FAO Regional Office, 39 Phra Atit Road, Bangkok, 10200, Thailand.
The major aim of livestock rearing is the utilisation of livestock products for human food. The animal food chain has two components, the production of livestock and the production, processing and marketing of livestock products. A functioning processing and marketing component is essential in view of the perishable nature of livestock products. Area-Wide Integration (AWI) can, on the marketing and supply side, make an impact to the dietary improvements of consumers by providing high quality and moderately priced animal protein products. A well-developed postharvest food chain can also contribute to additional employment and income.
There will be a steep increase in demand for livestock products worldwide, especially in developing countries. It has been calculated that the global demand for all animal proteins will triple in the next thirty years. This is on the basis that the world's human population will grow from 6 to 9 billion by that time. Structural changes in the livestock sector are therefore urgently needed.
The purpose of this paper is to analyse possibilities and limitations of supply and marketing of livestock products under AWI approach. The focus will be on the Asian region that has the highest growth rates in production and consumption of livestock products in the world.
The AWI approach requires reorganisation and, to some extent, relocation of livestock producing and processing enterprises and facilities. It appears that livestock processing facilities may be the least mobile components in the system as they depend on the existing infrastructure of transport and marketing channels and on the location of consumption centres which are largely urban-based. Therefore, in the short-term, the most likely development will be that processing facilities which are predominantly located in the urban or peri-urban regions will remain and expand their capacity there, and new processing plants may be established in the same area, if needed.
This prediction is made on the basis that, at this stage, transport systems for perishable food products over long distances are problematic in most developing countries. Unless the problems are resolved, the following general guidelines will remain:
In the foreseeable future, meat and dairy processing facilities with higher capacities will, for reasons of a smooth supply, remain near the consumption centres. Hence, the AWI approach with relocation of livestock to rural production areas will bring about higher transport costs, which eventually will be charged to the final products.
The projection of future marketing and supply systems for eggs, milk and meat is made on the understanding that, in most developing countries, the infrastructure of marketing and supply channels will remain inadequate in the years to come in terms of hygiene, cold chain, transport facilities, etc.
The supply and marketing of eggs is the least complicated of the marketing systems for animal products and is, therefore, probably the best suited for the AWI approach. In Asian countries, the tendency is towards industrial production. Half of the world's output of eggs is produced in Asia with China accounting for 40% of the world production. Most of the egg-producing units are located in the peri-urban areas for easy access to markets.
Even in the case of relocation of egg-producing enterprises to rural areas, the marketing and supply of eggs remains unproblematic, provided faecal and other microbiological contamination of the shells can be controlled and the eggs are derived from healthy hens.
It is certainly preferable to keep eggs under a cold chain. In the absence of a cold chain, eggs can sustain prolonged marketing and supply periods of several days, even under high ambient temperatures. In developing countries, eggs are usually marketed without refrigeration during short-term storage. For longer-term storage, thermal pasteurisation of the egg shell which substantially reduce Salmonella and other bacteria, appears promising.
The relatively uncomplicated handling of eggs will boost egg production and trade, and AWI can effectively assist in this development.
Milk production and consumption in Asia are not as high as meat because the consumers are not used to milk and milk products. However, the scenario is changing through nation-wide promotions and school campaigns, as in the case of Thailand where demand for milk increased at an annual rate of 30%. The increase in demand of milk requires a concomitant increase in dairy cows and this will need relocation of the farms to rural areas. A major problem which may arise in terms of supply, when relocating the dairy cows, is the longer transport distance of the milk because most of the dairy processing plants are located in the cities. The farmers must also use milk-cooling tanks from the dairy companies for collection of milk. All these will inevitably increase supply cost.
However, the relocation of dairy cows will be beneficial from the production point of view. Farmers in the rural areas have the possibility of keeping a higher number of dairy cows compared with peri-urban or urban farms. They are also in a position to grow their own feed, which is not possible in the urban settings. However, relocation and longer transport distances will be associated with increased hygiene problems, food losses and increased costs to the farmers. Two alternatives can be considered as possible solutions:
Meat is the highest valued livestock product and the demand for it is rapidly increasing in Asia because of population growth and an increase in purchasing power, especially in urban centres. Large numbers of meat animals are raised in the peri-urban areas and this causes environmental problems, both during their production and during slaughter and processing. The additional problems are feed supply and land occupancy.
The high demand for poultry will continue, as meat from chicken/ turkey or duck is desirable to many consumers and there are no socio-religious restrictions. Poultry are best suited for industrial production, but the proximity to urban centres will certainly have implications on the environment. However, compared to pig producing units, the specialised poultry or egg-producing units cause much less environmental problems.
The limiting factor in poultry marketing and supply is that poultry meat is easily spoilt if not kept under refrigeration. In the absence of a cold chain, the traditional marketing method for poultry meat is to transport the live birds to the markets and slaughter them for the customers there. Many Asian consumers prefer the live bird marketing to industrially produced chicken meat, in particular when it is frozen. However, industrially produced chicken offered as chilled meat (not frozen) may have a higher acceptance, but the marketing of such products is hampered by the lack of a cold chain. Because of this, the idea of relocating poultry meat producing units away from the consumption centres will be difficult to realise at the present time. Nevertheless, in some countries, the marketing of pre-packed chilled broiler carcasses or broiler parts, such as breast, drumstick or wing, in an uninterrupted cold chain from the slaughterhouse to the supermarket, is emerging. However, this is only a small segment of the market and the products are highly-priced.
