Smallholder poultry production in the context of increasing global food prices: roles in poverty reduction and food security

A global increase in food prices severely affects the real incomes and food and nutritional security of resource-poor rural and peri-urban households in the developing world. During a surge in food prices, smallholder poultry production plays a significant role in poverty reduction by improving resource-poor households’ income and enhancing household food security through nutrient-rich animal source foods (ASFs) consumption. Improving its production and productivity heightens resource-poor households’ resilience to the price shock. Transforming existing low-input low-output smallholder poultry production systems demands technological advances in genetics, feed supply, health services, housing, and public-private partnership to deliver integrated innovation packages. Global food price increases affect households’ livelihood in developed and developing economies. It impinges on the socio-economic and food and nutritional security of nations, households, and individuals within households. At the national level, the effect may include a change in the overall socio-economic and political conditions through its consequence on the trade balance and change in the commodity and labor markets. At the household and individual levels, it affects the income and expenditure of households and the nutrition, health, and education of individuals within households (Benson et al., 2008). The potential impact of increasing food prices on households’ welfare, mainly on poverty and food security, has been an interesting topic in the research and development community (Benson et al., 2008; Attanasio et al., 2013; Amolegbe et al., 2021). However, existing empirical evidence is mixed and usually debatable (Swinnen and Squicciarini, 2012). For instance, some researchers argue that increasing food prices reduces poverty (Headey, 2018). These researchers associate the effect of food price increases on increasing supply and wage responses, as most of the world’s poor livelihood is strongly associated with agriculture. Other researchers suggest that rising food prices would increase poverty, mainly in urban areas and among poor rural households, as most resource-poor households are usually net buyers of different food groups (Ivanic andMartin, 2008; Hoyos and Medvedev, 2011). For some researchers, increasing food prices have temporal effects. Accordingly, rising food prices increase poverty in the short run, as most poor households spend their budget on food. It reduces poverty in the long run by increasing smallholder producers’ wage rates and profits (Ivanic and Martin, 2014). Nevertheless, conclusions from most empirical findings rely on various assumptions, and generalizing most results to the heterogeneous global population seems highly unlikely. A change in food price is usually a signal of possible changes in households’ food security in the developing world (Kalkuhl et al., 2016). Food security has various dimensions related to availability (total supply), accessibility (affected by real income), utilization (daily dietary needs), and stability (temporal condition). An increasing food price may affect either of these dimensions, such as accessibility, by reducing the real income of households or their utilization. Like the poverty impacts, an increase in food price may have a mixed effect on households’ food security. Most researchers like Sophal (2011) examined its adverse effects, and others such as Amolegbe et al. (2021) documented both negative and positive impacts based on the origin of foods produced (imported vs. domestic). Despite mixed evidence on the welfare impact of an increase in food prices, most studies agree that resource-poor households are the primary victims of price increases, at least in the short run (Attanasio et al., 2013). An increasing food price may lead the poor to hunger as they are forced to buy a low basket of foods with their limited income. Existing studies show that an increasing food price can be a challenge and/or opportunity for smallholder farmers in developing countries (Hella et al., 2011). The effect may depend on households’ status in the food system and whether they are net food buyers or sellers. Usually, smallholder producers who sell most of their agricultural products can benefit more from the increase in price than net buyers. However, as indicated by Nakelsea et al. (2018), the status of households as net buyers or net sellers may not be a sufficient condition, and other factors can influence the overall effect. For instance, Benson et al. (2008) noted that increasing food prices could create a positive opportunity for farmers by persuading them to produce more if there are no input and output market access constraints. Studies on food price increases mainly focus on staple food crops such as maize, wheat, and rice; empirical evidence on livestock products, specifically poultry products, is very limited. Therefore, in this paper, we examined the potential role of smallholder poultry production in reducing poverty and enhancing food security among resource-poor households, mainly during food price increases. We used Rural Household Multiple Indicator Survey (RHoMIS) datasets that contain multiple indicators collected from 2015 to 2020 in 33 countries and the FAO databases (RHoMIS, 2021; FAO, 2022) to generate some empirical evidence. We used the data from 24 (Countries included are Burkina Faso, Burundi, Cambodia, Comoros, Cote d’ivoire, DRC, El Salvador, Ethiopia, Ghana, Honduras, Kenya, Lao PDR, Malawi, Mali, Nicaragua, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Tanzania, Uganda, Vietnam, and Zambia.) countries (31,484 households) by excluding 9 countries in the Arab States, South Asia, and countries categorized as upper middle-income countries. Countries in