Africa Offers Opportunities for Livestock and Meat Investment02 July 2013
Increases in the demand for animal-sourced food are estimated extraordinarily high in Africa over the coming decades, according to a new report from the Food and Agriculture Organisation of the United Nations, writes Chris Harris.
By 2050, the meat market is projected at 34.8 million tonnes and that of milk about 82.6 million tonnes, an increase of 145 and 155 per cent respectively over 2005/07 levels.
Over this period, Africa’s increase in volume of meat consumed will be on a par with that of the developed world and that of Latin America, with only South Asia and Southeast Asia anticipated to register higher growth.
For milk, only South Asia will register stronger gains in market size than Africa.
The annual growth rates in both meat and milk consumption are projected to be higher in Africa than in other regions, with the exception of meat in South Asia starting from a very low base.
African meat and milk markets represent a major business opportunity for livestock producers, not so much for the volume of animal-sourced foods consumed in the continent as for the projected market growth, in terms of both volume and value.
From this perspective, opportunities for investment in African markets for animal-sourced foods are likely to be more attractive than those of world’s other regions.
Business opportunities for livestock producers will vary by product and geographic region, according to the report.
Over the period 2005/07-2050, milk, beef and poultry will be the dominant livestock growth markets in Africa, with beef and milk presenting by far the largest business opportunities in value terms, followed by poultry and mutton.
However, market dynamics differ amongst the geographic hubs, including Western and Southern Africa, Northern and Southern Africa, and Central Africa.
Production will not keep pace with consumption so Africa is anticipated to increasingly become a net importer of animal-sourced foods.
This represents a missed development opportunity, given the widespread societal benefits that inclusive growth of livestock can generate, particularly in a continent where the majority of rural dwellers depend fully or partly on livestock for their livelihoods, the report says.
Eastern and, to some extent, Northern Africa dominate the milk market. Western, Eastern and Southern Africa constitute the largest share of the beef market. Southern and Northern Africa are major markets for poultry products. Central Africa, which is and will remain the smallest livestock market in Africa, is anticipated to record the highest consumption growth rates for most livestock products, albeit starting from a very low base.
African producers in all regions, with some exceptions in Eastern Africa, will find it difficult to satisfy the growing demand for animal-sourced foods, with imports in volume anticipated to steadily increase in the coming decades throughout the continent.
This represents a missed development opportunity, given the widespread societal benefits that an inclusive growth of livestock can generate, particularly in a continent where between 40 and 80 per cent of rural dwellers are estimated to depend partly or fully on livestock for their livelihoods according to the Food and Agriculture Organisation of the United Nations.
Exploitation of this opportunity requires investments, and policy and institutional reforms that target African livestock markets.
This requires an understanding of ‘typologies’ of producers able to tap into those market opportunities as well as of farm-to-table business models that are sustainable and create employment, which represent a major livestock’s pathway out of poverty.
The report says that as suggested by Ly et al. (2010) and Nouala et al. (2011), decision makers need to pursue a dual-track approach to livestock development.
On the one hand, market-oriented or potentially market-oriented producers should be supported, as increasing livestock production and productivity of emerging farmers will generate spillover benefits to employment and consumption.
On the other hand, poor or relatively poor livestock keepers should be supported to make full use of their livestock assets, which is an effective way to sustain their livelihoods in the short to medium term while utilising resources with few alternative uses.
Consequently, investments, and policy and institutional reforms that target African livestock markets are required to ensure that the business opportunities generated by the growing demand for animal-sourced foods translate into widespread benefits for the population.
Formulating effective livestock sector policies and institutional changes require a flow of information on market conditions and on the constraints to market entry.
These are rarely readily available and investments in data collection and in data collection systems should be given appropriate priority, as the basis for supportive policies and investment, the FSAO report recommends.