The economic valuation of farm animal genetic resources: a survey of available methods

Abstract

Genetic erosion of domestic animal diversity has placed 30% of the world's breeds at risk of extinction, often as a result of government policy/programmes. Conservation and sustainable development of animal genetic resources (AnGR) require a broad focus that includes the many ‘adaptive’ breeds that survive well in the low external input agriculture typical of developing countries. Environmental economic valuation methodologies have an important role to play in supporting decisions regarding which breeds should be conserved and how this should be done. However, AnGR, in general, and valuation methods in particular, have received very little attention. This paper provides a survey of the methods available for the valuation of AnGR and the steps that must be taken in order to test some of the more promising methodologies in practice.

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Ecological Economics 36 (2001) 1–18
SURVEY
The economic valuation of farm animal genetic resources: a
survey of available methods
Adam G. Druckera,*, Veronica Gomezb, Simon Andersonc
aInternational Li?estock Research Institute, PO Box 5689, Addis Ababa, Ethiopia
bFMVZ-Uni?ersidad Autonoma de Yucatan, Apdo. 116-4 Itzimna ´, Me ´rida 97100 Yucatan, Mexico
cImperial College at Wye, Wye, Ashford, Kent TN25 5AH, UK
Received 1 February 2000; received in revised form 1 August 2000; accepted 29 August 2000
Abstract
Genetic erosion of domestic animal diversity has placed 30% of the world’s breeds at risk of extinction, often as
a result of government policy/programmes. Conservation and sustainable development of animal genetic resources
(AnGR) require a broad focus that includes the many ‘adaptive’ breeds that survive well in the low external input
agriculture typical of developing countries. Environmental economic valuation methodologies have an important role
to play in supporting decisions regarding which breeds should be conserved and how this should be done. However,
AnGR, in general, and valuation methods in particular, have received very little attention. This paper provides a
survey of the methods available for the valuation of AnGR and the steps that must be taken in order to test some
of the more promising methodologies in practice. © 2001 Elsevier Science B.V. All rights reserved.
Keywords: Animal genetic resources; Biodiversity; Economic valuation; Conservation policy
www.elsevier.com/locate/ecolecon
1. Introduction
Genetic erosion of domestic animal diversity
has placed 30% of the world’s breeds at risk of
extinction (Hammond, 1996). This is often due to
governmentpolicy/programmes promotinga
small range of specialised ‘improved’ breeds. Live-
stock keeping by poor families in semi-commer-
cial and subsistence agriculture is multi-purpose,
and ‘improved’ breeds often do not have the
attributes required to enable them to fulfil the
multi-faceted roles they are allocated. Thus liveli-
hoods of the poor can be negatively affected by
replacing traditional with ‘improved’ breeds. The
FAO (1997) concludes that ‘conservation and sus-
tainable development of animal genetic resources
(AnGR) requires a shift towards a broad focus on
the many ‘adaptive’ breeds that survive well in the
* Corresponding author. Tel.: +44-123-3812855; fax: +44-
123-3812855.
E-mail addresses: adrucker@finred.com.mx (A.G. Drucker),
vgomez@tunku.uady.mx (V. Gomez), sianderson@compu-
serve.com (S. Anderson).
0921-8009/01/$ - see front matter © 2001 Elsevier Science B.V. All rights reserved.
PII: S0921-8009(00)00242-1

