Pastoralism, Livestock and Growth in Ethiopia

Regional dialogue on Stronger food security and nutrition in drylandand pastoral areas: harnessing the potential of the New Alliance

Addis Ababa, 10 June 2014

Overview

• Trends and drivers

• Challenges and solutions Pastoralist areas

Trends: domestic livestock trade• Pastoralist areas - main suppliers of livestock for the population

living within and adjacent to ~60% of Ethiopia• Suppliers of :

– 20% of the plough oxen – stall-fed cattle to high end butcheries – breeding stock for farmers, donor/government projects – and camels to mid-altitude farmers

• This contribution from pastoralist areas is often unnoticed at policy level

Export trends: foundation and driversLivestock-specific

National rinderpest eradication (to May 2005)

Generic Reversion to more liberalized trade environment (from 1992)• industry associations• domestic price deregulation• more liberalized foreign trade• streamlining bureaucracy for exporters• more liberal investment and labour lawsImproved roads and mobile phone network

Private sector facilities – abattoirs, holding grounds etcPrivate feedlots, increased market stratification

Livestock-specific

Robust pastoralist livestock production system, responsive to market opportunities (from 1920s)

DEMANDS PRICES

Trends in live animals and meat export, Ethiopia2005-2013

Year Live animals Value ($1,000) Meat (tons) Value ($1000)

2005/06 163,000 27,259 7,717 15,598

2006/07 234,000 36,507 7,917 18,448

2007/08 298,000 40,865 5,875 15,471

2008/09 150,000 77,330 6,400 24,480

2009/10 334,000 91,000 10,000 34,000

2010/11 472,041 148,000 16,877 63,200

2011/12 800,000 207,100 17,800 78,800

2012/13 680,000 150,000 16,500 68,000

Source: National Bank of Ethiopia

Amount of Ethiopian meat exported increased up to 2.3 times from 2005 to 2013cf. US beef exports increased 2.4 times in same period www.usmef.org

Recorded Exports of Livestock, Berbera (“from or through the Somaliland Protectorate”) 1927-1951a

19271928

19291930

19311932

19331934

19351936

19371938

19391940

19411942

19431944

19451946

19471948

19491950

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

Num

ner o

f ani

mal

s

2011-2013b

a Hunt (1951)b Somaliland Chamber of Commerce (2014)

Proxy data for Ethiopia’s informal exports

20112012

2013

• Between 1927 and 1950 Berbera exported ~ 3x more animals/year than Ethiopia exports today • Between 2011 and 2013 Berbera exported ~ 5x more animals than Ethiopia• Other transit routes via Djibouti , Puntland, Somalia and Sudan• Kenya is a terminal route

Policy issues • In 40 years trade policies have shifted from free market to command

economy and then to liberalized system• Strong progress in formal exports – but volumes and values still far less

than informal exports• General investment policy is skewed towards crop production rather than

livestock (e.g. see GTP factsheet)• The pastoral production system is performing well - but no substantial

investments in commercial livestock farms in non-pastoral areas

Critical issues: Coordination

Challenges• The mandate for live animal markets

has changed twice between the MoA and MoT since 2005 including a new live animal markets proclamation by the latter

• MoI in charge of export abattoirs; • MoA role is limited to production

and health aspects • The MoF sets VAT on livestock feed –

despite critical feed shortage• Federal – regional harmonization

Solutions• Develop a harmonized “joined up”

national policy for livestock trade• Assign clear leadership and

coordination role to one Ministry• Define roles of the new ATA Livestock

Team• Strengthen national – regional

coordination

Critical issues: LandChallenges• Large tracts of land for crop

production not livestock• Growth in the livestock sector can

only be achieved if there are commercial livestock farms that provide sustainable services to other livestock keepers (technology, fodder etc.)

• Such commercial farms also rely on pastoralists for supply of young stock

• Myths around ranches – poor performance in drylands

Solutions?• Make land available for commercial

farms in areas in proximity to pastoralist producers

• Raise awareness of limitations of ranches

Critical issues: FeedChallenges• Further growth in the sector

needs better quality and availability of animal feed

• VAT issues:– VAT is applied in principle on

value added products; livestock feed ingredients are products, the value of which has been degraded

– Livestock feed is used for adding the value of livestock on which VAT is applied

• Wide-scale use of safety net feed to feed livestock?

Solutions?• Attract investors to engage in

fodder, edible oil and oil cake production

• Regulate animal feed quality• Build on positive trend of wider use

of feed by pastoralists• Integrate feed policy into overall

livestock development and trade policy

• Remove VAT on livestock feed• Review food distributions in PSNP if

food is fed to livestock

Critical issues: Preventable livestock mortality

Challenges• Preventable disease-related losses

in pastoralist areas ~ 3.6 million animals/year

• This is > 5 times the number of animals exported formally

• Good progress with private veterinary services in pastoralist areas but key concerns over: vaccination policies and

strategies quality control of

pharmaceuticals

Solutions?• Strengthen capacity of federal

veterinary drug administration e.g. random testing of pharmaceuticals

• Support stakeholder review of vaccination policies and strategies, supported by epidemiological and economic analysis

• Strengthen institutional support to private services, including CAHWs

Critical issues: Regional tradeChallenges• Aligning national policies with

regional free trade policies of AU, IGAD and COMESA

Solutions?• Support economic analysis of

livestock FTA, especially potential forex gains

• Test the COMESA Green Pass system for livestock

• Revisit, adapt and expand experiences from the EXCELEX project

• Aimed to create a win-win formalized cross-border trade Ethiopia-Djibouti & Ethiopia-Somaliland

• Led to an agreements between Ethiopia, Somaliland and Puntland• Somali traders deposited a proportion in hard currency for livestock they purchase • Enabling the traders to move purchased livestock through official custom posts• The short life span of the project (2 years) did not allow the conclusion of a similar

deal with Djibouti and the deal with Somali traders was compromised over time

Lesser issues/misunderstandings• Market information systems – mobile phones far more cost effective in

obtaining information by market actors cf. “market information systems”• Market yard infrastructure – not critical or useful for stimulating supply

and demand in pastoral areas (Kenya, Ethiopia, Sudan)• Transboundary animal diseases

• Rinderpest eradication pivotal for Ethiopian formal exports of beef and live cattle from 2005

• Export earnings to 2013 justify investments in rinderpest eradication• But rising exports from 2005-2013 associated with limited change in status of

other TADs

Increased investments in “TAD control for trade” needs: • Prior economic analysis to show added value e.g. by accessing new markets?• Analysis of competitiveness• Analysis of risk e.g. changing private sector standards in importing countries

Thank you