Improving trade in large ruminants and products by transboundary animal disease control in Lao PDR J.R. Young 1 , S. Nampanya 1 , S. Khounsy 2 , R.D. Bush 1 and P.A Windsor 1 1 Faculty of Veterinary Science, University of Sydney, Camden, NSW 2570, Australia 2 Department of Livestock and Fisheries, Luang Prabang, Lao PDR Email: (J.R. Young) jyou1412@uni.sydney.edu.au Abstract - Within the Greater Mekong Subregion (GMS) the nation of Lao PDR has a small population of ~6.3 million people and a relatively large population of large ruminants (cattle and buffalo) at ~2.7 million head. With the growing demand for red meat in South-East Asia driven by a rising middle class and the associated changes in dietary intake, Lao smallholder farmers have the opportunity to satisfy this demand provided key constraints are addressed. Recent research has highlighted a series of best practice interventions directed at the smallholder level to improve animal health and production. Animal movement and trade have been identified as a major risk factor involved in transboundary animal disease (TAD) transmission including foot and mouth disease. Hence, understanding the supply chain is important for effective TAD control. The results of a survey of 32 large ruminant traders in northern Laos in 2011 were matched to a longitudinal production survey from 6 villages in northern Laos to develop a value chain analysis. The 32 traders provided details on 8,796 large ruminant trades, operating locations, large ruminant purchase prices, transport methods, major costs, livestock destinations and trader views on major constraints to development of the large ruminant market. The 2011 farm gate value of the national large ruminant herd was estimated as USD 835.8 million based on trader purchase price and village herd production data. As improvement of large ruminant production has been linked to reducing regional rural poverty and food insecurity in smallholder communities through opportunities for business development and rural employment, addressing both TADs and the underdeveloped market in the GMS is important. Whilst control of TADs will need to remain a medium term priority, further research is needed to ensure that market development remains aligned with disease control efforts. Keywords; cattle, buffalo, FMD, livelihoods, rural poverty, and food security I. INTRODUCTION The Lao People’s Democratic Republic (Lao PDR or Laos), together with Cambodia, Myanmar, Thailand, Vietnam and (the Yunnan Province of) China, make up the six nations of the Greater Mekong Subregion (GMS), a natural economic area bound by the Mekong River basin, consisting of 2.6 million km 2 and inhabited by ~326 million people [1]. Laos has a population of ~6.3 million people, of which 85% are involved with agricultural activities [2]. The total land area is 236,800 km 2 , and constitutes three main farming systems predominated by mountainous (~80%), upland and lowland. Despite the majority of the population actively involved in agriculture, the contribution to gross domestic product (GDP) was 30.8% in 2011 [3]. Laos is one of the poorest countries in in the world, ranked 138 th on the United Nations Human Development Index [4]. Although significant improvements have been made in the last two decades, rural poverty remains an important issue with an estimated 27.6% of people living below the national poverty line [5]. While rice production remains the primary contributor to the agricultural sector, livestock play an important role in smallholder farm systems, often serving multiple purposes including sale for beef, wealth storage, fertiliser, draught and for cultural festivities. Laos has a substantial national large ruminant population with 1,520,300 cattle and 1,197,100 buffalo in 2011, yet the market remains underdeveloped. Smallholder farmers own greater than 94% of the nations large ruminants, typically owning less than 5 head [6,7]. Increased livestock production has been identified as a key means of alleviating poverty in developing countries [8,9,10] as livestock products benefit the poor by alleviating the protein and micronutrient deficiencies prevalent [8]. Furthermore, livestock typically contribute to environmental sustainability in mixed farm systems that strike a proper balance between crop and livestock intensification, through the provision of manure for fertiliser and draught power to sustain intensive crop production [8]. Smallholders’ participation in markets is crucially important for improved food security and poverty reduction [11]. Smallholder agriculture is characterized by small production volumes of variable quality that reflect limited access to inputs and finance, low levels of investment and limited access to, and knowledge of, improved agricultural technologies and practices [11]. Limited smallholder participation in markets is not necessarily a result of inadequate commercial orientation per se, but the result of constrained choice in a risky environment [11]. Smallholders need to be linked vertically with processors and marketers of perishable products to combine the environmental and poverty alleviation benefits of smallholder production with the economies of scale and human health benefits achieved through larger scale processing [8]. Producers, traders, and processors may find it difficult to access productive assets such as credit and refrigeration facilities and information about microbial infection prevention [8]. Inadequate infrastructure, high costs of storage and transportation and non-competitive markets also limit the production of a marketable surplus [11]. Attempts to improve smallholder productivity will have limited success if smallholder linkages to markets are not strengthened simultaneously [11]. The large ruminant market is amidst transformation in the GMS, driven by a sustained consumer demand for protein known as the ‘livestock revolution’ [8, 12]. Animal movement, and associated movement pathways, is highly dynamic with major changes evident in recent years, particularly with the emergence of high consumer demand in both Vietnam and China [13]. Per capita meat consumption increased from 16 to 43 kg in China and from 11 to 18 kg in South-East Asia between 1983 and 1997, and is projected to grow at 3.1% and 3.0% respectively to reach 73 kg in China and 30 kg in South- East Asia by 2020 [8]. Specifically in the developing world poultry consumption is predicted to increase at 3.9% p.a.,