Livestock sector contributes to about 20% of the net state domestic product from agriculture. The sector is gaining prominence due to higher income elasticity of demand for its products - milk, meat and eggs. The livestock population is witnessing a change in their composition. The following table and the figure illustrate these changes. The decline in cattle population started during the mid-eighties continued sharply and there is a decisive shift towards buffaloes. The latter may soon overtake the number of cattle population in the state. This in a way indicates up-gradation of the quality of the stock. Increase in the demand for milk (the income opportunities) and reducing access to quality commons might be the prominent reasons for this shift towards buffaloes. In the spirit of a participatory planning approach the primary stakeholders are to identify issues related to livestock in watershed programs. But the practice and the facilitating mechanisms do not explicitly consider livestock development as an integral part of watershed development. However, there might be impacts on livestock following watershed treatment, which are not documented adequately. The major constraints in promoting livestock in watersheds might be lack of clear methodologies for action planning, good field examples of practice, resource material and appropriate administrative procedures - planning, monitoring etc. These efforts would build on the sensitivity that already exists in some significant pockets of watershed policy making. Livestock and agriculture are considered here together as they are dealt with together in the A.P Policy documents. The growth engines identified in the Vision 2020 exercise by the state are the agricultural sector and will comprise rice, poultry, dairy, horticulture, fisheries and agro-industry. In addition, the State will focus on developing other areas in which it has considerable strengths such as fisheries, seeds, oil-seeds, cotton, sugarcane, tobacco and maize. Setting a target real growth rate for agriculture sector at 5.7%, the strategy paper of agriculture and allied departments expects to reduce the share of agriculture in employment. High potential, value addition, export led and growth are the key words in the policy. By providing dairy value chain, institutional and policy support, and with a focus on large scale commercial dairy development the state expects to become one of the three top milk producers in the country. A.P already has a lead in poultry and fisheries sectors. Horticulture is another area of focus in the state.

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