able to tap the powerful market of the supermarkets. There­fore, it is crucial that government and donor agencies help small farmers and entrepreneurs to make the investments in equipment, management, technology, commercial practice and the development of strong and efficient organizations to meet the market requirements.
     Global buyers can have a role to play in assisting sup­pliers to improve practices and become compliant. The standards need to be flexible and interwoven with local conditions if they are to benefit poor workers. They must also involve local stakeholders who reflect the interests of workers in the process of standards setting and monitoring. The policy challenges on standards include standard setting, monitoring  compliance,  providing  assistance  to  achieve compliance and sanctions on non-compliance. Much de­pends on how standards are implemented, monitored and verified (IDS, 2003).
     Thus, major conditions for successful interlocking be­tween agribusiness firms and small producers include in­creased competition for procurement instead of monopsony, guaranteed market for farmer produce, effective repayment mechanism, market information for farmers to effectively bargain with  companies,  large  volumes  of transactions through groups of farmers, for lowering transaction costs and no alternative source of raw material for firms (Kristen and Sartorius, 2002).
     The main requirements of small farmers in this chang­ing environment are better access to capital and education. Management capacity is as important as physical capital but is the most difficult thing to provide. Further, collective ac­tion to deal with scale requirements needs to be designed to satisfy new product and process standards or to avoid exclu­sion from the supply chain. Collective action through coop­eratives or associations is important not only to be able to buy and sell at a better price but also to help small farmers adapt to new patterns and much greater levels of competi­tion (Schwentesius and Gomez, 2002).
     Small farmers also require professional training in mar­keting and in technical aspects of production. There is also a need to strengthen small farmer organizations and pro­vide technical assistance to increase productivity for the cost competitive market, provide help in improving quality of produce and to encourage them to participate more actively in the marketing of their produce in order to capture value added in the supply chain.
     On the other hand, regulation of supermarket chains to control or mitigate their market power can be an effective tool to ensure the presence of small growers in value chains as seen in the case of the banana trade regime in the pre-WTO period in the EU policy, single channel (monopoly) exports by producer bodies in some exporting countries like South Africa and regulation of domestic import markets in France (Gibbon, 2003).
     Though there are concerns about the ability of the small farms and firms to survive in the changing environment of agribusiness, there are still opportunities for them to exploit product differentiation with origin of product or organic products and other niche markets. However, the major route has to be through exploitation of other factors such as ex­ternal economies of scale through networking or clustering

and such other alliances like contract farming (Kirsten and Sartorius, 2002). The experience of contract farming across the globe suggests that it is not the contract per se which is harmful as a system but how it is practiced in a given con­text. If there are enough mechanisms to monitor and use the contract for developmental purposes, it can certainly lead to a betterment of all the parties involved, especially small and marginal farmers (Singh, 2006b).

3.4.9     Livestock
International trade accounts for only 8-13% of total produc­tion of livestock products. It is high in bovine and poultry meat and milk and low in pig meat. Livestock and Livestock Products (LLPs) account for about 1/6th of value of all ag­ricultural trade. Meat exports make up about half of this total value with bovine, pig and poultry meat as three major types. The subsectors of pig meat and poultry meat have grown by 6 and 14% during the last decade. Dairy products account for 1/3rd of value of LLP exports and have grown at the rate of 3% during the last decade (FAO, 2001).
     Major global players in exports of LLPs are Australia, USA, Canada and EU in beef and pork and Brazil, EU, China and Thailand in poultry (Perry et al., 2005). Developing countries are net importers of LLPs with dairy products and poultry dominating the scene. Though least developed coun­tries have more pastureland per head of rural population than in the developing countries, but stocking density and meat production per animal are lower. Still LLPs account for 4% of their GNP. Thus they may have comparative advan­tage in small ruminant production but productivity is lower (FAO, 2001).
     Further, a large part of the global trade in livestock products especially dairy is intra-industry trade which is un­der the control of large global players. In many countries in Asia, export trade is with a few large players who are able to meet new quality standards like SPS measures. Still, even these large players have suffered from SPS restrictions in some markets e.g., UAE banning Indian meat imports from 10 firms by name for not meeting the hygiene standards. There is also growing vertical coordination of the sector es­pecially in chicken and pigs where large processors and re­tailers work directly with primary growers of such products who essentially provide all inputs and the grower gets wages for his/her labor and supervision costs. In some countries like Thailand, there is almost 100% contract production in poultry and piggery sectors. In this process, small growers are getting marginalized due to small scale and lack of bar­gaining power due to lack of effective producer organiza­tions. In some places like India, producers' organizations have been able to bring large number of milk producers under a common platform and are significant players in do­mestic markets and even are foraying into global markets.
     Like crop sector, subsidies to producers in developed countries, especially EU, remain an obstacle to fair trade in livestock products. Even in ESAP, there are large exporters i.e., Australia and New Zealand which are globally com­petitive and do not subsidize their livestock producers. Once subsidies in the developed world go, developing world can benefit from freer trade in livestock products. Dairy ex­ports are likely to increase from Oceania, South Asia, South