# The Framework

Previous section The Changing importance of different production systems

The conceptual models: Driving Force-State-Response and Induced Innovation Frameworks

Two interlinked frameworks are used as the central organizing concepts for this study. The Driving Force-State-Response (DSR) framework is based on the environmental impact assessment model developed by the OECD (1996). This model consists of three major components which are described below: Driving forces, state and societal response, as detailed below and in Annex 2.

The Induced Innovation model holds that, over time, technological innovations and institutional changes are guided so as to make the most of abundant resources and economize on scarce resources. The model is a logical sequence to DSR, as the societal response (through policy changes) changes the relative abundance of the resources. For example, the introduction of a grazing fee in communally-owned rangelands, will increase the price of land and feed, and will therefore lead to more efficient feed use (earlier off-take, greater use of by-products). More examples will be given in the following chapters.

Driving forces

Driving forces cause changes to the natural resource base (OECD, 1996). In the case of livestock production, this can be a direct (or on-site) force such as increasing the number of grazing animals which may lead to trampling, depletion and pollution of water, the emission of greenhouse gases, and the loss of plant and animal genetic resources. Livestock production can also have an indirect (or off-site) force such as the expansion and intensification of cropland to satisfy the increasing demand for feed concentrates and this, in turn, may lead to erosion and pollution. A beneficial force may be the use of organic manure for fertilizer, or the use of livestock for traction, thereby reducing consumption of non-renewable resources.

While it is important to measure the impact of these forces, it is even more important to understand the underlying causes or the 'driving forces' themselves. Some of the causes are fundamental and inherent in the structure of a society, and go beyond the traditional domain of livestock policy (Young, 1996). Demographic pressure and food consumption habits clearly fall into this category. Other forces are more directly related to livestock production and are easier to change. Incentive policies for inputs used in livestock production (feed, water, energy), pricing of meat and milk and infrastructure development for livestock, fall into this category. They are called amendable forces. For example, infrastructure investments, credit and land tenure policies are important forces causing livestock pressure on tropical forests, and the differential tariffs for cassava in the European Union (EU) are significantly contributing to nutrient loading of soil and water in the Netherlands and northern Germany through increased intensive pig production. An analysis of the underlying pressures is thus of critical importance in understanding changes in the natural resource base.

State

The state of the natural resource base refers to the changes in environmental conditions that may arise from various driving forces. It is, in essence, an inventory of the existing condition of land, water, air and biodiversity. Pressures described in the previous section affect the state. The substantial void in objective and precise assessments of the current state of the resource base, as affected by livestock use, is one of the main reasons for the conjecture which surrounds the livestock-environment debate. This lack of accurate data has contributed to some costly investment blunders in international development aid. For example, the over-estimation of the degree of land degradation in the arid areas, has led to excessive investments in “desertification control”, at the expense of the much more serious, but under-estimated, land degradation in semi-arid and sub-humid areas.

The aggregate environmental pressure of industrial production systems is probably over-estimated in the public perception, especially if some of the positive indirect impacts (for example, reducing pressure on more fragile environments) are taken into account. However, the public perception of the excessive environmental pressure exerted by the industrial system has made this system the “scapegoat” of many environmentalists and has directed investment away from this system. Some of the issues related to the environmental assessment of livestock production systems are presented in Box 1.2 and Annex 3, while more detailed information is provided in Bauer et al., (1995).

Societal response: technology and policy options

Response refers to the reaction to actual and perceived changes in the environment. This can be through changes in farmer behaviour, i.e., through changes in input use and farm management practices and changes in food consumption patterns by consumers (OECD, 1996). Above all, these changes can be brought about through government action with the following instruments (Young, 1996):

- Education and motivation are essential to any environmental package. They are most appropriate for mobilizing public opinion and bringing about pressure on degraders. For example, pressure for change is more likely to be applied if public opinion is informed of the health problems associated with the increased nitrate levels which result from excessive manure production;
- Financial policies are more effective when costs external to the production system have to be reduced. They include the appropriate pricing of inputs. For example, if subsidies on inorganic fertilizers are too generous, there is a risk of excessive nutrient loading while, at the same time, available organic manure may be wasted. They cover also environmental levies, which are charged to pay for services to prevent or control environmental pollution, for example, of water sources by slaughterhouses;
- Policies relating to property will provide resource users with a tangible interest in the future consequences (including environmental) of their actions. The current strategy to strengthen traditional users' rights of commonly owned rangeland, to improve the ecological sustainability of the pastoral system is an example;
- Zoning is one of the most commonly used tools for alleviating potentially adverse siting of production and processing. It can also be an effective means of limiting livestock densities; and
- Regulations normally establishing maximum emission standards of pollutants (nitrate, ammonia, organic material) are very effective when dealing with strong institutions and clearly identifiable polluters.

Throughout the document, these policy instruments will be demonstrated within particular production systems, following one of the central themes of this study, i.e. correcting the underlying causes is more effective than addressing the symptoms.

Induced innovation

Changes in policies and regulations lead to changes in prices which consequently promote certain technological interventions. Resource constraints and income levels then largely determine the scale and flexibility of these interventions. This leads to the second conceptual framework, the “induced innovation” framework of Hayami and Ruttan (1985). This model explains the evolution of production technologies in response to resource endowment and institutional factors. Runge (1987) added non-market forces such as environmental impacts and regulatory responses to these factors.

Technological options and institutional factors normally change with resource availability, income levels and regulations. The shift in production technology is being driven in part by institutional factors, specifically by responses to regulatory and financial instruments. For example, if feed, such as cassava chips, becomes less expensive because of special import arrangements, greater “feed intensity” will be favoured. On the other hand, if water becomes more expensive as environmental concerns result in a higher implicit price for water (through regulations on manure disposal), technologies that save water will be favoured. Thus outside forces will determine what is possible.

Where feed is scarce, water is under-priced and/or relatively abundant, and land is unregulated (as might be the case in developing countries), different opportunities exist for producers. Thus, in low income countries, the technology of production is largely determined by available natural resources. In higher income settings, an additional set of possibilities and constraints is introduced due to the existence of subsidies (e.g. on feed) and environmental regulation (e.g. restriction on water and land use).

Next chapter

[Livestock & Environment Toolbox Home]
[Livestock & the Environment - Finding a Balance Home]