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Access of the rural poor to goods and services to control Foot-and-Mouth Disease (FMD)
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Access of the rural poor to goods and services to control Foot-and-Mouth Disease (FMD)

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Access of the rural poor to goods and services to control Foot-and-Mouth Disease (FMD) …

Access of the rural poor to goods and services to control Foot-and-Mouth Disease (FMD)
By R. Emerson Tuttle
European Commission for the Control of Foot-and-Mouth Disease (EuFMD)

Barriers, opportunities, and the role of the private and public sectors and international organizations in achieving change.
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New investments in developing countries at the Base of the Pyramid (BoP); Is there a potential market for FMD control?; What are the barriers preventing access to quality FMD control options?; Business models to overcome existing barriers; An evolving role for the public sector and international organizations.



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  • 1. 40th General Session of the EuFMD • 22-24 April 2013, Rome (Italy) Access of the rural poor to goods and services to control Foot-and-Mouth Disease (FMD) Barriers, opportunities, and the role of the private and public sectors and international organizations in achieving change R. Emerson Tuttle European Commission for the Control of Foot-and-Mouth Disease (EuFMD) Food and Agriculture Organization of the United Nations August 1, 2013
  • 2. + Agenda  Defining the problem  Conclusions  New investments in developing countries at the Base of the Pyramid (BoP)  Is there a potential market for FMD control?  What are the barriers preventing access to quality FMD control options?  Business models to overcome existing barriers  An evolving role for the public sector and international organizations 2
  • 3. + The problem  Rural livestock keepers have minimal – if any – access to control options for FMD  Governments manage risk for constituents, leaving individuals to suffer from inefficiencies  How can the current model be improved? 3 http://www.theguardian.com/global-development/2011/jan/21/farm-africa-animal-healthcare-franchise
  • 4. + The current paradigm Increased circulation of virus Public response Foreign aid Disease outbreak -Decreased resilience -Negative livelihoods impact -Decreased market access -Limited ability to trade products internationally Temporary management Disease outbreak seen as the problem ? 4
  • 5. + Towards a new paradigm  Current paradigm does not properly work  Animal diseases are widespread  Governments need to improve animal disease control and management systems, but resources are limited1  What is the role for the private sector to complement public service animal health delivery systems?  In this presentation: FMD control in East Africa and the scope for a private sector role 5
  • 6. + Conclusions  There is a market for rural FMD control  Numerous barriers (demand-side and supply-side) prevent this market from functioning  Current business models can be adapted for more effective FMD management  Governments must evolve to facilitate private investment in disease control  International organizations must design a framework for understanding socioeconomic barriers to access  An optimum balance of public/private FMD control provision must be found! 6
  • 7. + Evidence  Rapid and continued growth projected for Sub-Saharan Africa2  An emerging trend of privatization in Africa  Viewing the poor as a conscious consumers as opposed to victims  Challenge the idea that the poorest are not willing to pay for goods and services  Design interventions targeting those at the BoP  Many consumers – low purchasing power  Impact investments also include a social dimension 7 http://moonofthesouth.com/kenyan-media-accused-stereotyping-2/
  • 8. + Evidence:Wealth at the BoP?  Refers to a heterogeneous group of consumers in the market with relatively little purchasing power  Globally: 4 billion people living on <$2.50/day  Ethiopia: $84 billion of wealth in the BoP3, 22 million rural poor  Kenya: 15 million rural poor4  Target this consumer class through high volume/low value business models  Market-based solutions (MBS) to development 8 http://www.generationim.com/sustainability/challenges/real-needs-base.html
  • 9. + Evidence: Impact investments  Interventions that have a positive social/environmental benefit while securing financial returns5  Examples:  Microfinance loan programs  Clean water delivery systems  Information technology networks  Energy provision  Sale of desired food commodities, nutritional supplements  Hygiene products and public health improvements 9 http://www.thankyouwater.org/
  • 10. + No MBSs in animal health:Why?  Inaccessible/non-quantified market  Demand- and supply-side barriers preventing proper market functioning  Intricacies of FMD require innovation and adaptation:  Genetic variation of the virus  Cold chain requirement  Rapid spread  Sub-clinical or chronic infection 10
  • 11. + FMD control:What is the potential market value? 11 http://www.oie.int/wahis_2/public/wahid.php/Diseaseinformation/Diseasedistributionmap Outbreak distribution: Jan-Jun 2012
  • 12. + FMD control:What is the potential market value? 12 Robinson and Siembieda, 2011
  • 13. + FMD control:What is the potential market value?  Focus on cattle in the East African region, specifically Ethiopia and Kenya:  Ethiopia – 54 million head6  Kenya – 17 million head7  14.5 million dairy cattle combined  Business of $142 million per year for control strictly through vaccination 13
