Distribution of farmers by dead animal disposal methods, broiler production, 2003 (percent) 6.8 Distribution of farmers by dead animal disposal methods, egg production, 2003 (percent) 6.9 Distribution of farmers by dead animal disposal methods, swine production, 2003 (percent) 6.10 Environmental expenditures per kilogram output of liveweight broiler or eggs from poultry production, 2003 6.11 Environmental expenditures per kilogram output from swine production, 2003 6.12 Environmental expenditures per unit output from milk production, 2003 6.13 Determinants of farm expenditure on mitigation of environmental externalities from swine production, Thailand, 2002-03 6.14 Determinants of farm expenditure on mitigation of environmental externalities from broiler production, Thailand, 2003 6.15 Determinants of farm expenditure on mitigation of environmental externalities from broiler production, Philippines, 2002-03 6.16 Determinants of farm expenditure on mitigation of environmental externalities from swine production, Philippines, 2002-03 7.1 Mean relative profit efficiency of broiler farms across farm sizes by country, 2002 7.2 Mean relative profit efficiency of layer farms across farm sizes by country, 2002 7.3 Mean relative profit efficiency of swine farms across farm sizes by country, 2002 7.4 Mean relative profit efficiency of dairy farms across farm sizes by country, 2002 7.5 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Philippine broiler farms 7.6 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Thai broiler farms 7.7 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Indian broiler farms 7.8 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Brazilian layer farms 7.9 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Indian layer farms 7.10 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Philippine swine farms tables v 7.11 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Brazilian swine farms 7.12 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Indian dairy farms 7.13 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Thai dairy farms 7.14 Parameter estimates of stochastic profit frontier and determinants of profit inefficiency on Brazilian dairy farms 7.15 Summary of empirical results vi tables summary xi xii summary 3 Monogastrics are animals with one stomach compartment; examples are pigs and poultry. settled export-certified zone spend more per unit than smaller farms, and dairy farmers in Thailand, where the larger-scale farmers have more crop land per animal than do the smallerscale farmers in the sample. Results are backed up by a second, more conventional procedure that estimates mass balances of nutrients per hectar...

The rapid growth in consumer demand for livestock offers an opportunity to reduce poverty among smallholder livestock farmers in the developing world. These farmers' opportunity may be threatened, however, by competition from larger-scale farms. This report assesses the potential threat, examining various forms of livestock production in Brazil, India, the Philippines, and Thailand. Findings show that the competitiveness of smallholder farms depends on the opportunity cost of family labor and farmers' ability to overcome barriers to the acquisition of production- and market-related information and assets. Pro-poor livestock development depends, therefore, on the strengthening of institutions that will help smallholders overcome the disproportionately high transaction costs in securing quality inputs and obtaining market recognition for quality outputs. These and other findings make this report a useful guide for researchers and others concerned with the opportunities and risks of smallholder livestock farming.Research reportPRIFPRI1; GRP27MTI

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Foreword R esearch has shown that gainful participation in livestock markets is an important means of reducing poverty in developing countries, particularly for rural and periurban households. The rapid growth in demand for meat and milk, along with the corresponding expansion of livestock markets to connect consumers and suppliers, presents real opportunities for smallholders to generate income by raising livestock. Nevertheless, the structural changes associated with increasing urbanization taking place in these markets, the greater integration between domestic and global markets, and the emergence of a more stringent regulatory environment also present significant threats to participation by poor households. Further, as the market for livestock products rapidly grows, smallholders have to compete with large-scale commercial producers for market share, particularly at the domestic level, and if market forces and policy environments are biased toward larger-scale producers, smallholders are often displaced. IFPRI has identified research on the future of smallholder farming as a priority for improving our understanding of the relationship between livestock sector development and poverty reduction, thereby enhancing opportunities for smallholders, and countering threats. To this end, this study begins by examining the market forces, structural factors, and policies that affect the scale of pig production, and then goes on to identify strategies for enhancing smallholder participation and competitiveness in a rapidly growing livestock market. The study offers a new way of conceptualizing the problems that lead to the exclusion of smallholders from live hog and pork markets, explaining why some smallholders participate successfully, while others do not. Determinants are identified using limited-dependent variable models based on the hypothesis that transaction costs, such as access to credit and market information, affect market participation. The report also presents a contemporary approach to measuring profit efficiency in hog production for the case of Southern Luzon, Philippines. Although the findings of this study are specific to the Philippine context, many of the issues confronted are common to the challenges of participation, upscaling processes, and policy interventions across the developing world. The research has generated solid empirical perspectives of the changing situation of poor smallholder producers in a high-value market situation. IFPRI thus continues to examine the effect of mechanisms like contract farming on collective action as a means of increasing smallholder participation in high-value markets, particularly in developing countries in Asia and Africa, where small farms continue to dominate the landscape. Joachim von Braun Director General, IFPRI viii Acknowledgments T his study would not have been possible without the kindness of individuals in the field who assisted the authors in the preparation and undertaking of the field survey of smallholder and commercial hog producers, of colleagues...