How Relevant Livestock is to the Economy
Livestock provides over half of the value of global agricultural output and one-third of it in developing countries. Livestock affects the economy in several ways which include:
- Rise in national income per capita: Livestock is a source of livelihood for most farmers. It provides food and revenue for the sustenance of farmers and their families. The number of people securing their livelihoods from agricultural production keeps increasing in developing countries; currently, 42% of over 2.5B depend on agriculture for livelihood. Livestock farming generates employment for people in large scale farms and agro-based industries. For most countries, any improvement in agricultural labour productivity will reflect a rise in national income per capita. This is because the agricultural population forms a large population of the total population.
- Growth in International Trades: Agricultural markets have expanded over the last 50 years, alongside international trades. Livestock and their byproducts (e.g. hide and skin, husks and wool) are exported. They are also used to produce other raw materials which are exported. Low priced export contributes to the growth of the livestock industry. Increased production and higher self-sufficiency save foreign exchange. Due to fewer trade barriers against import of livestock and its products, there is an increase in importation thereby encouraging international trades.
- Provision of capital investment: Livestock is a natural and a physical capital asset. The family flock is a capital stock which increases household income above that derived from the inputs of land and labour. Livestock provides an avenue for investment which produces returns, in terms of increased income or welfare in the future. Extra production is derived from livestock investment. Directly, in the form of meat and other products, but also indirectly in the form of excreta used for farmyard manure and in the production of fertilizers.
Livestock is relevant to the economy because enhancing livestock productivity raises national income per capita, causes growth in international trades, and provides capital investment.
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