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Surgipharm Limited
Scoping Study on
The Animal (Veterinary)
Healthcare
Market in Kenya
Prepared By
Study Period: January - March 2023
Confidential & Proprietary to Surgipharm Limited
K
E
N
Y
A
Confidential Surgipharm Limited
Confidential & Proprietary
This document contains confidential information that is proprietary to Surgipharm
Limited. This information is provided for the sole purpose of permitting the recipient
to read and derive required information as per the needs of Surgipharm. In
consideration of receipt of this document, the recipient agrees to maintain such
information in confidence and not to reproduce or otherwise disclose this information
to any person outside the group directly responsible.
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FOREWORD
About Surgipharm
Surgipharm, an Imperial Company, was founded in 1985 with the objective of
establishing a country-wide network of pharmaceutical marketing and distribution.
Today Surgipharm, through its branches in Nairobi and Mombasa and a highly
motivated team of 395, is the largest, most efficient and reliable pharmaceutical
company in Kenya.
Surgipharm’s mission is to maintain a leadership position in the healthcare industry
built on a strong heritage of Quality, Ethics, Compliance and Trust in the marketing
and distribution of healthcare products. Surgipharm continues to be the preferred
distributor for principals and the most valued supplier for route to patient partners in
Kenya.
Surgipharm intends to expand its product offering portfolio into the Animal
Veterinary Market (Production and Companion Animals), hence the need to
commission this scoping study.
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About the Scoping Study
In order to help define a clear market entry strategy, Surgipharm Limited contracted
Ecryp Technology Solutions Ltd to contact a scoping study on animal health.
Study Objectives
1. To establish the extend of the Kenyan market for animal health products that
include veterinary drugs and vaccines
2. Establish actors in animal health services, elucidate their experiences,
opportunities, challenges and recommendations
3. Identify strengths, opportunities, weaknesses and threats in the Animal Health
Products
4. Find out supply, demand and barriers to optimal access to appropriate Animal
Health Products
5. Establish the marketing strategies adopted by Animal Health Pharmaceutical Firms
in Kenya to enhance performance.
6. Carry out landscape PESTEL analysis on animal health products market.
7. Make recommendations on best market entry strategy
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Study Outputs
I. Regional synthesis, analysis and forecasts of the study market; providing
insights on the regions in which the animal health products industry is blooming
and potential for scale up.
II. Identification of current market value, key drivers, restraints, opportunities, and
challenges (DROC) in the market and their impact on feasibility for new
products, product mix and pricing dynamics.
III. Study of the effect of exogenous and endogenous factors that affect the
market; which includes broadly demographic, economics, and political, among
other macro-environmental factors presented in PESTLE Analysis
IV. Study of the competitive factors that determine the overall profitability of an
Industry, using Porter’s five forces analysis for analyzing the level of
competition and business strategy development.
V. Identification and stakeholder analysis of the market players along with their
product portfolio, current strategic interests, key financial information, legal
issues, SWOT analysis and potential for a sustained the market environment.
VI. Develop a business case along with investment opportunities to provide both
individuals and organizations a strong financial foothold in the market
Research Methodology
Report
Writing 6
Data
5Triangulation
Expert
Validation 4
Econometric
3Modelling
1Secondary
Research
Primary
Research2
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About Ecryp Technology Solutions Ltd
Ecryp Technology Solutions Ltd established in the year 2005, has a team of
researchers with expertise in M&E, animal breeding, disease modelling,
econometric/statistical analysis, Data gathering and management technologies.
The team has been working on various projects in partnership with Agriculture and
Food Authority Kenya, National Aids Control Council, Centre for Population Health
Research and Management (CPHRM Consortium),3r Dairy Project SNV, Mastercard
Foundation, KCB Foundation, Intra Health, IFAD, ILRI,USAID, CDC-Kenya, GIZ
CARE,KEMRI-Wellcome Trust in various monitoring, evaluation, research,
technological and skills development assignments
The team has excellent competencies in research design, research technologies,
evaluations, data management, data collection methods, analyzing data using
statistical software (R, STATA, NVIVO, SPSS, MATLAP, PHP, Python).