  • 14. + FMD control: Are the potential consumers willing to pay?  The market: rural cattle-owning households (not large producers)  Small farmers keep the large majority of the cattle stock  88% of rural households in Ethiopia rely on livestock production8  92% of such households own cattle  Non-homogenous group differentiated across three major characteristics:  Poverty  Herd size  Magnitude of importance of livestock to income 14 All rural householdsLivestock-owning householdsCattle-owning rural households 81% of total, ~61.5 million individuals in Ethiopia alone
  • 15. +A new paradigm Increased circulation of virus Disease outbreak -Decreased resilience -Negative livelihoods impact -Decreased market access -Limited ability to trade products internationally Demand-side barriers Supply-side barriers Poor access of rural livestock holders to quality FMD control options Minimal/no preventive rural control Underlying socioeconomic issues create the environment for disease to persist 15
  • 16. + Barriers to access: Demand-side 1) Lack of trust in government services (by consumer class) 2) Lack of trust in products 3) Limited resources 4) Political voice of those at the BoP 5) Lack of knowledge of local FMD situation 6) FMD as one of many concerns 16
  • 17. + Barriers to access: Supply-side 1) Exclusive government capture of FMD control 2) Spatial distribution of consumers 3) Temporal distribution of demand 4) Vaccine requirements 5) Limited access to appropriate epidemiological info 6) Impediments to pharmaceutical importation 17
  • 18. + Building trust: Sidai Africa9  Franchise-based social enterprise in rural Kenya  Operates under full cost-recovery from keepers  Establish trust amongst consumers through brand recognition  Liaise with suppliers to provide appropriate and quality goods 18 http://www.sidai.com/index.php?page=aboutus
  • 19. + Breaking barriers: Demand-side 1) Lack of trust in government services (by consumer class) 2) Lack of trust in products 3) Limited resources 4) Political voice of those at the BoP 5) Lack of knowledge of local FMD situation 6) FMD as one of many concerns Supply-side 1) Exclusive government capture of FMD control 2) Spatial distribution of consumers 3) Temporal distribution of demand 4) Vaccine requirements 5) Limited access to appropriate epidemiological info 6) Impediments to pharmaceutical importation 19
  • 20. + Streamlining disease information: Vovixa’s Alerta System10  Data management system developed to eliminate inefficiencies in Peruvian health data reporting  Paper system = lag-time, data entry error  Telecom system = instantaneous, direct contact from the field to the central government (and vise versa)  Use of local community health workers as mobile reporting hubs 20
  • 21. + Breaking barriers: Demand-side 1) Lack of trust in government services (by consumer class) 2) Lack of trust in products 3) Limited resources 4) Political voice of those at the BoP 5) Lack of knowledge of local FMD situation 6) FMD as one of many concerns Supply-side 1) Exclusive government capture of FMD control 2) Spatial distribution of consumers 3) Temporal distribution of demand 4) Vaccine requirements 5) Limited access to appropriate epidemiological info 6) Impediments to pharmaceutical importation 21
  • 22. + Other examples  Una tantum voucher system for vaccination with a high quality ‘experience’ good  Stimulate demand through positive experience  Address issues of: trust in products, limited resources, temporal distribution of demand  Aggregation platforms: dairy cooperatives  Increase purchasing power through network of livestock owners  Reduce transaction costs for consumers AND suppliers  Address issues of: limited resources, political voice, spatial distribution of demand  Mobile service delivery platforms:  Address issues of: spatial distribution of demand, (vaccine requirements) 22 http://www.opportunity.org/ http://www.heifer.org/eadd/
  • 23. + An expanded role for the public sector role  Shift from a delivery model to a regulatory model:  Information provider  Bolster purchasing power  Encourage investment in animal health  Develop institutional framework  Fill in service delivery gaps that private sector cannot reach 23 http://ccafs.cgiar.org/sites/default/files/pastoralist_sossahel.jpg?1345797745
  • 24. +Provider of FMD information  For livestock keepers:  Local FMD conditions  Preventive management options  Product quality and regulations  For suppliers:  Number of animals requiring vaccination  Distribution of consumers  Relevant FMD epidemiology 24 http://www.africom.mil/Newsroom/Article/8615/ugandan-us-health-workers-come-together-for-animal
  • 25. + Purchasing power  Support aggregation and microfinance platforms  ‘Smart’ subsidies:11  to livestock keepers to incentivize preventive management  to service providers investing in rural control  sub-contracting of private veterinarians to work in rural areas 25
  • 26. + Encouraging private investments in animal health  Provide incentives to businesses to devise/test innovative business approaches to FMD control  Loans at preferential rate  Grant funding  Tax rebates  Collaterals  Establish innovative private-public partnerships to test different methods for effective FMD control, and animal disease and control management in general 26
  • 27. + The role of international organizations  Incentivize governments to shift towards a model that includes private sector involvement:  Provide simple tools for analysis of socioeconomic barriers  Integration with the Progressive Control Pathway (PCP)  Develop systems for common vaccine registration  Support harmonization at the regional and international level 27