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A.G. Drucker et al. / Ecological Economics 36 (2001) 1–182
low external input agriculture typical of develop-
ing countries’.
There is a need then to decide which breeds
should be conserved and how this should be done.
In this context, environmental economic valuation
methodologies have an important role to play
(Artuso, 1996). Valuation can guide resource allo-
cation among biodiversity conservation and other
socially valuable endeavours, as well as between
various types of genetic resource conservation,
research and development. It can also assist in the
design of economic incentives and institutional
arrangements for farmers/genetic resource man-
agers and breeders.
AnGR, in general, and valuation methods in
particular, have received very little attention, de-
spite the existence of a conceptual framework for
the valuation of biodiversity in general. The scant
literature on economic valuation of AnGR draws
heavily on the scarce and not always compatible
valuation literature for plant genetic resources.
AnGR issues and valuation have only recently
begun to receive attention internationally.
This paper surveys the methods available for
the valuation of AnGR and assesses the steps that
must be taken in order to test some of the more
promising methodologies.
2. The importance of animal genetic resources
Both plant and animal species are incorporated
into the majority of agricultural systems world-
wide. Domestic animals supply some 30% of total
human requirements for food and agriculture
(FAO, 1999) by providing final and intermediate
outputs. These vary from direct food products,
such as meat, milk, eggs and blood, to such
products as dung, wool, hides and draught power.
They can also play an important role as cash
reserves in low-income mixed farming systems. It
has been calculated that some 70% of the world’s
rural poor depend on livestock as a component of
their livelihoods(Livestock
1999). This sector includes:
? 640 million poor farmers in rainfed areas;
? 190 million pastoralists in arid or mountainous
zones; and
in Development,
? ?100 million people in landless households.
AnGR diversity thus contributes in many ways to
human survival and well-being. Animals of differ-
ent characteristics, and hence outputs, suit differ-
ing local community needs. In this context,
Anderson (1998) notes that:
? livestock have both functions (interactions with
other components of the agroecosystem) and
purposes (functions recognised and managed
by livestock owners) within agroecosystems;
? there exist differences between species, breeds,
and individual animals as to their capacity to
fulfill these functions and purposes;
? the wider and immediate environments, and
the farmers’ purposes for livestock production,
change over time;
? previous genetic selection for breeds suited to
high input/output systems has narrowed the
genetic base (see below); and
? new demands exist on animal genetic resources
to fit into agroecological and livelihood ori-
ented production systems.
3. The erosion of animal genetic resources
Genetic erosion has occurred through the loss
of breeds and the loss of genetic traits (within
breed diversity).
An estimated 90% of the total contribution to
food and agriculture production comes from only
?14 of these species (FAO, 1999). Although this
small number still harbours a wide pool of genetic
diversity, an estimated 16% of uniquely adapted
breeds bred over thousands of years of domestica-
tion in a wide range of environments has been lost
since the turn of the century (Hall and Ruane,
1993). A further 30% are at risk of becoming
extinct1and the rate of extinction continues to
1Breeds at risk are defined by the FAO (1999) as ‘any breed
that may become extinct if the factors causing its decline in
numbers are not eliminated or mitigated. Risk of extinction
may result from, inter alia, low population size; direct and
indirect impacts of policy at the farm, country or international
levels; lack of proper breed organization; or lack of adaptation
to market demands. Breeds are categorized as to their risk
status on the basis of, inter alia, the actual numbers of male
and/or female breeding individuals and the percentage of

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A.G. Drucker et al. / Ecological Economics 36 (2001) 1–183
Table 1
A summary of livestock breeds at risk of extinction in the different regionsa
RegionBreeds at riskBreeds recorded% of Recorded
276.8
10.5
37.8
13.2
4.0
28.9
22.5
Africa
Asia Pacific
Europe
Near East
South and Central America
North America
World
396
996
1688
220
378
204
3882
105
638
29
15
59
873
aAdapted from Hammond and Leitch (1996a,b).
accelerate (FAO, 1995a,b). Table 1 presents a
summary of the numbers of breeds at risk in
different regions of the world. In Europe, where
currently nearly two-fifths of existing breeds are at
risk, one-third of breeds existing in the early 1900’s
have already been lost (Hammond and Leitch,
1996a). In Africa, 22% of African cattle breeds
have become extinct in the last 100 years while 27%
are at varying degrees of risk (Rege, 1999).
The impact of breed loss on genetic diversity
will depend on the genetic distance (i.e. the extent
of the pair-wise dissimilarity between the underly-
ing DNA) between the breed in question and the
surviving breeds. A situation similar to that de-
scribed at the species level by Weitzman (1993). A
variety of approaches for measuring genetic dis-
tances between breeds/strains exist. While such
information can be useful with regard to support-
ing decisions regarding what to conserve given the
aim of maximising diversity, it is not a prerequi-
site for the realisation of valuation activities. Fur-
thermore, Ruane (1999) argues that other criteria
such as, the degree of endangerment; adaptation
to a specific environment; possession of important
traits of economic importance or scientific value;
andcultural/historical
considered.
Although information about such genetic dis-
tances for extinct and at risk livestock breeds is
limited, there is strong evidence that breed loss
leads to a significant reduction in genetic diver-
value shouldalso be
sity. Hammond and Leitch (1996b) observe that
the genetic variance between breeds accounts for
approximately 30–50% of the total variance. The
loss of a given breed is therefore associated with a
significant decline in genetic diversity, especially
since such losses tend to be of breeds adapted to
specific localities. Hence, the resulting genetic loss
is not likely to be of a redundant genetic resource
(Rege, personal communication, 2000). Added to
which, the technology to recreate a breed once
lost does as yet exist.
Most ‘improved’ livestock breeds have been
selected on the basis of very few traits of commer-
cial interest. This has resulted in a loss of within
breed genetic variance (Bulmer, 1980). Smale and
Bellon (1999), considering diversity loss in PGR
(plant/crop genetic resources), question the asser-
tion that varietal loss leads to a loss of traits of
interest to the farmer. They state that introduced
varieties may ‘pack’ more favourable traits than
existing varieties. This has not been the case with
improved breeds of livestock. Genotype/environ-
ment interactions have severely constrained the
productivity of ‘improved’ livestock breeds in un-
favourable environments, perhaps more so than
high yielding crop varieties. An analogy could be
that a plant breeder would not expect a green-
house-bred crop to perform to its genetic poten-
tial if grown in a poor fertility, water-stressed
field. Yet ‘improved’ livestock breeds have been
expected to achieve comparable feats.
The intensification of livestock production has
been achieved by providing animals of high pro-
duction potential environments that allow expres-
sion of that potential. Hence adaptive traits are
pure-bred females. FAO has established categories of risk
status: critical, endangered, critical-maintained, endangered-
maintained, and not at risk.’

