Pro-Poor Livestock Policy Initiative A Living from Livestock Research Report 1 Ref: 07-11; July 2007 Pro-Poor Livestock Sector Development in Latin America: A Policy Overview Ugo Pica-Ciamarra, Joachim Otte, Jeroen Dijkman Abstract Since smallholders make up the large majority of the rural poor in Latin America, productivity gains and increased returns to their assets could contribute to widespread poverty alleviation. One such opportunity may be offered through diversification into high-value agricultural products, such as fruits, vegetables, meat or dairy products. This paper presents a case for investing public resources to support smallholder diversification and specialisation into high-value livestock products, reviews the current livestock policy framework in the region and proposes a number of institutional changes aimed at tapping into increasing the contribution of livestock sector development to socially desirable outcomes. I. Introduction Rural poverty is widespread in Latin America and equitable rural development is thus key to achieving the Millennium Development Goals (MDGs) in the region. Though there is a plethora of strategies towards pro-poor rural development, in recent years, Latin American governments have increasingly supported the diversification and specialization of smallholders into high-value agricultural products, such as vegetables, fruits, meat and milk, as a promising pro-poor rural development strategy. The objective is to make smallholders tap into remunerative agricultural markets through satisfying food quality and safety standards, labelling products, establishing contracts with traders, processors, supermarkets and agro-exporters, and thereby get a foothold on a pathway out of poverty (Céspedes and Paz, 2005; FAO, 2004a). In spite of notable successes, the largest part of Latin American smallholders is still excluded from high-value