Sectoral and Economy-wide Analysis of the Ethiopian Livestock

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  • This growth rates compare very favourably to those very close to zero reported in 702, 80s and 90sAlso the above rates were spread between the intensive and extensive margin. The pctage of farmers engaged in crop agriculture only dropped feom 18 pct in 2000/01 to 9 pct in 200/08Measured growth rates are consistent with the history of disasters in Ethiopia2002 and 2003 saw a prolonged drought. Livestock number quickly picked up after that2008 was characterised by poor belg and deyr rainy seasons, while 2009 also had a poor belg and an erratic performance and early cessation of kremt rainsIf supply side story, we should find further evidence in birth and death ratesHas demand played a role as well?
  • Cattle stock growth from 2 pct in 2003/04 to 10pct in 2006/07Economic growth above 10pct consistently and unitary income elasticitiesSo, roughly, for most years demand growth > supply growthHigh births rates may thus also have been the result of increased investment in livestock productivity from livestock holders
  • BeefShoatsPoultryDairyFeedXXXXXXXXXXDiseaseXXXXXXXXMarketing, processing, etcXXXXXXXBreed qualityXXXXXXXXOthers: labor, credit, extension . . .XXXX
  • Sectoral and Economy-wide Analysis of the Ethiopian Livestock

    1. 1. A Sectoral and Economy-Wide Analysis of the Ethiopian Livestock Sector<br />IFPRI-ILRI-EDRI-DRMFSS<br />Livestock initiative<br />Ethiopian Economic Association Conference<br />July 21, 2011<br />Addis Ababa<br />1<br />
    2. 2. Research team<br />Stefano Caria, Ayele Gelan, SeneshawBeyene, Ermias Engeda, Fantu Nisrane Bachene, HelinaTilahun, Kibrom Tafere, Ibrahim Hassen, Derek Headey<br />
    3. 3. Outline<br />Overview of project rationales and objectives<br />Background on sector’s performance and constraints<br />
    4. 4. Rationale and objectives<br />Livestock is a big sector in Ethiopia: Largest livestock population in Africa, roughly 1/3 of Ag GDP and 14% of total GDP, 6.4% of exports<br />Perhaps 15% of population earn majority of income from livestock, 50-60% in mixed systems where livestock income share is substantial<br />Household spending on livestock products is low, but income elasticities high<br />Exports also very low, but large potential<br />
    5. 5. Rationale and objectives<br />However, the sector is thought to be underperforming<br />Very little specialization, export share is very low, productivity low, mortality and morbidity high, significant inflation in recent years, suggesting limited supply response; rising grazing/feed constraints<br />Given the sector’s size there also seems to be insufficient effort on both research and policy fronts (though rising interest)<br />The academic literature is particularly short of nationally representative work, and macro-analysis<br />
    6. 6. Rationale and objectives<br />This project seeks to fill this gap by largely focusing on macroeconomic analysis of the sector<br />Specifically, we set out 5 interlinked components<br />Stocktaking of livestock statistics, and lit review on diagnostic studies<br />Some GIS analysis of livestock potential<br />Livestock demand patterns<br />Livestock market integration & price formation<br />A CGE analysis of macro linkages of livestock sector<br />
    7. 7. Analysis of livestock prices & values chains<br />Spatial data on rainfall & forage shocks<br />Integration of markets; effect of shocks on prices; modeling scenarios<br />General equilibrium model<br />Partial equilibrium model of livestock dynamics<br />GIS (spatial) analysis of livestock sector<br />Patterns of production and market access<br />Improved herd dynamics<br />Elasticities of own price, cross-price & income demand<br />Household demand analysis of livestock<br />Figure 2. Overview of the research components and their linkages with each other<br />
    8. 8. A STOCKTAKING OF Livestock STATISTICS and diagnostics<br />
    9. 9. Introduction to sector<br />Around 80% of Ethiopian households own some livestock. It is the dominant livelihood of pastoralists (perhaps 15% of population) and a livelihood source in mixed systems highland farms<br />Most livestock are in Oromia and Amhara (where most people are), but livestock specialization more prominent in lowlands. Lowlands also net exporters of livestock<br />
    10. 10.
    11. 11. Map 2. Shoat density per 1000 population of humans<br />
    12. 12.
    13. 13. FAO data suggest cattle numbers rising, but sheep and goats only recovering in 2000s, poultry numbers declining<br />
    14. 14. More recent performance was strong until 2007/08<br />Stronger growth in shoats than cattle<br />
    15. 15. Exports<br />Livestock accounts for 8-9% of agricultural exports (including hides & skins)<br />Formal meat/live animal exports are just 3% of production value<br />However, informal live animal exports are thought to be at least as large as formal exports, so maybe this figure is more like 5-6%<br />Also, exportability of meat means that domestic prices could be influenced by international prices<br />We are also seeing strong growth in formal exports and some emergence of new markets<br />
    16. 16. <ul><li>Export value going up, partly because of rising international prices, but new markets emerging</li></li></ul><li>And rising share of live animals in exports, especially cattle (bovines)<br />
    17. 17. But sharply rising real prices of cattle point point to possible international price transmission (no major supply shocks).Prices of goats and sheeps showing more moderate trends<br />
    18. 18. Constraints & Opportunities<br />
    19. 19. Constraints<br />Livestock sector is large, but very low productivity, low levels of commercialization<br />The list of constraints in the sector are widely known, but it is important to realize that:<br />Some constraints will take more time to relieve than others – e.g. breeding<br />Some constraints affect some livestock products more than others – e.g. disease in poultry industry; transport in dairy industry<br />Space matters: different constraints and opportunities in different regions, and connections between regions; e.g. pastoralists<br />
    20. 20. A rough attempt to be diagnostic<br />
    21. 21. Links to macro analysis<br />If supply can be expanded will it be met by domestic demand? Are there also good export opportunities?<br />If supply-side constraints can be relieved, what are implications for growth & poverty?<br />If supply can be expanded, will this promote greater regional trade? i.e. how well do markets function in terms of price transmission?<br />

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