External Shocks, Producer Risk, and Adjustment in Smallholder Livestock Production: The Case of HPAI in Viet Nam
Smallholder production remains the majority enterprise model in global agriculture, largely because of the predominance of household farms in low income countries. Two salient challenges for the world's rural poor smallholders are risk and vulnerability. Because of poverty, these farmers are more likely to experience adverse external shocks than higher income farmers. In response to this, smallholders have developed strategies for (ex ante) risk management and (ex post) risk coping. Policies that seek to alleviate rural poverty can be more effective if they recognize farmer's own capacity for adjustment and facilitate this constructively, helping farmers secure the basis for more sustainable improvements in their livelihoods. To achieve this requires deeper insight into smallholder behaviour, including a better understanding of how household enterprises respond to adverse shocks.
This paper examines the case of smallholder poultry production and adjustments arising from the risk of HPAI infection in Viet Nam. How farmers can mix three risk reduction strategies: product diversification, investment in product quality (biosafety), and development of off-farm income opportunities, to mitigate the adverse effects of significant animal disease risk, is considered. Given their findings, the authors aim to provide a basis for complementary policies that promote smallholder viability while achieving risk reduction, an approach that increases both individual and economywide welfare.
PPLPI, FAO, Rome, Italy, 20 pp.