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Table of Contents
................................................................................................................................................................................................. 1
CONFIDENTIAL & PROPRIETARY ....................................................................................................2
FOREWORD ....................................................................................................................................................3
About Surgipharm........................................................................................................................................................... 3
About the Scoping Study ............................................................................................................................................. 4
Study Objectives ......................................................................................................................................................................4
Study Outputs ...........................................................................................................................................................................5
Research Methodology...........................................................................................................................................................6
About Ecryp Technology Solutions Ltd ................................................................................................................. 7
ACRONYMS AND ABREVIATIONS...................................................................................................12
1. EXECUTIVE SUMMARY ..................................................................................................................14
1. Overview ................................................................................................................................................................... 14
............................................................................................................................................................................................... 14
2. Key Findings ............................................................................................................................................................ 15
2. MARKET DYNAMICS........................................................................................................................27
1. Trends Impact Analysis...................................................................................................................................... 27
The Evolution of Animal Healthcare in Kenya.............................................................................................................27
2. Market Drivers ........................................................................................................................................................ 40
Overview ...................................................................................................................................................................................40
Regulatory Environment in Kenya...................................................................................................................................41
Non-Governmental Actors ..................................................................................................................................................57
Acts and Laws Regarding Food Safety and Livestock..............................................................................................58
3. Market Restraints.................................................................................................................................................. 59
Overview ...................................................................................................................................................................................59
Animal health service delivery in Arid and Semi-Arid Lands (ASALS) ..............................................................60
Constraints to animal health service delivery in Arid and Semi-Arid Lands (ASALS) .................................62
4. Market Opportunities .......................................................................................................................................... 71
Overview ...................................................................................................................................................................................71
5. Key Challenges in the Market.......................................................................................................................... 72
Overview ...................................................................................................................................................................................72
3. MARKET SEGMENTATION AND GEOGRAPHICAL ANALYSIS .................................73
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1. Structure of the Veterinary (Animal) Pharmaceutical Industry.....................................................73
2. Categories of veterinary medicines.............................................................................................................. 74
3. Size and segmentation of the animal healthcare market in Kenya............................................... 75
4. Product classes ...................................................................................................................................................... 77
5. Players in the Animal Health Market in Kenya........................................................................................ 80
6. Small Animal Sector Market Segments....................................................................................................... 81
7. Over the Counter Products (OTC) ................................................................................................................. 84
3.7 Clinical Complexity ............................................................................................................................................... 85
4. STRATEGIC ANALYSIS ..................................................................................................................89
1. Strategic Analysis of Animal Healthcare Products................................................................................ 89
PESTEL Analysis on Animal Healthcare Products.......................................................................................................90
Porters Five Forces Analysis..............................................................................................................................................91
2. Factors affecting farmer decision on the use of animal health products...................................92
3. SWOT Analysis of the Kenyan Animal Healthcare Industry.............................................................. 93
Strength ....................................................................................................................................................................................93
Weakness..................................................................................................................................................................................94
Opportunity ..............................................................................................................................................................................95
Threats.......................................................................................................................................................................................96
5. COMPETITIVE LANDSCAPE ........................................................................................................97
1. Manufacturers......................................................................................................................................................... 97
Registration of Veterinary Medicines..............................................................................................................................97
Veterinary Medicines manufacturers in Kenya...........................................................................................................98
Opportunities and challenges for manufacturers in Kenya....................................................................................99
......................................................................................................................................................................................................99
Manufacturers: Overview .................................................................................................................................................100
Types of manufacturers ....................................................................................................................................................101
Market entry models for international manufacturers...........................................................................................102
Vaccine production in Kenya ...........................................................................................................................................103
International and National Private Manufacturers ..................................................................................................107
Examples of manufacturers .............................................................................................................................................109
Challenges facing manufacturing plants.....................................................................................................................110
Mitigation on Challenges facing manufacturing plants..........................................................................................111
2. Importers, Distributors and Wholesalers................................................................................................ 112
Importers, distributors and wholesalers: Overview ...............................................................................................112
Importers, distributors and wholesalers: Example.................................................................................................113
3. Retailers .................................................................................................................................................................. 114
Retailers: Overview.............................................................................................................................................................114
Retailers: Examples ............................................................................................................................................................115
