Modern primary industry makes obsolete the conventional analysis of private and social performance. This is due to the dominance of chain failure as opposed to the more familiar market failure. This paper makes the case that value addition dominates aspirations for primary industries, and vertical coordination and shifts in commercial power balances feature in the sharing of bene fi ts within value chains. Moreover, complexity in chain relationships and some particular features of primary industry bring challenges to forward planning and concerted effort. Value addition in New Zealand's forestry and wood products' industry presents several such challenges, and these are examined with a qualitative system dynamics model. Potential policy responses that eliminate chain failure are discussed in association with the Australian beef industry research model. The paper advocates joint industry-university-government action in terms of research and skills development.

The liberalization of beef exports in Botswana is hotly debated among policy makers and relevant value chain actors. While some policy makers argue that such a move might increase prices for producers and make beef unaffordable for consumers, others suggest an open market would reduce the profitability of the beef sector in Botswana. At the same time, these impacts will be mediated by the presence of animal disease and the availability of sufficient feed and water. In this paper, we constructed an integrated system dynamics (SD) model that captures the feedbacks between the biological dynamics of cattle production, the economics of animal and meat marketing and trade, and the impacts that environmental pressures such as rainfall and animal disease have on the system. We used this model to run a series of scenarios associated with market liberalization and animal health shocks to quantify their impacts throughout the value chain, taking into account the feedbacks between biology, markets, and environment on the value chain itself. This approach allows for a holistic evaluation of policy options on different chain actors and whole chain performance, and provides a knowledge base for prioritizing interventions. Model results suggested that although disease control policies benefit all value chain actors, gains from market liberalization come at the expense of substantial losses to Botswana Meat Commission (BMC) and its contracted feedlots. They also suggest that combining market liberalization policy reforms with better animal disease controls greatly improved the financial performance of all value chain actors.

Poverty is widespread in Africa, but the continent is fast growing, with the consumption of animal protein skyrocketing, in particular for relatively low-value, low-processed livestock products. Meanwhile, in rural areas, the majority of households are livestock keepers, many of whom are poor. This growth in demand for animal protein can provide major business opportunities for livestock producers, with implications for poverty reduction. While there is heterogeneity among livestock keepers, clustering them into homogenous groups is useful to guide policy and investment decisions that stimulate a market-driven and inclusive growth of the sector. A small share of livestock keepers, from between 5 to 20 percent, depending on the country, can be considered business-oriented with incentives to expand their livestock production and tap into the growing market for animal protein. These keep relative large herds and derive a significant share of their cash income from accessing and utilizing livestock markets. The remainder of livestock keepers can be defined as livelihood-oriented: they keep animals more for the many livelihoods services they provide - such as insurance, manure and hauling services - than for selling meat, milk and other livestock products to the market. The reason is simple: on average, they keep 1.60 Tropical Livestock Units (TLUs), which is equivalent to about three beef cattle per household or about 0.6 TLU per household member, and, therefore, they cannot derive large benefits from regularly selling their surplus production to the market. Policies and investments aimed at enhancing the contribution of livestock to economic growth and poverty reduction should consequently adopt a dual strategy of targeting livelihood-oriented and business-oriented livestock keepers, who have diverse incentives to keep animals. There are, however, major information gaps which constrain the formulation of effective policy and investment decisions.