Agricultural intensification of rainfed agriculture (Demeke et al, 1996)– especially of the dominant crop-livestock systems in the Blue Nile basin, management of the natural resource base and poverty alleviation have long been the targets of a vast array of research and development initiatives in the region. Such efforts have ranged from those targeting specific biophysical aspects – crop, livestock or natural resource technologies, to those focused on policy issues to those with a more integrated and market oriented approach.

The pastoral areas of Ethiopia are witnessing radical change in terms of both increasingly restricted mobility and access to vital resources. A cause and consequence of such constraints has been a move toward sedentarised forms of livestock and agricultural production. This is occurring in a political and socioeconomic vacuum, in which the customary institutions responsible for resource allocation and access to land are becoming weaker, and where the Ethiopian government has yet to develop a clear policy or strategy for resource distribution and tenure security in pastoral areas.

Livestock production in arid and semi-arid rangelands is a risky enterprise. Covariate risk of catastrophic livestock loss due to drought is the most critical uninsured risk facing livestock producers. These losses can lead to persistent poverty. We are trying to design an index based livestock insurance (IBLI) program as a viable means to help pastoralists in northern Kenya manage such covariate risk of livestock losses due to drought.

Farmers in mixed crop-livestock systems produce about half of the world’s food. In small holdings around the world, livestock are reared mostly on grass, browse, and nonfood biomass from maize, millet, rice, and sorghum crops and in their turn supply manure and traction for future crops. Animals act as insurance against hard times and supply farmers with a source of regular income from sales of milk, eggs, and other products.

Extensive grazing is the predominant form of land use on at least a quarter of the world’s land surface, in which livestock are raised on food that comes mainly from rangelands. The term livestock includes both domesticated animals such as cattle, sheep, goats, camels, horses, llamas and alpacas, and a broad range of wild animals kept for meat or game viewing. It is estimated that tropical grasslands alone cover 18 million square kilometres, where the natural vegetation is used by mobile animals requiring forage and water throughout the year.

Sheep production is an integral part of the subsistence crop-livestock systems of Ethiopian highlands and plays crucial role in economic development and poverty reduction. So far, there have been very limited efforts exerted to introduce and promote market oriented sheep production and hence the current income generating capacity of the sector is not at all encouraging. Therefore, reorientation of sheep production systems towards consumer preferences and demands through timely and comprehensive transformation need to be given due emphasis.

Thousands of livestock herders across the arid North Eastern Kenya can now rest secure, thanks to a new initiative that will shield them against loss of their livestock to drought. For the first time ever, a livestock insurance scheme has been introduced which will make use of satellite images to detect areas that could suffer from livestock loss.

Livestock systems globally are changing rapidly in response to human population growth, urbanization, and growing incomes. This paper discusses the linkages between burgeoning demand for livestock products, growth in livestock production, and the impacts this may have on natural resources, and how these may both affect and be affected by climate change in the coming decades. Water and land scarcity will increasingly have the potential to constrain food production growth, with adverse impacts on food security and human well-being.