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«FAO ANIMAL PRODUCTION AND HEALTH paper ADDING VALUE TO LIVESTOCK DIVERSITY Marketing to promote local breeds and improve livelihoods Cover ...»

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There are many reasons for this loss of breeds. Breeds that produce less meat, milk or eggs are being replaced by higher-yielding types (FAO 2007b). Stockholders who maintain traditional, local breeds cannot compete, so either switch to the exotic breeds or give up production altogether. In developing countries, governments, development projects and private companies try to persuade farmers to keep exotic breeds or promote cross-breeding to “improve” the local breeds. Other factors include increasing mechanization and specialization of farming, land-use changes, and policy failures (Box 1).

Governments are sufficiently concerned about this erosion of livestock breeds to issue a Global Plan of Action for Animal Genetic Resources (FAO 2007a). This contains recommendations on monitoring the loss of breeds, their sustainable use and development, their conservation, and policies, institutions and capacity building to manage animal genetic resources.

Many of the problems associated with local breeds also face “minor” livestock species, other than the “big five” of cattle, sheep, goats, pigs and chickens. Such minor species include dromedaries and Bactrian camels, donkeys and yaks. Like local breeds, they continue to produce under difficult conditions, but they are being pushed aside by the “big five”, which receive far more attention from policymakers, donors, researchers, extension

BOX 1 Erosion of animal genetic resources

“This erosion has many causes, including changes in production systems, mechanization, the loss of rangeland grazing resources, natural calamities, disease outbreaks, inappropriate breeding policies and practices, inappropriate introduction of exotic breeds, loss of animal keepers’ security of tenure on land and access to other natural resources, changing cultural practices, the erosion of customary institutions and social relations, the influence of population growth and urbanization, and the failure to assess the impact of practices in terms of sustainability, and develop adequate policies and economic measures. Erosion of animal genetic resources threatens the ability of farmers and livestock keepers to respond to environmental and socio-economic changes, including changing diets and consumer preferences.”

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Strategic Priority 6: Support indigenous and local production systems and associated knowledge systems of importance to the maintenance and sustainable use of animal genetic resources.

Action 2: Support indigenous and local livestock systems of importance to animal genetic resources, including through the removal of factors contributing to genetic erosion. Support may include… appropriate access to… the market… and adding value to their specialist products.

Action 4: Promote the development of niche markets for products derived from indigenous and local species and breeds, and strengthen processes to add value to their primary products.

Source: FAO (2007a, p. 20), emphasis added personnel and veterinary staff. They also often perform specific economic roles that may be replaced easily as technology changes.

HOW TO MAINTAIN LOCAL BREEDS?

The erosion of local livestock breeds and minor species is a complex problem, with no single solution: FAO’s Global Plan of Action contains no less than 23 strategic priorities, each specifying several associated actions.

This book focuses on one approach – promoting the use of niche markets for the products of local livestock breeds and minor species. A series of international agreements support this approach. Under Strategic Priority 6 of the Global Plan of Action two action points call on governments to promote the marketing of products based on local breeds and species (Box 2).

Supporting livestock keepers to add value to their traditional breeds also contributes to achieving two of the eight Millennium Development Goals (Box 3).

The Convention on Biological Diversity (Box 4) obliges governments to support traditional lifestyles, biological diversity and cultural practices – of which local breeds and species are an integral part.

WHAT IS NICHE MARKETING?

Niche marketing provides a product or service to a fairly small segment of a market. It can be contrasted with a mass market: one that serves the large majority of consumers.

Mass-market products in the same category are generally hard to distinguish from one another and compete largely on price. Many such products are traded in bulk on commodity exchanges before they are processed and packaged to be sold to consumers.

For livestock, examples of mass-market products are the beef, chicken or milk sold in supermarkets or butcher’s shops, and the wool that goes into the vast majority of woollen Introduction 5

–  –  –

Goal 1: Eradicate extreme poverty and hunger Target 1a: Reduce by half the proportion of people living on less than a dollar a day.

Target 1b: Achieve full and productive employment and decent work for all, including women and young people.

Goal 7: Ensure environmental sustainability Target 7a: Integrate the principles of sustainable development into country policies and programmes; reverse loss of environmental resources.

Target 7b: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss.





Source: UNDP (2000)

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Article 8. In situ conservation Article 8(j): … respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations and practices.

Article 10. Sustainable use of components of biological diversity Article 10(c): Protect and encourage customary use of biological resources in accordance with traditional cultural practices that are compatible with conservation or sustainable use requirements.

Source: CBD (1992).

clothes. Consumers do not generally care where the meat, milk or wool comes from or how it has been produced, and manufacturers make no attempt to tell them.

A niche market, by contrast, serves only a small segment of the market, or a specific group of consumers. Products are distinguished from the mass market by special qualities Adding value to livestock diversity or labelling. A market niche can be a specific geographical area, a specialty industry, an ethnic group, an age group, or a particular group of people (such as diabetics or people with an allergy). Because they are special, niche products may command higher prices than mass products.

For livestock, examples of niche products are cheeses such as Gruyère and Wensleydale, specialty sausages and hams, ultra-fine cashmere, and craft items made of wool or leather.