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4. Animal Health Product flow control ........................................................................................................... 116
Diagram of the possibilities of product flow control by different sectors .......................................................116
General Animal Health Product Flow: Key Learnings.............................................................................................116
General Animal Health Product Flow: Diagram........................................................................................................117
Biologicals Animal Health Product Flow: Key Learnings .......................................................................................117
Biologicals Animal Health Product Flow: Diagram...................................................................................................118
Vitamins and Supplements: Animal Health Product Flow: Key Learnings .....................................................118
Vitamins and Supplements: Animal Health Product Flow: Diagram ................................................................119
Pharmaceuticals: Animal Health Product Flow: Key Learnings..........................................................................119
Pharmaceuticals: Animal Health Product Flow: Diagram .....................................................................................120
5. Veterinary Services Delivery Systems ...................................................................................................... 121
6. Challenges facing Veterinary Regulatory Environment .................................................................... 124
7. Mitigation on challenges facing Veterinary Regulatory Environment........................................ 125
8. Pharmacovigilance system ............................................................................................................................. 126
9. Marketing strategies adopted by Animal Health Pharmaceutical Firms in Kenya ...............127
Pricing Strategy ....................................................................................................................................................................127
Product Strategy ..................................................................................................................................................................128
Place Strategy .......................................................................................................................................................................129
Promotion strategy..............................................................................................................................................................130
10. Trends and Innovations ................................................................................................................................ 132
SIDAI AFRICA LTD.: Innovation through vertical integration ............................................................................132
Digi Cow: An uber” like platform for Small Scale Producers in Kenya............................................................133
6. RECOMMENDATIONS: .................................................................................................................134
OVERVIEW...................................................................................................................................................................... 134
MARKET ENTRY STRATEGY (KENYA) ................................................................................................................. 135
WHERE? ...................................................................................................................................................................................135
WHAT? .....................................................................................................................................................................................135
WHY? ........................................................................................................................................................................................137
WHO? .......................................................................................................................................................................................138
HOW? .......................................................................................................................................................................................139
MAJOR CHALLENGES.................................................................................................................................................. 143
7. REFERENCES .....................................................................................................................................145
8. ATTACHMENTS.................................................................................................................................148
Appendix 1: Notifiable Diseases in Kenya, 2015 ........................................................................................ 149
Appendix 2: Notable Diseases Reported in Kenya in the last 10 ......................................................... 151
Appendix 3: List of Licensed Veterinary Manufacturers in Kenya ....................................................... 152
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Appendix 4: Manufacturers and Distributors of Veterinary Medicines in Kenya .......................... 153
Appendix 5: Veterinary Pharmaceuticals Registered Drugs................................................................... 154
Appendix 6: Registered Veterinary Biologicals ........................................................................................... 156
Appendix 7: Registered Veterinary Pest Control ........................................................................................ 158
Appendix 8: Registered Veterinary Biocidal ................................................................................................. 160
Appendix 9: Registered Veterinary Feed Additives ................................................................................... 162
Appendix 10: Registered Veterinary Medical Devices.............................................................................. 164
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ACRONYMS AND ABREVIATIONS
AH: Animal Health
AHTs: Animal Health Technicians
AHTTAK: Animal Health Technician Association of Kenya
AMR: Anti-Microbial Resistance
ASALs: Arid and Semi-Arid Lands
CAHWs: Community Animal Health Workers
DAH: Decentralized Animal Health
DVS: Directorate of Veterinary services
GDP: Gross Domestic Product
GMP: Good Manufacturing Practices
GoK: Government of Kenya
HHs: House Holds
ILRI: International Livestock Research Institute
ITDG: Intermediate Technology Development Group
KALRO: The Kenya Agricultural and Livestock Research Organization
KALT: Kenya Association of Livestock Technicians
KDB: The Kenya Dairy Board
KASPA: Kenya Animal Scientist Practitioner Association
KFC: Kamujini Farmers Centre
KNVLN: Organizational chart for the National Veterinary Laboratory Network
KVA: Kenya Veterinary Association
KVB: The Kenya Veterinary Board
KVPA: Kenya Veterinary Paraprofessional Association
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KVAPS: Kenya Veterinary Association Privatization Scheme
NORAD: Norwegian Overseas Aid
NGO: Non-Governmental Organization
OAU-IBAR: Organization of African Unity-Interafrican Bureau for Animal
Resources
PARC: The Pan African Rinderpest Campaign
SSA: Sub Saharan Africa
SSPs: Small Scale Producers
TRVTT: Thermostable Rinderpest Vaccine Technology Transfer
VMD: Veterinary Medicines Directorate
1. EXECUTIVE SUMMARY
1. Overview
Animal Health (AH) actors have an opportunity to
leverage Kenya’s stable and open market, as the country
continues the animal sectors transformation
from subsistence to commercial undertaking
Fig 1.1 Market Overview
 Low AH awareness
among
SSPs
 Ease of doing business
and favorable trade
conditions
 Infrastructure
(challenges
Reaching the ASALs)
 Unmet demand,
especially among SSPs
and pastoralists
 Low vaccination
coverage
 Strong
institutional/regulatory
frameworks
 Low quality of some
Products in the market
Leading to AMR
 Small but growing
companion segment
 Relatively low number
of
Qualified AH professionals
 High digitization (e.g.
Wide adoption of mobile
money)
Climate change
Vulnerability
Kenya 2023
Ripe
&
Ready
Innovative
Hold
Greenfield
Ease of doing business
AH market Evaluation Matrix
AH
market
opportunity
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1.2 Key Findings
► Kenya’s stable economy and liberalized trade system make it one of the
easiest countries in SSA to do business.
o Annual GDP growth averaged 5.6% between 2009-2019.
o Ranked 3rd in SSA in the Doing Business Index (and 59th worldwide).
► One of the largest livestock populations in Africa (60% of the households
keep livestock), Kenya’s growing livestock market holds a huge growth
potential for the years to come.
o Livestock represents 40% of agricultural GDP, 12%of total GDP.
o Value of livestock and livestock products raised from $833M USD in 2012 to
$1,394M USD in 2019.
o Projected increase in consumption of animal products (e.g., demand for beef
expected to increase by over 170% between 2010 and 2050).
o Small companion animals’ segment, growing rapidly with urbanization.
► Compared to other countries in the region, Kenya has a mature AH sector,
governed by established institutions.
o Ranked 1st in SSA by the Sustaining Livestock indicator, measuring the
quality of manufactured feeds and veterinary products in the country.
o The creation of the Veterinary Medicine Directorate (VMD) in 2017 helped
consolidate main AH regulatory activities in a single dedicated entity.
o Cost and timescales of product registrations can be significant.
o An advanced agri-tech ecosystems, nearly 30% of all agri-tech start-ups in
SSA operate in Kenya, with 18% also headquartered there.
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► Kenya’s AH sector’s main potential lies in the shift from a treatment
to a preventive approach and improving AH awareness
o Vaccination coverage is low at 10% (2014) versus the 2030 target of
80%
o Urbanization (50% of people expected to live in urban areas by 2050
vs 27% in 2019), leading to increases in infectious and zoonotic
diseases.
o Improper use and poor quality or counterfeit products are eroding SSP
trust and leading to high levels of AMR, impacting both animals and
humans
o Large commercial farms typically have good prevention practices and
diagnostic capabilities
o SSPs and pastoralists (72% of livestock holders) are underserved and
represent significant AH opportunities
► AH product distribution is dominated by the private sector, with an
increasing presence of national actors playing multiple roles across
the value chain
o Direct exporting is the main market entry strategy for international
manufacturers, giving importers significant influence.
