III. The Changing Global Technological Context for Poultry and Pork Production

The Livestock Revolution in developing countries, as shown above, was primarily manifested in the rapid expansion of poultry and pork, increasingly produced using concentrate feeds in larger scale operations. This response to the demand surge for animal protein did not occur in a vacuum, but was importantly channeled and promoted by global productivity change for poultry, and later for pork production. Understanding these processes is critical to understanding the impact of globalization of the livestock sector on social, health and environmental outcome sin developing countries.

Unnevehr et al., (1987) and Narrod and Pray (2001) suggest that technology change and transfer of technology through improved production inputs were a major factors affecting both the productivity of specific animal production enterprises and the overall structure of the global livestock industry. Growth in productivity was more rapid for those countries that had implemented policies that promoted the transfer of such inputs. Table 3 above shows that growth in livestock production in both developed and developing countries has been led by poultry. In significant part this is associated with higher rates of productivity growth for poultry than other meats. More recently, pork production has begun to follow a similar patterns.

Table 10 shows two partial productivity measures for livestock and poultry since 1955 in US. Growth in animal yield between 1955 and 1995 was greatest for diary and showed steady improvement for all major animal commodities except beef.^[6] New technology has also facilitated the substitution of capital for labor to increase output per unit of labor. Milk output per unit of labor increased more than 12-fold and poultry output per unit of labor 11-fold between 1955 and 1985. Worldwide, it was advances in livestock breeding, animal health products, animal feeding, housing and equipment, and management have made it possible to speedup the growing an finishing phases by using large confined animal production systems which greatly increase animal densities and population helped to significantly raise animal yields for most commodities (Fuglie et al. 2000). Though not shown in the table, similar changes in productivity through the globalization of improved livestock inputs (genetics, animal health drugs, feed, and production and processing equipment) as demand worldwide grew.

3.1. Major Areas of Technological Change in the Global Livestock Industry

In developing countries changes in the livestock sector meat production technology and marketing and changes in feed ingredients are key structural changes necessary for the livestock sector to grow. Nelson et al. (1986) suggest that in poultry there is a strong relationship between the rate of adoption of new technology and the growth in production in Asia between the early 1970s and the early 1980s. In their comparison of poultry production for a group of Asian countries they argued that the highest growth rates during that period occurred in Hong Kong, Thailand, Taiwan, South Korea, and Singapore where the shift from traditional to new technology was rapid while the lowest growth rates were in Japan, Malaysia, and the Philippines (see Table 10).^[7] Similar technological changes occurred for the swine industry in the same countries but in the late 1980s and early 1990s.

3.1.1 Breeding

One of the most significant technological advances that has taken place in the livestock industry was the use of hybridization and artificial insemination for breeding.^[8] These technologies can significantly speed up the process of genetic improvement, reduce the risk of disease transmission, and greatly expand the number of animals that can be bred from a superior parent (Fuglie, et al., 2000). These processes were appealing to the livestock industry which was looking for a way to produce uniform animal with uniform characteristics. Further basic studies on animal genome mapping, molecular biology, physiology, biological efficiency, and applied farm record-keeping systems all added in livestock breed improvement (Narrod and Fuglie, 2000). These technological advances often were not realized to the same extent in developing countries for all commodities. For instance the breeding improvements seen in poultry was highly successful in industrial operations in many developing countries who were also raising birds in enclosed environments, however the gains were less for swine and dairy and small and medium scale poultry producers (Unnevehr and Nelson, 1986).

3.1.2 Feed

As improved breeds used today have been bred for maximum efficiency over a shorter production period with lower feed conversions, the correct amount of micro-nutrients present in their diet is crucial. The use of linear programming for determining the least-cost formulation of feed based on current market prices and small changes in relative prices can cause significant changes in demand for available feed ingredients was a major technological change for the feed industry. The application of the programming techniques for feed formulation paralleled the introduction of intensive systems of animal production in many countries.^[9]

3.1.3 Animal Health

Animal health products are the third most important class of inputs into livestock production. This is a reflection of the problems associated with the intensification of the industry; because when animals are kept under confined conditions there is much higher incidence of infection (Schmit, 1987). In these unnaturally dense concentrations, livestock come into closer contact with each other and their feces, and are more vulnerable to infection. To reduce disease problems in confined systems growers started to segregate and raise animals of different ages apart in ‘all-in, all-out’ systems. Low levels of antibiotics were also used as a preventive mechanism for some of the more common diseases in poultry and swine. However the more recent feed bans in regions such as the EU of all antibiotic growth promoters with the exception of avilamycin and bambermycin has resulted in the replacement of many long standing products such as virginiamycin and zinc bacitracin for those countries involved in exports to the EU. The major goal now for the livestock industry is how to maintain productivity without relying on antibiotic growth promoters.