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A.G. Drucker et al. / Ecological Economics 36 (2001) 1–184
not important in these systems, and highly se-
lected less adaptive breeds have become predomi-
nant. For example, over 60% of cattle in the
European Union are derived from the Holstein–
Friesianbreed(REDES-AT-GRAIN,
Added to which, 50% of the 5000 Holstein–
Friesian bulls from 18 countries born in 1990,
evaluated by the Interbull Centre, were bred by
only five sires (Wickham and Banos, 1998). While
the proportion of the (exotic) taurine allele found
in Kilimanjaro Zebu was as high as 35% (Hanotte
et al., 2000).
According to the International Livestock Re-
search Institute (ILRI), the causes of AnGR ero-
sion often stem from the ‘misguided development
policies initiated in developing countries last cen-
tury which have largely ignored the vast majority
of AnGR adapted to the lower input mixed farm-
ing and pastoral production systems2
throughout the developing world. Instead, the
focus has been on the introduction of higher-
yielding exotic breeds that were developed for
high-input, comparatively benign production en-
vironments’ (ILRI, 1999). The Intermediate Tech-
nology Development Group (ITDG, 1996) notes
that such policies are generally production ori-
ented. They often involve substituting local breeds
with imported ones, and then multiplying and
distributing them. Such programmes can threaten
the conservation and maintenance of local breeds.
Not only has inadequate attention been given to
the advantages of indigenous breed use and to the
impact of breed replacement on such populations,
but also the approach has proved unsustainable in
terms of the ‘improved’ breeds being able to re-
produce themselves in harsh environments and
the apparent comparative advantage in terms of
productivity not being realised (Vaccaro 1973;
Vaccaro, 1974; Cunningham and Syrstad, 1987).
Research in SE Mexico has demonstrated that
despite local people’s expressed preferences for the
local Creole pig according to various criteria,
1994).
found
temporary subsidies for breed substitution and of
input prices have led to the Creole coming close
to extinct (Drucker et al., 1999).
Livestock keeping by poor families is multi-pur-
pose and ‘improved’ breeds often do not have the
adaptive attributes required of them to fulfill their
multi-faceted roles. For example, Tano et al.
(1998) concluded that cattle breed improvement
programmes in West Africa should focus on traits
such as disease resistance and fitness for traction
rather than improved milk production. Without
such a multi-purpose focus the livelihoods of poor
families can be negatively affected by replacing
traditional with ‘improved’ breeds. Furthermore,
by the time such unsustainability manifests itself
irreversible genetic loss
occurred.
Biological and ecological arguments have been
advanced with regard to the need to reduce the
loss of genetic diversity.3These include issues
related to climate and disease, as well as changes
in production systems and consumer tastes/prefer-
ences. Global climate change may require live-
stock breeds that withstand greater extremes in
temperature and rainfall. Resistance to unpre-
dictable new diseases is also important as wit-
nessed by the importance of zebu breeds that were
resistant to the rinderpest epidemic that swept
Africa in the early 20th century (Rege, 1999).
Changing farm legislation and shifts in consumer
preferences (e.g. away from intensive to free range
and outdoor systems) have led farmers to adapt
their production systems and hence their breed
requirements. For example, in the UK pig breed-
ing programmes incorporated the South African
Saddleback pig as it is better able to accommo-
date grass feeding and partition more nutrients to
fat for weathering colder temperatures (ILRI,
1999).
From a socio-economic point of view, AnGR
conservation is also important given that most
(70%) of the ?4000 breeds of livestock remaining
are found in developing countries (FAO, 1999).
may have already
2Only a few governments are supportive of pastoralists
while some countries such as Kenya actively promote seden-
tarisation which can lead to the loss of local livestock breeds.
One exception is Mongolia where the government actively
supports traditional nomadic pastoralism (ITDG, 1996).
3Genetic diversity is defined as ‘the sum of genetic informa-
tion contained in the genes of individuals of plants, animals
and micro-organisms’ (Pearce and Moran, 1994).