o The growth of national private manufactures is changing the ecosystem
o Counties have a small role in the AH product flow, except for vaccines
o Agro-dealers (over 10k across the country) play a key role as main suppliers
to SSPs, and large product volumes flow through them
o Kenya’s significant dairy sector drives high supplements volumes, with
growth driven by need for productivity to meet demand
o Pharmaceuticals are the main product category sold informally
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► Agriculture is the main driver of economic growth
o Major contributor to the economy contributing about 34.15% to GDP (2019)
and 53.81% to employment (2020)
o Sector accounts for 50-65% to export value. Vegetable product exports
totaled $3.01BN USD in 2018(48.5% tea.20.4%cut flowers)
o Net importer of animal products with imports totaling $150M USD (23%
sheep and goat meat) in 2019
o Ag sector performance decelerated from 6.1% growth in 2018 to 3.6% in
2019, mainly due to extreme weather phenomenon (suppressed long rains)
o County governments’ expenditure grew by 300% between FY15/16 and
FY19/20
o Farm size and productivity are highly heterogeneous
o SSPs dominate the agricultural landscape, mainly cultivating maize, beans,
potatoes and keep cattle, small ruminants and poultry
Fig 1.2: GDP Share of Agriculture (%)
Fig 1.3: Agriculture Added Value (%BN USD)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
24
26
28
30
32
34
36 GDP share of agriculture (%)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
10
20
30
40
Agriculture added value (%BN USD)
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Source: https://www.theglobaleconomy.com
Source: https://www.theglobaleconomy.com
► Kenya Animal Health Market Structure
o Kenya is a meat deficit country, despite being a leading exporter of processed
meats and chilled carcasses
o Import of live animals is much greater than exports. On the first semester of
2019, the import value of live animals was around 7 times higher than the
value of exports (mainly from neighboring countries)
Fig 1.4: Primary Species in Kenya 2019
POULTRY 44.6M,
33%
PIGS 0.6M, 10%
DONKEYS 1.2M,
1%
CARMEL
4.7M, 4%
PETS
UNKNOWN, 0
CATTLE 20M, 16%
GOATS 35M, 26%
SHEEP 27M, 20%
Source: https://www.fao.org/home/en/
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► Livestock keeping households per species (2017)
o As population and urbanization grows, consumption of milk, beef, chicken,
pork and eggs is expected to increase by 175%, 173%,174%,268% and
503%, respectively, between 2010 and 2050.
o Value of livestock and livestock products increases from $833M USD in 2012
to $1,395M USD in2019. Cattle and calve production value is the highest.
Fig 1.5 Estimated Livestock keeping households per species (2020)
► Total number of
households:
► 11.63 million
Number of HHs
keeping Animal
% of total
number of
households
% of livestock
keeping
households
Livestock keeping
households
6,985,359 60%
cattle 3,610,839 31% 52%
Goats 2,766,171 24% 40%
Sheep 1,659,964 14% 24%
Equine 826,572 7% 12%
chicken 5 ,511 ,901 47% 79%
Source: https://www.fao.org/home/en/
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► Main Livestock Production Systems
o High potential Farming is situated in tropical temperate area, in peri-urban
Nairobi and surrounding regions: Most AH service providers, manufacturers
and distributors actors are concentrated in these areas
o 60-70% of the National Livestock Herds is in the ASALs, they are principally
occupied by pastoralists and agro-pastoralists
o Marginal mixed farming is situated in Eastern and Western steppe or tropical
regions: Less productive due to poor dairy genetic resources and lack of
market access
► Most Livestock is owned by Small Scale Producers (SSPs) engaged in
mixed farming or pastoralism
Access to AH products
 Primarily buy
pharmaceuticals and
vitamins/supplements
from agro-dealers but
their main AH expense
are feeds
 Rarely vaccinate their
animals
Access to AH products
 Veterinary drugs are
their main expense
 CAHWs play an
important role in
facilitating access to
veterinary medicine
 Subsidies provided by
GoK on major vaccines
are rising
Access to AH products
 Buy AH products
directly from
manufacturers,
imports, or wholesalers
feeds are their main
expense
 For ad-hoc needs, they
will purchase products
are agro-dealers
 Easy access to
products and often
hires experts
The end consumers of AH products and services are mainly divided into subsistence and commercial
Farmers. Kenya’s agri-business sector is very active, drawn by an open operating environment and
opportunities to inform, equip, and sell to farmers while improving animal health and productivity.
Pastoralist and agro-
pastoralists
 Mainly found in the
ASALs (which cover
75% of total surface
land)
 Pastoralists keep a
large number of
animals, mainly cattle,
indigenous breeds of
sheep, goats and
camels
Mix crop and livestock
production systems
 Mainly found in
urban and peri urban
areas and high
rainfall areas
 Priority is crop,
livestock comes
second. subsidence
activity with a small
number of animals
(2-10), mainly cattle
and small ruminants
Commercial or specialized
farming
 Mainly found near
trading points and
near urban and peri-
urban markets
 Mostly focused on
dairy, followed by
ruminant meat and
poultry
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► Focus on Cattle
►
The prominence of cattle in Kenya livelihoods
 11.8M HHs cattle, of which 76% are beef cattle
and 24% are cows
 3.6M HHs own at least one cattle, contributing
from 40 to 73% to total household income
 While beef animals are kept by small, medium and
large farmers, 95% of dairy farmers keep an
average of just 3 cows.
 Trends indicate there is an increased number of
peril-urban increase urban farms.