  • 28. + Acknowledgements  Keith Sumption  Ugo Pica-Ciamarra  EuFMD team: Eoin Ryan, Marko Potocnik, Nadia Rumich, Gregorio Torres, Lily Polihronova, Manuela Zingales, Rossana Cecchi, Cecile Carraz  Mokganedi Mokopasetso, Nick Lyons, Alasdair King, Christie Peacock, Carolyn Benigno, Mohinder Oberoi 28
  • 29. + References  1) Vosloo, W, ADS Bastos, O Sangare, SK Hargreaves and GR Thomson. 2002. Review of the status and control of foot and mouth disease in sub-Saharan Africa. Rev. sci. tech. Off. int. Epiz 21 (3): 437-449.  2) Hatch, G, P Becker and M van Zyl. 2011. The dynamic African consumer market: Exploring growth opportunities in Sub-Saharan Africa. Accenture. 44pp.  3) Hammond, AL, WJ Kramer, RS Katz, JT Tran and C Walker. 2007. The next 4 billion: Market size and business strategy at the base of the pyramid. World Resources Institute and International Finance Corporation Report. 164 pp.  4) World Bank. 2013. World Databank: World Development Indicators for Ethiopia and Kenya, 2005-2011. Accessed on 23 June, 2013 at: http://databank.worldbank.org/.  5) Clark, C, J Emerson, J Balandina, R Katz, K Milligan, R Ruttman and B Trelstad. 2012. Investing for impact: How social entrepreneurship is redefining the meaning of return. Credit Suisse and the Schwab Foundation for Social Entrepreneurship. 58pp.  6) Central Statistics Agency (CSA), Federal Democratic Republic of Ethiopia. 2013. Agricultural sample survey volume II: Report on livestock and livestock characteristics (private peasant holdings). Addis Ababa, Ethiopia. 194pp.  7) Kenya National Bureau of Statistics (KNBS). 2009. Livestock population census data. Accessed on 16 June, 2013 at: http://www.knbs.or.ke/censuslivestock.php.  8) CSA. Federal Democratic Republic of Ethiopia. 2012. Living Standards Measurement Study – Integrated Survey on Agriculture (LSMS-ISA): Ethiopia rural socioeconomic survey. Addis Ababa, Ethiopia. 4pp.  9) Sidai Africa Ltd: Tunza Mifugo Yaka. 2013. Accessed on 10 June 2013 at: http://www.sidai.com/.  10) Casas, C, WC Lajoie, and CK Prahalad. 2006. The Voxiva story. Accessed online on 6 June 2013 at: http://www.mit.edu/~gari/teaching/prahalad_sec_Va.pdf.  11) Pica-Ciamarra, U, J Otte and C Martini. 2010. Livestock sector policies and programmes in developing countries: A menu for practitioners. Pro-Poo Livestock Policy Initiative: A Living from Livestock, FAO. Rome, Italy. 150pp. 29
  • 30. + Questions? 30
  • 31. + Discussion points  Additional demand barrier: what of the research pointing to the fact that individuals do not see the benefit of vaccination?  EuFMD trainings point otherwise: there are individuals who are able to pay for control that would be interested in doing so given the opportunity  Also, papers such as Barasa et al. 2008 Jibat et al. 2013, and Radeny et al. 2006 suggest that there is a benefit to vaccination, and livestock keepers are shown to have an increasing awareness and interest in FMD control  Comments on Sidai: massive international investment to start the program, issue of monopolization and control of many sectors (credit, advice, animal health, etc.), crowding out local provision  Not as cut-and-dry, issues are present in this model as well, yet international donors providing an investment in market functioning in such a way displays a shift in the mindset that may prove useful to explore 31
  • 32. + Discussion points (continued)  How can we influence ministries in these countries to change their policies?  Easier to do with a government interested in foreign export  Provide a concrete and solid economic incentive or argument displaying the benefits  Be better in connecting development goal desires with animal health means – investments in this sector are surely tied to these goals, yet better outreach to this end is needed  Shift focus from disease to services  What is needed is an institutional/communication innovation rather than animal health innovation per se  ‘Livestock entrepreneurs’ will not be easy to motivate: better targeting of the disease control message is necessary  If 90% of individuals are not willing, or able to pay for services, what of the other 10% who are? There exist individuals who do wish for better access and can pay for goods and services, we should be working to find means to connect these individuals to quality options 32
  • 33. + Discussion points (continued)  Cost of compliance issues  Animal health interventions are sometimes far too costly and the incentives don’t necessarily line up  ‘Receiving services’ sometimes forgotten – aggregation platforms act as a means to targeting this issue  Vaccine technology really acts as one of the largest barriers  Cold chain  Serotyping  Delivery costs of ~$1.7 on average in recent calculations  Provide infrastructure and burden-sharing mechanisms that reduce transaction costs  Disease control is not merely about immunology/epidemiology, it is also about knowledge  Systems of communication through mobile phone technologies? 33
  • 34. + Discussion points (continued)  The poor really are not victims, they can be accessed by markets  For example, an individual with a cow most likely isn’t even in the scope of ‘poor,’ and providing access and the appropriate quality/incentive structure should lead to local buy-in for control  Temporal nature of vouchers, target sales right after harvest (in the case of fertilizer distribution) – similar translation in livestock sector at animal markets? 34