the RHoMIS datasets are the foundation for generating indicators from the FAO datasets. We generated data on regional-level smallholders’ livestock holding, the contribution of poultry production to household cash income, the global trend in food prices, regional supply and consumption of animal source food and the status of moderate or severe food insecurity in developing and developed countries. This paper highlights the scope of smallholder poultry production in the developing world, trends in global food price increases, the role of smallholder poultry production in poverty reduction and food security, opportunities for improved poultry production and productivity, and provides conclusion and policy implications for the future. Poultry production is an integral part of smallholder agriculture in the developing world and has a multidimensional contribution to the livelihood of both rural and urban households. Its contribution spans economic and social to cultural and environmental benefits (Gueye, 2000; Akinola and Essien, 2011; Birhanu et al., 2022). The economic contributions mainly include its role in generating additional income for the family that can be used to pay school fees, cover medical expenses, and even buy other agricultural inputs such as fertilizer and improved seeds (Birhanu et al., 2021b). Income from poultry production is generated from the sale of eggs, meat, live chickens, and sometimes the sale of manure. Smallholder poultry production is households’ primary source of high-quality protein (Wong et al., 2017). Also, the birds are raised for other socio-cultural purposes, such as religious ceremonies and festivals, gifts, and cock fighting (Birhanu et al., 2022). The birds can also serve as an asset that can be quickly converted into cash during emergencies or unexpected household expenses. Rural households in developing countries are very heterogeneous. They vary, including resource endowments, land holdings, livestock ownership, and socio-cultural and environmental aspects. In most developing countries, livestock holding is one of the indicators of household socio-economic status, as livestock are the primary sources of household food and income. Among others, poultry is the primary livestock species kept by smallholder farmers, and it is a vital livestock production activity in rural and peri-urban areas. Figure 1 presents the proportion of sampled households keeping different livestock species from 2015 to 2020 in 24 developing countries disaggregated by the World Bank income classification of countries and developing regions. In the lower-income countries, 55% of the households kept poultry (mainly chicken), followed by cattle (50%) and goats (42%). A total of 68% of households in the lower-middle-income countries also kept poultry, followed by cattle (38%) and goats (30%). When we disaggregated by developing sub-regions, a higher proportion of households in Latin America, the Caribbean, East Asia, and the Pacific kept poultry than those in Sub-Saharan Africa (SSA). Poultry was owned by 75%, 78%, and 57% of the sampled rural households in East Asia and the Pacific, Latin America and the Caribbean, and Sub-Saharan Africa, respectively. Poultry was kept by most rural households, which may indicate the vital role of poultry production in rural households’ livelihoods. Proportion of smallholder farmers that kept different livestock species in developing regions (2015 to 2020). An increasing trend in food prices has become the primary global social and economic concern in the previous few decades as it makes the cost of basic household food more expensive for resource-poor households. It affects both the quantity and quality of foods consumed by households. Evidence from the FAO global food price change indicates that food prices showed an overall increasing trend in the previous three decades (1991 to 2022), including the price of meat and dairy products (Figure 2). For instance, in 2021, the average food price index was 125.7, 27.6 points greater than the index in 2020. Similarly, the price index for meat was 107.7, which is 12.2 points greater than the year before. Among the five food groups, the oil food groups experienced the highest increase in price, which showed 65.4 points increment in 2021 than the previous year. These may include some feed ingredients used in the commercial poultry production sector, which has implications on the price of eggs and poultry meat. FAO Food Price Index (FFPI) trends in the previous three decades (1991 to 2022). Like other food products, there was an increasing trend in the price of eggs and chicken in the previous three decades. Figure 3 shows the producer price index (PPI) for eggs and chicken from 1991 to 2022, mainly in countries where the RHoMIS data was collected. The PPI shows domestic producers’ average prices of eggs and chicken at the farm gate, which indicates the change in the prices of products from the producers’ perspective. There was a significant increase in the prices of eggs and chicken in the three developing sub-regions, East Asia and the Pacific (EAP), Latin America and the Caribbean (LAC), and SSA. The increased producers’ price would increase the net income generated from poultry production as most smallholder poultry producers use limited purchased inputs for production. Producer Price Index (PPI) for eggs and chicken meat in developing sub-regions (2014 to 2016 = 100). According to the new global poverty line, under 700-million people live in extreme poverty. Most of these people reside in low- and middle-income countries, mainly in Africa and Asia. The recent Covid-19 pandemic and increasing price of oil, fertilizers, and other essential food items resulting from the Russian–Ukraine crisis also potentially increased poverty in developing regions. Rising prices would heighten the poverty incidence and mainly affect the poor by increasing