 The dairy sector contributes 14% to agricultural
GDP and 3.5% of total national GDP
Cattle as an illustration of Kenyan
farming systems
Mixed farming or semi- intensive
• average of 3-20 cows that are part of
a large, mixed breed of animals,
inclusive also small ruminants and
chickens. Dairy cows graze during
daytime and are provided with food
supplements
Pastoralists
• Keep indigenous breeds, herds vary
from 20 to several hundred heads that
rely entirely on communal grazing
areas and water sources.
• Milk and beef are the main products
Commercial
• More widespread compared to
other countries of the region
representing 17% of the heads.
• Divided in ranching (Average of
1,000 heads, highly commercial
large scale), feeding (capital
intensive system) intensive diary
(average of 15 cows on quality
feed) and extensive diary (20-200
heads and pasture-based
production)
Source: https://www.fao.org/home/en/
Agro-
Pastoral,
29%
Semi-
intensive
dairy, 11%
Intensive
dairy, 10%
4%
RanchingE, xtensive
dairy, 3%
Feedlot, 0%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
18.8 Million Heads
Pastoral,
43%
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► Focus on Poultry
The prominence of poultry in Kenyan livelihood
 43.8m Chicken contributing 15.1% of total
livestock value added (2017)
 Sector produces more than 35000 tones of meat
and (6 BN Eggs (2019)
 5.5Million HHS keep poultry and 75% of HHS in
rural areas contributing 36-63% of income
(depending on production system)
 Sources of nourishment meat and eggs and
immediate cash (sale of birds)
Three major (meat) production
system
Intensive
• Market~ oriented, practiced in urban
areas
• Exotic chicken (largely exotic hybrids)
raised in confined structures, properly
fed and vaccinated. Broilers are sold
within 5 to 8 weeks
Semi~ intensive
• Practiced throughout the country,
improved chicken kept In confined
simple structures: birds scavenge
during the day are provided with some
feeds supplements.
• Common vaccination against major
diseases but limited bio-security
practices.
• Most birds sold after growing them for
between 4 and 5 months though some
are self-consumed.
Extensive (free ranging)
• Low input low output system where
indigenous birds are left to freely
roam for feeds.
• Farmers rarely vaccinate the birds or
treat them when sick.
• Women and children are responsible
for the birds. Mainly kept for egg
production though also sold
opportunistically in informal markets.
• Popular throughout the country, more
common in western regions, some
parts of lower eastern, North rift areas
and in coastal areas.
Semi-
intensive ,
32%
Intensive ,
20%
0%
10%
20%
30%
40%
Extensive ,
50% 48%
60%
Extensive Semi-intensive Intensive
Source: https://www.fao.org/home/en/
39.7 Million raised for meat
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► Characteristics and Attributes of Animal Health Services
It is useful to discuss the economic characteristics and attributes of animal healthcare
services to help define the distribution of responsibilities between the public and private
sectors, because these services can be delivered both by government veterinary staff
(completely or partly free of charge) or by private veterinarians (usually at cost).
Broadly speaking, the spectrum of animal healthcare services includes preventive and
control and/or inspection programs and the treatment of sick animals. The following
are some of the characteristics and attributes of animal health care services
1. Professionalism: Animal health services are provided by trained and licensed
professionals, such as veterinarians, veterinary technicians, and animal health
care workers.
2. Specialization: Animal health services are often specialized to meet the specific
needs of different types of animals, such as small animals, large animals, and
exotic animals.
3. Preventive care: Animal health services focus on preventing diseases and
illnesses in animals through routine check-ups, vaccinations, and other
preventative measures.
4. Diagnosis and treatment: Animal health services include diagnostic testing and
treatment for a wide range of animal diseases and illnesses.
5. Emergency care: Animal health services also provide emergency care for
animals in critical condition, such as trauma, injuries, and illnesses.
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6. Surgery: Many animal health services offer surgical procedures for animals,
including orthopedic and soft tissue surgeries.
7. Rehabilitation: Some animal health services also provide rehabilitation services
for animals that have been injured or have chronic health conditions.
8. Supportive care: Services such as pain management, palliative and hospice care
for terminally ill animals are also provided by some animal health services.
9. Communication: Good communication and transparency with the
owner/caregiver is also an important aspect of animal health services.
10.Continuity of care: Providing continuity of care and keeping records of
animal's health history, treatment and progress is also a key attribute of animal
health services.
2. MARKET DYNAMICS
The Veterinary Pharmaceutical Industry in Kenya is more vibrant in comparison to
other East Africa Countries, however, uncoordinated leading to misuse of drugs and
increased antimicrobial resistance that pose a threat to human and animal health.
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2.1 Trends Impact Analysis
The Evolution of Animal Healthcare in Kenya
The colonial era: private veterinary practice
 During the colonial and immediately post-independence era most clinical vet
services in Kenya were provided by private practitioners and ‘Vet Scouts’.
 The private practitioners were confined in high potential areas, mainly in the so-
called white settler areas.
 Vet Scouts were local livestock keepers who received informal training from local
vet staff, were employed by the County Council and seconded to the government,
and lived and provided clinical and other services in the villages.
 The provision of private animal health services were, and still are, mainly
governed by the Veterinary Surgeons Act (Cap 366) and the Pharmacy and
Poisons Act (Cap 244).
 The Veterinary Surgeons Act was borrowed mostly unchanged from the British
Veterinary Surgeons Act.