3.2. Global Technology Transfer for Poultry and Pigs

Closely related to the generation of new technology is the issue of technology transfer. The transfer may occur in a multitude of ways: through patents, the flow of technological information, educational programs, the movement of equipment, the export of productive processes, or the distribution of products. A major benefit of technology transfer is that a firm/person desiring a technology need only invest minimally or not invest at all in its own research and development in order to obtain the benefits of technology, especially if the countries involved have similar environments. Conditions that may encourage transfer of technology are: similar physical and institutional environments, adaptive research, and the absence of market distortions that may make the new technology seem unprofitable. Advances in communication and transportation have enabled technology and scientific knowledge to move across national borders more rapidly than in the past.

This ease of transfer has in part created an environment where innovating companies may find it more difficult to appropriate the returns to their research overseas due to lack of universal legal controls. The increasing cost of new product development, non-tariff trade barriers, and the desire to import certain strategic technologies has thus led to some companies increasing the amount of their overseas collaboration. For instance, a multinational company might train operatives and managers (technical assistants) who communicate various types of non-specific information to local users of a technology. These technical assistants may have the capabilities to engineer technologies that can be adapted to the availability of local resources and inputs into production, or to help the users of their products to use them more effectively and help suppliers upgrade their technology.

Most studies on technology transfer in agriculture have emphasised the environmental sensitivity of biological technologies.^[10] The environmental sensitivity of technology implies the need for countries to adapt technologies developed elsewhere to local conditions and thereby facilitate the indirect transfer of the technology to meet their specific country needs. One of the technologies associated with the Livestock Revolution consists of hybrid animals imported initially from the United States (US) or Europe, raised in containment facilities, and fed a compound feed containing feed additives and vaccines. This technology package appears to transfer relatively easily around the world and any adaptive technology that is needed can be profitably developed by the private sector. Table 12 shows the private-sector poultry breeding programs, where the franchises are located, and number of sales from multinational breeding companies and local companies. There are 14 breeding research programs most of which are only located in North America and Europe, while franchises are located through out the world. These franchises provide technical assistance to the users of their stock acting in essence as extension officers. Very little improved genetic stock from the multinationals goes to Africa and the Middle East (which also has the lowest productivity). Improved genetic stock developed elsewhere may not be suitable for all climates and scales of operations (e.g. backyard producers not raising animals in an enclosed environment or have access to other improved inputs such as feed and animal health products).

It has been suggested that the expansion of commercial livestock production which relied on the importation of massive numbers of improved breeds from various international companies, also resulted in a wide dissemination of new disease agents into many countries and breeds that may not be resistant to local diseases.^[11] Veterinary pharmaceuticals and medicated feeds are widely used to help control the incidence and spread of animal disease in these systems. Table 13 shows that the global market for animal health products were estimated to be $14,3750 million in 1995. The manufactures of these products are divisions of large international pharmaceutical companies who sell their products world-wide and market their products directly through veterinarians, veterinary wholesalers, or directly to large livestock operation that employ their own veterinarians. As indicated in columns 2 and 5 of Table 13, veterinary pharmaceutical represented slightly under one-half of this markets, and nutritional feed additives accounted for around one-third. By commodity, cattle represented the largest market for animal health products, especially for pharmaceuticals and nutritional feed additives. Poultry had the most sales in feed additives, but the sales of poultry pharmaceuticals were relatively small. Pharmaceuticals are more important for cattle and household pets because the animals live longer and rely more heavily on curatives than on the preventives properties in feed that poultry rely on.

For countries to benefit from research conducted elsewhere, their farmers need access to modern inputs. In the livestock industry trade policies, regulations, and government investment have historically influenced livestock production by interfering with trade of inputs. These can loosely be grouped into the following sets of government policies (a) science and technology such as the public funding of research, intellectual property rights, and the government supply of modern inputs and veterinary service; (b) price, trade and industrial such as protection of infant industries export led growth strategies, anti-trust legislation, controls on foreign direct investment, controls on animal health and food safety, and price supports on livestock meat or on inputs into production; and c) environmental such as licensing policies which restrict locations where certain amounts of pollution may be discharged, clean water and air legislation, regulation on disposal of animal by-products, and improvements of markets for animal by-products (Narrod and Pray, 2001). These policies may affect the development of a country's agricultural industry by stifling technological progress and limiting farmers' access to modern inputs. Many countries are now in the process of trying to increase domestic agricultural production by promoting policies that encourage the open trade of modern inputs and the transfer of technology from multinational companies.

Over the years the public and private sector roles in improving livestock productivity have changed. In general with regard to livestock the public sector been the source of most of the basic research (original investigation but no commercial application), while the private sector focused on market oriented applied research and development (Fuglie et al., 2000). See Table 14 for a description of specific roles. The private sector has been involved mainly in production and research that would improve their competitive edge. The public sector has also historically played the role of delivering extension and regulating the industry particularly in regard to animal health and food safety. The public sector would monitor disease outbreaks and provide diagnostic services for animal disease. The public sector also would monitor food safety in slaughter houses.