Costs and benefits of livestock systems and the role of market and nonmarket relationships

In developing countries livestock are kept not only for their physical products, but also for insurance, financing, and to display status. Though this range of purposes is acknowledged, livestock policies nevertheless often emphasize physical production: a limited perspective that hampers the formulation and implementation of effective livestock policies. This article presents a comprehensive appraisal of costs and benefits of livestock systems that takes into account the institutional environment of livestock keepers. Indicators are developed that capture, quantify, and organize not only the benefits resulting from the physical production, but also those from the intangible functions. The method is illustrated by an analysis of cattle in the Western Province of Zambia. The results indicate that the perspective on livestock systems developed more closely reflects the observed decisions of the livestock keepers.