 This Act broadly limits the practice of veterinary medicine and surgery to
registered veterinary surgeons, and staff under their direct supervision.
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 However, there are two clauses at the end of the Act added in recognition of the
fact that many of the larger commercial farmers of the time provided their own
veterinary services.
 These clauses allow anyone to treat their own animals, or those belonging to a
neighbor, provided it is not done for profit.
The 1970s and 1970s: free services for all
 Sessional Paper No 1 (1965) ‘African Socialism’ set the scene for a massive
increase in government livestock services, to be provided for free throughout the
country, and massive investment in the professionalization of the veterinary
service.
 Vet Scouts at village level were gradually phased out and replaced by Vets and
Animal Health Technicians (AHTs), based at Divisional and Locational level
respectively.
 The Private Practitioners went out of business. Many were expatriates and left
the country.
 Although clinical services became more accessible in the high potential areas,
they did not improve much in the arid and semi-arid areas (ASAL) because
relatively fewer Vets and AHTs were posted there and, without enough Vet Scouts
or any other intermediaries, they could hardly reach the ASAL nomadic herds
because of the vast distances, poor terrain and poor road network.
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The 1980 to 1992: structural adjustment and covert operations
 The first decentralized animal health (DAH) scheme was quietly established in
1980 by an NGO in Turkana District, an ASAL area in Northern Kenya.
 Some of the Catechists of the Catholic Diocese of Lodwar, were trained by a vet
from Uganda to treat common livestock diseases as they travel around doing
their other duties.
 This model of animal health care delivery gradually evolved into the Adakari Vet
Scout program promoted by the EEC-funded Turkana Rehabilitation Program in
the late 1980s and the Norwegian Overseas Aid (NORAD) program in Turkana in
the early 1990s.
 The first inklings of change in the livestock sub-sector emerged through a series
of research papers in the Ministry of Livestock Development in 1982 and 1983,
leading to a policy paper on the privatization of veterinary services.
 This was warmly received by the Minister for Livestock Development, and he was
perceived to be ahead of the game within government. But these plans were
never implemented
 The second DAH scheme got underway in 1984, again under the Catholic Church,
this time in Narok District, another ASAL area in South-Western Kenya, but
collapsed when Kit Flowers, the expatriate vet who set it up, left the country.
 Structural adjustment within government and the gradual privatization of public
services took centerstage in 1986.
 Serious planning for reform in the Ministry of Agriculture (which had by that time
subsumed the Ministry of Livestock Development) began with the donor-funded
Agriculture Sector Investment Project in the mid-1990s.
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 However, an interdepartmental committee set up to look at the implications for
the Department of Veterinary Services failed to reach any concrete conclusions
before quietly collapsing following the transfer of the committee chairman.
 The Intermediate Technology Development Group (ITDG), a UK based NGO,
arrived in Kenya in1986 to work with the Catholic Diocese of Meru at Kamujini
Farmers Centre (KFC) in the lower potential areas of Meru District.
 ITDG had become interested in the dramatic improvements in rural health care
provision in China during the 1970s and whether the ‘barefoot doctor’ approach
could be applied in the livestock sector.
 They were also influenced by World Bank proposals for new privatized livestock
services in Sub-Saharan Africa.
 Based on the results of some preliminary studies ITDG trained 17 Community
Animal Health Workers (CAHWs) at Kamujini in early 1987.
 From the outset ITDG intended to test the approach, and if successful, to seek to
influence the policy environment so that the approach could be replicated more
widely.
 ITDG established several other CAHW schemes over the next few years with
different partners in many different parts of the country including East Pokot (also
in1987) Machakos (1988), Makueni, Samburu (1989), and Turkana (1990).
 Budget restrictions began to bite in the late 1980s and the government stopped
automatically employing all vets and AHTs on graduation in 1988, and froze
recruitment into vacant posts.
 This had a disproportionate impact in the ASAL areas (commonly referred to as
hardship areas) as vets and AHTs in those areas frequently requested transfers
to less remote areas.
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 The University and Technical Training Institutes carried on training veterinary
staff, turning out about 50 veterinary graduates and approximately 300 AHTs
each year.
 Although some of the vets and AHTs started working privately, and others were
employed by private sector companies, NGOs and cooperatives, or moved into
different professions, the gradually increasing number of unemployed vets and
AHTs became a significant pressure group for change over the next few years.
 In 1988 ITDG organized the first of what was to become a series of annual
workshops for vets involved in DAH projects (ITDG, 1991; 1993; 1994; 1999;
2000).
 The workshop, held at KFC in Meru District, was attended mainly by ITDG and
their partners’ staff, and included three government vets who had been involved
in setting up the programs.
 Gradually over the next few years, the proportion of government veterinary staff
among the participants increased to nearly50%, including some Provincial-level
Veterinarians and senior researchers.
 Towards the end of1999 there were indications that the Director of Veterinary
Services was aware of, and interested in the CAHW approach.
 More CAHW schemes were quietly established by bilateral and NGOs during the
early 1990s, usually working with district veterinary staff, but these schemes
were largely invisible to the DVS and to the Kenya Vet Board (KVB) and Kenya
Veterinary Association (KVA).
 The Thermostable Rinderpest Vaccine Technology Transfer (TRVTT) Project was
started with OAU/IBAR in 1990.
 The project aimed to transfer the production of a thermostable Rinderpest
vaccine, developed in the USA, to laboratories in Africa.
