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ME-WbCorrt Public Disclosure Authorized 1 73 1z1World Bank Discussion Papers The Livestock Public Disclosure Authorized Sector in Eastern Europe Constraints Public Disclosure Authorized and Opportunities Cornelis de Haan, Tjaart Schilihom van Veen, and Karen Brooks Public Disclosure Authorized FiLECOPY Recent World Bank Discussion Papers No. 114 UsingKnowledgefrom Social Science in DevelopmentProjects. Michael M. Cernea No. 115 DesigningMajor PolicyReform: Lessonsfromthe TransportSector. Ian G. Heggie No. 116 Women's Work, Education,and Family Wefare in Peru. BarbaraK. Herz and ShahidurR. Khandker,editors No. 117 DevelopingFinancial Institutionsfor the Poorand ReducingBarriers to AccessforWomen. SharonL. Holt and HelenaRibe No. 118 Improvingthe Performanceof SovietEnterprises. John Nellis No. 119 PublicEnterprise Reform: Lessonsffrom the Past and Issuesforthe Future.Ahmed Galal No. 120 The InformationTechnology Revolution and EconomicDevelopment. Nagy K. 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The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabeticaltitle list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is availablefree of charge from the Distribution Unit, Office of the Publisher, Department F, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Iena, 75116 Paris, France. ISSN: 0259-21OX Comelis de Haan is livestock adviser in the Wordd Bank's Agriculture and Rural Development Departmnent.Tjaart Schillhom van Veen is livestock specialistin the Agriculture and Rural Development Division of the Bank's Europe and Central Asia, Middle East and North Africa Regions Shared Services Department. Karen Brooks is senior economist in the Agricultural Policies Division of the Bank's Agriculture and Rural Development Department. Library of Congress Cataloging-in-Publication Data Haan, C. de. The livestock sector in Eastern Europe: constraints and opportunities / Cornelis de Haan, Tjaart Schillhorn van Veen, and Karen Brooks. p. cm. - (World Bank discussionpapers; 173) Includes bibliographicalreferences. ISBN 0-8213-2202-8 1. Animal industry-Europe, Eastern. 2. Livestock-Europe, Eastern. 3. Agriculture-Economic aspects-Europe, Eastern. I. Schillhorn-van-Veen, T. W. II. Brooks, Karen McConnell. III. Title. IV. Series. HD9425.E82H3 1992 338.1'76'00947-dc2O 92-26314 CIP - Ili - - ~~~FOREWORD Agriculturein EastemEurope is undergoingdramatic change. Ownership of land and animalsis transferredfrom the stateto the privatesector. Consumerand prodLucer subsidiesare being phased out, and formerlyprotected internal markets are being openedup. Thesechanges have had profoundeffects on productionand rural income and employment,as intemaland exportdemand collapsed and prices plummeted. 'The wholesector now hasto adaptto theseopen market conditions. Thecrucial livestock sector--contributing about half of agriculturalproduction and usingmore than halfthe locallyproduced grain-was severely affected by the movefrom a commandto a marketeconomy. Pastpolicies of heavyprotection and subsidieshad causedexcessive consumption, use of inappropriate--andoften polluting--technologies and inefficientproduction. The requiredadjustments are thereforethe more painful. Productionhas declined,especially in productionsystems depending on importedfeed withrespect to inputs,and extemal market with respectto output. Overallthe sectorIhas experienceda contractionof approximately20% since the late eighties. Still,the sectorhas considerable potential. Physical conditions are generally good for livestockproduction and marketopportunities already exist and can be still further developed. Thisreport indicates how this potentialcan be furtherdeveloped. It presentsthe currentsituation as a resultof past policiesand recommendsshort and mediumterm measuresto improveefficiency, develop markets and reducesthe sector's negative environmentalimpact. Thisreport intends to guideWorld Bank staff,other donorsand EasternEuropean officials involved in the sectorin the technical,institutional and policy issuesconcerned. HarinderS. Kohli MichelPetit Director Director TechnicalDepartment Agricultureand Rural Europe,Central Asia, Middle East DevelopmentDepartment and NorthAfrica Regions - iv - ACKNOWLEDGEMENTS The authors have made extensiveuse of the informationpresented at two consecutiveround tables organized by the EuropeanAssociation for AnimalProduction and FAO in respectivelyBudapest (April 1991) and Berlin (January1992). These contributionsto a betterunderstanding of the processesin the livestocksector in Eastern Europeare gratefullyacknowledged. Furthermore, the authorswish to thankthe many WorldBank colleagueswho commentedon this paper. In particular,they wouldlike to thank Mr. PremC. Garg,who reviewedseveral drafts, Mrs. Arntraud Hartmann and Mr. Odin Knudsenwho acted as peer reviewers,Mr. Rory O'Sullivanfor support and encouragementand Mr. WillemZijp who providedinput in the part on Humanresource development.As alwaysthe remainingerrors and omissionsshould be attributedto the authors.