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A.G. Drucker et al. / Ecological Economics 36 (2001) 1–185
Table 2
Causes of genetic erosion in livestock related to erosion type and agricultural system
Type of genetic erosionType of agricultural system
Livelihood orientedMarket oriented
Intense selection for bioeconomic
productivity traits and subsidised mass
diffusion has led to a loss of adaptive
traits
Traditional processes of out-crossing are
eroded, sub-populations become isolated
and inbreeding increases
Narrowing of the genetic base
Breed substitution and upgrading by
cross-breeding
Erosion of husbandry knowledge and
recognition of traditional breed’s value lost
Subsidies or incentives to use certain breeds or production systems can cause changes
in livestock breeding strategies that cause loss of local breeds. Once subsidies or
incentives are removed, local livestock populations may not be able to recover. Often
associated with tied-aid programmes.
Breeding companies often only sell hybrid stock further crossing therefore prone to
loss of heterosis. Rare breeds often crossed with ‘improved’ breeds due to small
population, dilution of breed characteristics result. Creation of gene pool from which
it is then difficult to identify and utilise favourable local breed genetic characteristics.
Up-grading often used whereby local breed successively crossed with exotic. Genetic
impact statements seldom required before importation happens. Loss of
environmental adaptation occurs and the investment in maintaining local breed not
made.
Perception that consumption of local breed Homogenisation of consumption
products is somehow backward —
demand declines.
The roles of certain livestock change, disappear or alter, in the short to medium term
and interest in keeping them dwindles. Market value of animal products falls or
competition increases (often because of subsidies) and local population becomes
uneconomic.
Natural disasters, epidemics and war.
Poorly planned or executed conservation measures can result in loss of valuable
genotypes, e.g. high inbreeding in small populations, genetic material inadequately
stored, ex-situ conservation causes loss of adaptation traits, etc.
patterns/tastes leading to preference for
imported breeds products
Small populations under threata
aSudden threats to small and/or localised livestock populations can cause severe depletion in breeding numbers beyond point of
recovery.
Here the indigenous and/or Creole4animal popu-
lations are well adapted to the typically low-input
production systems of these countries, many of
which are found on marginal lands because of
high human population growth.
In Table 2, the types of genetic erosion within
different agricultural systems are related to the
causes of erosion that have so far been identified
in livestock populations.
4. The economics of AnGR erosion: a conceptual
framework
AnGR erosion can thus be seen in terms of the
replacement (not only by substitution, but also
through cross-breeding and the elimination of
livestock because of production system changes)
of the existing slate of domestic animals with a
selection from a small range of specialised ‘im-
proved’ breeds. This bias towards investment in
such specialised breeds results in the under-invest-
ment of a more diverse set of breeds in a world
where human investments are now necessary for
the survival of the latter (Brown et al., 1993), see
Fig. 1. Economic rationality suggests that such
4Creole breeds are those that have been introduced to
different regions in the distant past and have become adapted
to the prevailing conditions largely through natural selection,
e.g. cattle, pigs and poultry taken to Latin America from
Iberian Peninsula some 400–500 years ago.