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 This vaccine has a long shelf life without refrigeration, and can be distributed and
used much more easily than earlier vaccines which required an efficient cold-
chain.
 The project successfully established vaccine production facilities in Cameroon and
Ethiopia (though not in Kenya), but the national veterinary departments
supported by OAU/IBAR PARC continued to use the same inefficient cold-chain
routes and systems.
 Despite the DVS’s opposition, the GTZ-funded Marsabit Integrated Development
Program started to train ‘Contact Herders’ with local department of veterinary
services staff in1992.
 Over the next few years, the approach they developed was gradually taken up by
a number of other GTZ-funded projects in other parts of Kenya.
 After three national Vets Workshops, ITDG organized an International Workshop
in Kenya in 1992, with participants from 18 countries worldwide.
 Several Kenyan vets were also invited to the workshop, which included field visits
to several decentralized animal health (DAH) projects in various parts of the
country.
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The 1994 to 1997: the conspiracy of silence
 Increase in CAHW schemes over the next two years, and from this time, national
animal health policy-makers were fully aware of the gradually expanding number
of CAHW projects.
 There was a gradually increase in the number of requests for clarification from
field-based veterinary officers who were involved in CAHW schemes, however,
these requests were never addressed.
 The Director of Veterinary Services could not confirm that CAHW schemes were
legal, and he knew that seeking to change the prevailing policies and law to make
them so would encounter strong opposition from the entire veterinary profession,
yet closing them down would dramatically reduce the availability of animal health
services in the ASAL areas.
 After many years in preparation, the KVA Privatization Scheme was finally
launched in 1994.
 This EC funded scheme provided soft loans to veterinarians wishing to set up in
private practice.
 Originally conceived in 1989 it had taken nearly five years to develop because
the KVA, dominated at that time by Government vets, could not find an affordable
loan package attractive enough to encourage any government vets to leave the
security of a government job.
 Meanwhile many of the unemployed vets had quietly established private practices
without any loan at all.
 The unemployed AHTs had a harder time however. Although they are all
secondary school leavers with two- or three-years tertiary training in animal
health care at technical institutes, the Veterinary Surgeons Act forbids them to
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provide veterinary services except ‘under the supervision of a veterinary
surgeon’.
 Some had been employed by private vets or drug companies, and some had
started to practice illegally, but many were still unemployed and increasingly
unhappy.
 They had decided to establish an Association to represent their interests in the
early 1990s, but had encountered strong opposition in the Department of
Veterinary Services, and the Kenya Association of Livestock Technicians (KALT)
was only finally registered in 1995 after they had threatened to march to State
House to express their grievance to the Head of State.
 The Minister also promised to change the law to allow them to establish private
animal health services in their own right.
 The CAHW schemes approach were tested and they were found to be very
successful, achieving much higher coverage rates for a fraction of the cost of the
other more traditional government vaccination programs, convincing OAU/IBAR
to adopt it as the key principle for the PARC-VAC project.
 During 1996, in an attempt to convince the Kenyan government to adopt the
CAHW approach to Rinderpest vaccination, the TRVTT project organized a visit
for Kenyan vets to South Sudan to see the CAHW program for themselves.
 The Kenyans were impressed by the results, but were reluctant to accept that an
approach which seemed to work in neighboring but war-torn Sudan could be
appropriate in Kenya.
 So TRVTT then took them to Afar in Ethiopia to see a similar approach, but in a
country with an effective veterinary department and indeed they became more
interested.
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 By this time there were a large number of CAHW schemes throughout the ASAL
areas of Kenya, meeting annually at the ITDG Vets Workshops, and some donors
were also training CAHWs in medium potential areas.
 The FARM Africa Goat Project, a collaborative project, established at the request
of the Kenya government, had started to develop a program with the department
of veterinary services in Meru District, incorporating both private veterinarians
and CAHWs.
 The number of CAHW schemes continued to increase during 1997, but the
Director of Veterinary Services chose to turn a blind eye. OAU/IBAR started
negotiating with the DVS to start vaccination programs using CAHWs in Northern
Kenya, meanwhile running training of trainers’ workshops for NGO staff involved
in training CAHWs in South Sudan and Northern Kenya.
 The NGOs started talking once more about lobbying for policy change and legal
reform to promote DAH schemes, and were joined by KALT who were becoming
increasingly militant since there was still no sign of the necessary reforms to allow
them to practice.
 Then, ironically, just when there seemed to be a real opportunity to promote
change, ITDG’s animal health program ran out of funds after the 7th Vets
Workshop in Marsabit.
 The Kenya Vet Board and Kenya Veterinary Association had only gradually
become aware of the CAHW movement, but became increasingly alarmed during
the year they learned more about them.
 They regarded them generally as a threat to veterinary professionalism, but were
particularly concerned to discover that some schemes were operating in medium-
potential parts of the country, where some private vets were trying to establish
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private practices, and that many of the schemes had been established by
expatriate vets working in Kenya without registering with the Board.
 Their concern finally boiled over at a FARM Africa workshop in Embu in December
1997
The 1998 to 2000: the tipping point
 After more than a year’s work with local veterinary staff, FARM Africa had finally
found a workable model for the animal health component of their goat project.
 Their plan involved establishing private vets with loans from the Kenya Veterinary
Association Privatization Scheme (KVAPS), working with Animal Health Assistants
(AHAs), who would support self-employed CAHWs at village level, to provide the
necessary service to farmers.
