Pastoralism, Livestock and Growth in Ethiopia


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Presentation given at regional dialogue on the New Alliance for Food Security and Nutrition, Addis Ababa, June 2014.

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Pastoralism, Livestock and Growth in Ethiopia

  1. 1. Pastoralism, Livestock and Growth in Ethiopia Regional dialogue on Stronger food security and nutrition in dryland and pastoral areas: harnessing the potential of the New Alliance Addis Ababa, 10 June 2014
  2. 2. Overview • Trends and drivers • Challenges and solutions Pastoralist areas
  3. 3. 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
  4. 4. Export trends: foundation and drivers Livestock- 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 laws Improved roads and mobile phone network Private sector facilities – abattoirs, holding grounds etc Private feedlots, increased market stratification Livestock -specific Robust pastoralist livestock production system, responsive to market opportunities (from 1920s) DEMANDS PRICES
  5. 5. Trends in live animals and meat export, Ethiopia 2005-2013 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 2013 cf. US beef exports increased 2.4 times in same period
  6. 6. Recorded Exports of Livestock, Berbera (“from or through the Somaliland Protectorate”) 1927-1951a - 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 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 Numnerofanimals 2011-2013b a Hunt (1951) b Somaliland Chamber of Commerce (2014) Proxy data for Ethiopia’s informal exports 2011 2012 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
  7. 7. 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
  8. 8. 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
  9. 9. Critical issues: Land Challenges • 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
  10. 10. Critical issues: Feed Challenges • 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
  11. 11. 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
  12. 12. Critical issues: Regional trade Challenges • 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
  13. 13. 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
  14. 14. Thank you