the cost of living and making most nonpoor people enter poverty (Easterly and Fischer, 2001) or pushing back people who recently escaped poverty. Therefore, there is a need to develop strategies that will enhance the resilience of the most vulnerable households in developing regions. One of the strategies suggested is creating jobs and employment opportunities that enhance the income of resource-poor households (Ayoo, 2021). In the rural areas of developing countries, households’ livelihood mainly depends on agricultural activities, including crop and livestock production and wages earned from the farm and nonfarm activities. Although most rural households are subsistence-based, they usually generate income by selling surplus crops and livestock products to cover other expenses. In this regard, poultry production can play an important role, as it is most rural households’ primary livestock production activity. Moreover, since women play major roles in poultry production, poultry production helps to reduce inequality by enhancing their income and control over resources. The potential contribution of poultry production to households’ income may vary from household to household, depending on the households’ socio-economic status and other cultural factors. As the dominant livestock are kept by resource-poor households, the relative income contribution for these households would be higher than resource-rich households. We used the RHoMIS data to examine the contribution of poultry cash income to livestock and household cash incomes from 2015 to 2020. In this case, the poultry cash income constitutes income from selling poultry (chicken, duck, and other poultry) and poultry products (egg/meat/live chicken). The livestock cash income refers to income from selling livestock and livestock products, including cattle, sheep, goats, horses/donkeys, pigs, chickens, ducks, and other poultry. Likewise, household cash income refers to the income from the sale of livestock and livestock products, the sale of crop and crop products, and income generated from off-farm activities. We examined the proportion of poultry cash income by disaggregating it with the overall household income quintile. Unlike the cash income indicators, the overall household income quintile was constructed from cash and noncash incomes estimated from on-farm and off-farm livelihood activities, including the value of owned crops and livestock products consumed at home. The first- and second-income quintiles (Q1 and Q2) can represent households with lower income or poor households, and the fourth- and fifth-income quintiles (Q4 and Q5) can represent households with higher income or rich households. Results show that the proportion of cash income generated from the poultry production was higher for the poorest households than for the richest households (Figures 4 and 5). When the proportion of poultry cash income from livestock cash income was considered, households in the first quintile (Q1), the poorest 20% of households, generated the highest (43.5%) cash income proportion, followed by households in the second quintile (Q2), 28.9% (Figure 4). In comparison, the top 20% of richest households (Q5) generated 15.2% of the livestock cash income from poultry production. For some households, cash income from poultry production was the only reported livestock cash income; most were found in the lowest 40% (Q1 and Q2) households. There was also significant variability in the average poultry cash income contribution from country to country, ranging from 2.11% to 85.25%, depending on the country’s socio-economic status. Average contribution (%) of poultry cash income to livestock cash income (2015 to 2020). Average contribution (%) of poultry cash income to household cash income (2015 to 2020). Likewise, the contribution of poultry cash income to household cash income was significantly higher for households in the lower-income quintile than households in the higher-income quintile. Poultry cash income for of households’ cash income in the lowest 20% of poor households (Q1), it for of the top 20% or the richest households Figure 5). This could be associated with livelihood opportunities for the poorest households, their potential to generate more income. Although the average contribution of poultry cash income to overall household cash income seems it has significant implications for households living the poverty The higher contribution of poultry cash income to households’ livestock and total cash income in the first and second quintiles (Q1 and Q2) may suggest poultry production is one of the major livelihood for resource-poor households and its potential role as an for poverty reduction and enhancing households’ most resource-poor households are net sellers of poultry products, the income contribution increases the price of eggs and live increases, during price increases. 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Most of the sub-regions in Africa and Asia and and America and the Caribbean were highly by In most developing is strongly associated with limited animal source foods (ASFs) consumption et al., 2020). to its effect on the quantity and quality of food the existing challenge would be during global and increases in food data from to on food supply and food security status indicate an animal food supply and moderate and severe food insecurity in the (Figure countries are by a higher of food insecurity and a limited supply of For instance, the average supply of animal source protein in lower-income and lower-middle-income countries average for and are based on countries in the RHoMIS datasets. World are global were significantly lower than that in and countries. The (2014 to 2015 to 2016 to to for protein supply and of moderate and severe food insecurity in lower-income countries were and respectively. 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