BRIEF January 24, 2019

Moving towards sustainability: The Livestock Sector and the World Bank

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Overview

The livestock sector is a pillar of the global food system and a contributor to poverty reduction, food security and agricultural development. According to the FAO, livestock contribute 40% of the global value of agricultural output and support the livelihoods and food and nutrition security of almost 1.3 billion people.  

Livestock play a major role in sustainable food systems—for example, manure is critical in nutrient management and when used as draft animals, livestock can help boost productivity in regions where there is low mechanization. Livestock are also important assets for vulnerable communities. Globally, around 500 million pastoralists rely on livestock herding for food, income, and as a store of wealth, collateral or safety net in times of needs. Locally, livestock production systems also contribute to the preservation of biodiversity and to carbon sequestration in soils and biomass

Increasing incomes, changing diets and population growth, have made the livestock sector one of the fastest growing agricultural sub-sectors in middle- and low-income countries. This represents a major opportunity for smallholders, agribusiness and job creators throughout the livestock supply chain.  

The transformations that accompany growth are also an opportunity to move the livestock sector toward more sustainable development and improved contribution to human diets. Production levels and practices can be managed in ways that address adverse impacts on land, water, and the environment and the risks posed to animal and human health. Currently, the livestock sector emits an estimated 7.1 Gt of CO2-equivalent per year, representing 14.5% of human-induced greenhouse gas (GHG) emissions. Increasing the efficiency of livestock supply chains is key to limiting the growth of GHG emissions in the future.

Strategy: Moving towards environmental sustainability in the livestock sector

The Bank supports countries to manage their growing demand for animal protein in ways that are significantly less harmful for the environment and contribute significantly less to climate change.

Requests for World Bank support to livestock operations have increased from an average of US$150 million in annual lending commitments at the beginning of the decade, to about US$ 250 million in new lending a year in the last three years. Most of the growth has been in Africa and South Asia. Currently, the World Bank has US$ 1.4 billion in active investments in livestock.

As part of its commitment to helping countries build sustainable, nutritious food systems, the World Bank is moving its livestock investments towards greater sustainability and climate-smart outcomes: over the last three years, an average of 55% of the World Bank financing for new livestock projects has been designed to yield climate change mitigation and adaptation co-benefits.

Bank-supported projects focus on pursuing efficiency gains, balancing animal rations and sourcing feeds sustainably, developing energy efficient technologies and renewable energy sources, improving animal health and welfare through disease prevention, and improving manure management to optimize soil nutrient balances.

The Bank is also working to share knowledge on best practices in sustainable livestock management through workshops and publications. With partners, it is preparing a series of guides to investment in sustainable livestock, the first of which addresses environmental issues.

The Ethiopia Livestock and Fisheries Sector Development Project, which aims to help 1.2 million households that depend on livestock improve their productivity, is setting an example for the World Bank’s work in the livestock sector. The project expects US$ 108.8 million –or 64% of its funds—to generate climate change mitigation and adaptation co-benefits. Similarly, a project in Bangladesh is anticipated to dedicate US$ 259 million to adaptation and mitigation co-benefits.

Results

In Mexico in 2016, 1,165 small and medium agribusinesses, including businesses focused on livestock production, adopted environmentally sustainable energy technologies such as bio-digesters, reducing C02 emissions by 3,388,670 tons.

In Uruguay, the Bank is supporting government efforts to help farmers adopt climate-smart livestock practices. To date, on-farm investments have improved carbon sequestration in grasslands and energy efficiency of beef and dairy supply chains. Farmers have also invested in biomass energy production, particularly in the dairy sector. The project has also helped minimize and collect waste, and promote sustainable and organic soil management by reducing fertilizer use and conserving water on dairy farms.

In Vietnam, a Bank-supported project benefited over 151,000 livestock farmers. A key feature of the project has been the implementation of good animal husbandry practices (GAHP). 23,107 household-based producers received technology and learned techniques to reduce negative environmental impacts, 362 meat-processing plants improved their waste treatment systems and 489 wet markets upgraded their facilities to improve hygiene and food safety.

In Colombia, the World Bank has engaged with local partners to pilot innovative approaches to sustainable cattle ranching production. The Colombia Mainstreaming Sustainable Cattle Ranching Project, co-funded by the UK government and the Global Environmental Facility, has allowed nearly 32,000 hectares of degraded land to be converted to silvopastoral systems allowing for the capture of 1.05 million tons of CO2 equivalent and the conservation of biodiversity, including 50 native species, since it started as a pilot project in 2011. Individual ranchers received training, technical assistance, key inputs such as planting materials at low costs, and financial incentives. The adoption of silvopastoral systems has achieved a 17% increase in milk production, 18.5% reduction in production costs, and 23% increase in average number of cows/hectare between 2011 and 2018. In addition, the World Bank Biocarbon Fund’s Initiative for Sustainable Forest Landscape (ISFL) program is testing approaches for reducing emissions from livestock through a partnership between IFC and Alqueria, a private company. Over the period 2018- 2021, the ISFL is providing US$ 1.5 million in financing to develop climate-smart dairy production in Orinoquia that reduces GHG emissions by 25% and ensures Alqueria's milk is produced in verifiable deforestation-free areas.