Consumers buy these products for their special flavour or other qualities (for example, because the animals were raised locally or the items are associated with a specific culture).

Manufacturers take care to inform consumers about these special qualities – for example, on packaging or labels, by selling them through certain shops, or by having sales staff tell customers about the product’s characteristics. They use stringent controls to ensure their product has the required quality, and may seek to protect it legally (for example, through a protected designation of origin) to prevent other suppliers from passing off another product as a niche item.

There is no hard line between a mass market and a niche market. Indeed, manufacturers of mass products often try to differentiate their products from the competition in some way, for example by claiming the product has certain characteristics (such as low-fat yoghurt containing whole fruit) or through distinctive packaging or branding. In this way they try to carve out a niche for themselves into an otherwise mass market.

WHY NICHE MARKETS?

Should a group of producers, a development project or entrepreneur supply their product to the mass market, or consider developing a niche market? For small enterprises, niche

markets offer several advantages over mass marketing:

The initial costs are lower, since it is not necessary to produce large amounts of the product, invest heavily in equipment, or advertise it widely.

It enables the enterprise to focus on its strengths: it can develop products that it is good at producing and marketing. That may give them a real advantage over potential competitors.

The niche may be currently unserved, and the competition may ignore it, either because they are unaware of it or because they think it is too small to worry about.

Nevertheless, niche marketing has disadvantages:

A niche market can disappear quickly as economic conditions and fashions change.

Larger companies may target the niche as it grows in value or size and thus becomes more attractive. A small enterprise may not be able to deal with such competition.

Niches are not always neat and easy to define. They may be scattered geographically, and targeting and promotion may be difficult or expensive.

–  –  –

The small-scale producers need to differentiate their product in order to make a living. That means developing a niche market.

Fortunately, many local breeds and species have a large but often unrecognized potential to produce items that customers appreciate and demand:

They have unique characteristics. Many local breeds produce items with particular qualities: coloured wool, patterned hides, super-fine fibre, meat that is especially tasty, or milk that has special qualities. Many of these traits (such as coloured wool) are undesirable in the mass market, but are ideal for certain market segments – if only they can be marketed in the right way.

Products of local breeds are often processed in traditional ways. Many local handicraft traditions have grown up using the products from a local breed. Coloured wool, for example, is woven to make traditional garments with specific patterns. The need to conserve milk or meat without refrigeration has led to the development of unique sausages and cheeses.

They have strong local ties. Many local breeds and species have strong ties with a particular area, ethnic group or way of life. These local ties can become an important selling point for the product: in buying a poncho or pashmina, a cheese or a rib-chop, tourists feel they can buy a little piece of the local area or can associate with or support the people who produced the item.

The value of local breeds as sources of culinary delicacies is well established in parts of the developed world. In Europe, and especially in the Mediterranean countries (Italy, France, Spain), many specialty cheeses and meats are associated with particular breeds.

In Germany, meat from such breeds as the Heidschnucke sheep and Schwäbisch-Hallische pig are at a premium in gourmet restaurants. In North America, too, there are efforts to market the meat and wool from heritage breeds. In these countries, the marketing of cheeses, sausages, wool and other specialty products has contributed to the conservation of indigenous breeds, enhanced regional identities and stimulated rural economies. From developing countries, however, examples of this approach are rare.

BENEFITS OF NICHE MARKETS

Experience in developed countries suggests that developing niche markets for products based on local breeds and species offers several potential benefits.

Employment and income. Local breeds and species are often produced in rural areas with surplus labour and a lack of employment opportunities. Developing a market for their products could generate employment and income for livestock keepers, their families, and others in livestock raising, food processing, handicrafts and trade.

Local breed conservation. Developing a market for the products of a local breed or species makes it more attractive for livestock keepers to continue raising such animals. Conserving a breed in situ, in the conditions in which it was originally developed, is likely to be far cheaper than the alternative: ex situ conservation of live animals on breeding farms, or the preservation of deep-frozen semen and embryos.

Niche marketing offers a way to make in situ conservation profitable, without relying on government subsidies.

Environmental conservation. In conserving a breed, it is also necessary to conserve Adding value to livestock diversity the ecosystem where it is maintained. Maintaining a breed in itself may help maintain an ecosystem – for example where grazing suppresses the development of bush and maintains an open grassland. Niche marketing may also encourage local people to maintain an ecosystem and prevent its conversion to other uses. Indeed, many niche livestock products may require that the animals are grazed in a particular way rather than being stall-fed.

Gender. Promoting niche markets has the potential to enable women to gain skills and earn money, and to raise their status in traditional societies. Women and men may play specific roles in raising livestock (women often care for sheep, goats and chickens and are responsible for raising calves, while men tend the adult cattle), or in processing and trading products (men often shear sheep, while women spin and weave the wool).

Conserving cultural values. The culture of many livestock-keeping communities is closely intertwined with particular breeds. By providing the economic incentive to maintain the breed, niche marketing also contributes to conserving the culture.

Many niche products are explicitly linked to the livestock keepers’ culture: they draw on traditional handicrafts, or rely on the specific roles that men and women play in livestock production, product processing and trade.

FINDING A NICHE

Various challenges face attempts to develop niche markets for local breeds and species.



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