and Strategy for Agricultural and Rural Development (CAP-IPSARD), the International Food Policy Research Institute (IFPRI), Oxfam Hong Kong and the University of Queensland.

More information is available on the project website http://www.vietpigs.com.vn/

Pro-poor dairy development: Lessons learned from South Asia and East Africa shared at Ethiopia national dairy forum

Capacity building, research, value chain development, and policy and institutional interventions were among several issues discussed at a national dairy forum that was organized to deliberate on pragmatic approaches towards enhancing dairy development in Ethiopia.

The forum which was held on 23-24 November 2010 at Ghion Hotel in Addis Ababa, Ethiopia brought together key dairy stakeholders from Ethiopia and the eastern Africa region to share experiences and lessons learned in the development of pro-poor dairy policy. Participants also explored the key challenges, opportunities and interventions in the development of smallholder dairy.

Among the several presentations given at the forum was one by agricultural economist and director of ILRI's Market Opportunities Theme, Dr Steve Staal, that compared pro-poor dairy policy development in South Asia and East Africa and highlighted key lessons with regard to the role of traditional markets, technology and dairy co-operatives.

A comparison of dairy policy and development in South Asia and East Africa: lessons for a pro-poor dairy policy agenda

View more presentations from ILRI CGIAR.

Citation
Staal SJ. 2010. A comparison of dairy policy and development in South Asia and East Africa: Lessons for a pro-poor dairy policy agenda. Presentation at a National Dairy Forum, Addis Ababa, Ethiopia, 23-24 November 2010.