The tremendous growth in pork production in Asia is primarily caused by China's increasing demand. Most of the existing pig producing units does not comply with AWI principles. In contrast, production of meat from ruminants i.e. cattle, buffaloes, sheep and goats usually kept in a pastoral system in rural areas, complies with the criteria of AWI. Intensive production of cattle in feedlots is not widely practised, with the exception of some feedlots around big cities in China (Beijing, Shanghai), Korea, Malaysia and Indonesia. The need for relocation of beef cattle is, therefore, low in Asian countries.
While the existing bovine and pig production systems are different in the AWI approach, the processing and marketing of beef and pork have many similarities and will be discussed jointly.
As far as abattoirs are concerned, their ideal location in the AWI concept should be close to the livestock production units for meat quality and disease control reasons. However, the existing meat market preference for "hot", unchilled meat in Asian countries makes it necessary that abattoirs be located near the consumption centres. Most of those existing urban or peri-urban abattoirs lack functioning waste treatment facilities, thus causing tremendous pollution of water and soil around such premises. Many abattoirs are situated, nowadays, in residential areas as the cities grew around them. Unfortunately, there is very little progress in urban abattoir development as municipality investments, maintenance and repair are very poor. As a result, environmental and hygienic problems escalate. The most undesirable scenario would be that AWI progresses well in the livestock production sector (which may be the private sector), in particular relocation of environmentally damaging peri-urban farm operations, but nothing happens in the abattoir sector (which may remain public sector). Relocation of abattoirs away from the residential areas and construction of suitable premises with enough slaughter and waste treatment capacity becomes an urgent need in most developing countries. This task may have to be undertaken independent of AWI.
However, in view of the present common meat marketing practices and the existing gaps in infrastructure in most developing regions, it would be a mistake to plan new, high capacity abattoirs far away in rural areas for the supply of urban consumption centres. There are dozens of such abattoirs in developing regions around the world standing idle. They were built in the context of livestock development plans that were predecessors to AWI - and proved to be not operational under current practical conditions.
More than 90% of the meat in Asia is marketed "hot", i.e. without refrigeration. Pig and cattle are slaughtered during the night and their meat reaches wholesale and retail markets in the early mornings and in the consumers' kitchen also on the same day with minimal and acceptable levels of bacterial build-up. This form of "wet market" looks unhygienic at first glance but when done properly, it is an acceptable marketing system well adapted to poor infrastructure and for low-income customers. This method of meat distribution works only in the case of short transport distances and storage that require abattoirs to be near urban areas.
This traditional `hot' meat marketing system will continue because consumers prefer unchilled meat that is cheaper without refrigeration costs. Furthermore, the meat-marketing infrastructure will be expected to remain technically deficient, thereby allowing only traditional marketing systems to exist.
The only alternative to the traditional meat marketing system would be development of an uninterrupted cold chain. This may be necessary in the long-term, in view of the distribution channels getting increasingly longer, in particular in the megacities which are composed of several previously independent urban centres. This will also be the chance for new abattoirs and meat packing plants to develop in the framework of the AWI approach. However, it is a long way to go for the majority of developing regions to achieve this high standard of meat processing which is common in the developed countries. It would be detrimental, in particular under tropical conditions, if in the context of AWI developing regions with poor infrastructure would forcibly apply modern, but badly functioning methods which would result in poor meat quality. In this case, it may be better to retain the tradition system of `hot' meat marketing.
It has already been mentioned that the relocation of processing facilities for livestock products away from the consumption centres will be difficult to achieve in the short-term. Such decisions need the co-operation between the public and private sectors. Principally, the private sector activities in meat, dairy and egg production and marketing will be stimulating for the AWI approach. Private initiative based on the results of market research will create a variety of products, market outlets and jobs.
On the other hand, independent and efficient control organisations must become strongly involved, especially in the meat sector. Negative examples without these functioning mechanisms could be seen in some Asian countries that changed from centrally planned to market economy. Hundreds of filthy, small private slaughterhouses without any basic hygiene and waste treatment facilities were mushrooming and the authorities have still not managed to completely phase them out. Another example is that refrigerated transports will have to be strictly controlled, especially in the tropics. Products must have the necessary cooling temperature when loading the trucks, and temperatures must be maintained during transport, otherwise valuable food will be spoilt between production and consumption centres. The movement of animal products must also be strictly controlled in order to avoid the spread of animal diseases. Of great importance are functioning veterinary meat inspection services and hygienic control services for food. Supervisory government services will have to be strengthened in number and quality, and these require additional posts and training in the public sector.
It is expected that a significant number of new jobs can be created in the animal product processing sector (valued-added products sector). This may not affect so much the marginal rural population, as such processing facilities will always remain in or near the cities. Most of those jobs require basically educated and trained personnel. The job training, for example, for slaughtermen, meat deboning and meat cutting personnel, meat and diary processors, people involved in packaging and transport, can be provided by special employee-training staff in the premises. However, supervisors should be periodically trained in specialised courses, organised by industry associations, on new technical developments and new hygienic approaches, such as the HACCP concept.
Regional Workshop on Area-Wide Integration of Crop-Livestock Activities, 18-20 June, 1998, FAO Regional Office, Bangkok Thailand.
