Witzenhausen workshop - Improving market integration and value-adding in domestic livestock enterprises in disadvantaged regions - implications for future research.

27-28 September 1997

To improve the profitability of enterprises in the European LFAs, there are generally three alternatives open to farmers: reduce the costs of production, often through reducing labour or other fixed costs; increase the intensity and productivity of the system; or to increase the value of the products sold. The first two of these alternatives often carry with them undesired social and environmental costs. The third, which can be achieved in many different ways, is currently attracting great interest as the alternative which offers most opportunities in terms of maintaining some of the desired outcomes of LFA agriculture - rural employment, traditional landscapes, and a pollution-free rural environment. The Witzenhausen workshop was held in order to explore where the expansion of value-adding activity in Europe is leading, and what the implications of this will be for the systems of animal production required for LFAs in the future.

Value-adding to livestock products can take many forms. Products may be marketed in some way that makes them innately more valuable (added value created), or the marketing chain may be shortened in some way to increase the value realised by the producer, while the product remains the same (recovered added value). Chairman Brian Revell of the Scottish Agricultural College, summarised the various approaches to value-adding in Figure 1.

Fig 1. Value Adding Enterprises and Approaches (Revell, 1997)

Created added value places a strong emphasis on product quality, either enhancing the " intrinsic quality" of a basic product (i.e. productivity, usability, acceptability, taste etc), adding services to a basic product (extrinsic attributes/qualities such as further processing or packaging)), or improving the effectiveness of service delivery(eg direct customer contact). Systems of animal production which are perceived by consumers to produce higher quality products, such as traditional, extensive, grass-fed ruminants, rare-breeds and organic systems have a particular importance in this respect. The basic product already has a perceived intrinsic quality advantage which can be passed on to higher-value retail products.

The strong message that came through both in the workshop and the field trip the next day, which visited various key sites in the Rhön Biosphere Reserve (see FAUNUS, Issue 2), was that the effectiveness of all of these value-adding alternatives can be greatly enhanced when they are linked in with well co-ordinated regional plans for integrated development. Integrated development can provide a coherent context within which organic farming, nature management and other environmentally-inspired practices can realise material benefits, in terms of improved regional image, and increased tourism revenues, in addition to the benefits from increased product quality realised directly by individual farmers.

The Witzenhausen workshop demonstrated the need for LFA livestock systems to provide products which in some way may be differentiated from other alternatives on the market. There is a strong role for extensive and organic systems, and in areas blessed with natural resources and landscapes attractive to tourism, regional images may have a synergistic effect to further enhance returns to farmers.

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