 This proved too much for a representative of the KVB who had been invited to
the inaugural workshop in Embu, who angrily warned the Kenyan project vet that
what he was proposing was illegal and that he would be struck off the veterinary
register if he proceeded.
 Shortly afterwards, in January 1998, the KVB put a full-page advertisement in
the national newspapers pointing out that it was illegal to train community animal
health workers and that any Vets doing so risked being struck off the veterinary
register.
 This alarmed everyone working on DAH schemes. ITDG and others decided that
the best defense would be to try to get all parties together to discuss the issues
and find a solution.
 But ITDG had no money and had to look for resources from other organizations.
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 OAU/IBAR, still waiting for approval for their proposed CAHW program in Northern
Kenya, was also keen to find a solution. They and The Netherlands Development
Agency (SNV) offered to fund the workshop, provided it was supported by all
stakeholders.
 ITDG then formed a committee of a few individuals, to develop the workshop.
 In view of the sensitivity of the workshop theme, (‘Practice, Policy and the Law
in the Delivery of Animal Health Services particularly in Arid and Semi-Arid Lands
(ASALs)’), ITDG was advised to include representatives of all key parties in the
planning committee.
 The Vet Board letter also unblocked a study of livestock services in ASAL areas
that had been proposed some months earlier by the European Union Rural
Development Adviser.
 The study included stakeholder workshops in each region, and culminated in a
major workshop to discuss the findings in Nairobi in May 1998.
 At around the same time, the DVS finally signed a Memorandum of Understanding
(MoU) allowing PARC-VAC to establish a pilot scheme using CAHWs in Turkana
and West Pokot.
 An international workshop on DAH, focusing on delivery of animal health services
in Eastern Africa, held in Arusha in December added further impetus. In planning
for this workshop, each of the three East African countries (Uganda, Tanzania
and Kenya) had a coordinator
 It was well attended by participants from Kenya, who were impressed by the
degree of interest being shown by other countries, by the evidence of the
effectiveness of CAHW schemes presented by delegates, and the endorsement of
the approach by OAU/IBAR – an increasingly important donor for livestock
services in Kenya.
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 The 8th ITDG Vets Workshop, renamed a DAH Workshop, was held in Meru in
May 1999, following several months planning by a committee including
representatives of all the main stakeholders (ITDG, 1999).
 The program included key presentations from all of the stakeholders, and covered
the right spectrum of participants. The workshop endorsed the CAHW approach
and established multi-stakeholder working groups to develop guidelines and
standards for CAHWs in Kenya, and recommended a review of the legislation and
policy.
 After much negotiation, ITDG obtained funding for a further three-years’ work,
with explicit outputs relating to policy reform.
 The MoU between DVS and PARC-VAC was expanded to include SNV and VSF
(Belgium) as implementing agencies and to cover more divisions in Turkana and
West Pokot.
The 2000 to 2002: rocks ahead
 Between September and November 1999, many new NGOs became involved in
training CAHWs as part of short-term relief programs in ASAL areas following the
1999–2000 drought.
 With only short-term funding, some of these programs were implemented too
quickly, neglecting the essential and time-consuming, community-awareness and
education elements of successful programs.
 Many collapsed as soon as the agency withdrew, attracting criticism from
veterinary professionals and providing evidence of the dangers of the approach
for its opponents.
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 Changes in the executive committee further undermined support in the KVA and
the Annual KVA Conference in April 2000 in Mombasa, narrowly sidestepped a
motion proposing to lobby to ban CAHWs.
 The motion did not go through but gave a clear signal that there was significant
resistance to DAH approach within KVA.
 Surprisingly, there was no discussion at all about CAHWs at the following KVA
Annual General Meeting in April 2001.
 The KVB and DVS finally approved the minimum standards and guidelines for
CAHWs in early 2001, and since then these guidelines have been tested in the
field.
 In the meantime, the animal health policy review process was being carried out,
and at the OAU/IBAR 50th Anniversary Party in November 2001, the Minister of
Agriculture promised to push the new policy through Cabinet if it could be
completed by February 2002.
 The new animal health policy document was duly completed in early 2002 and a
draft submitted to the Permanent Secretary, Ministry of Agriculture and Rural
Development for further scrutiny.
 Some unfortunate drafting in the new Veterinary Practitioners Bill which defined
CAHWs as ‘Veterinary Surgeons’ provoked a very strong reaction at the Annual
KVA Meeting in Kakamega, where delegates strongly opposed any further moves
to legalize CAHWs and proposed to petition for an injunction.
 Recent information indicates that KVA has already petitioned DVS to withdraw
the document to allow inclusion of their input. It seems that it may be a while yet
before CAHWs are finally legalized in Kenya.
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2.2 Market Drivers
Overview
i. Improved focus by the Government on Livestock production hence
Animal Healthcare
ii. Rapid growth of companion animal segment (pet)
iii. Increased participation of Veterinary Practitioners in the private sector
focusing on diagnosis and treatment Main focus of the Government is on
preventive measures
iv. Farmer Education on Animal HealthCare creating awareness on need to
take good care of animals
v. Entrance of multinationals in the market leading to increased Research
and new treatment of diseases
Regulatory Environment in Kenya
a. Overview
Fig 2.1: Map of Regulatory Actors
Since lauching of the strategy for revitalizing Agriculture(SRA) in
2004,the government of Kenya has been undertaking legal and
regulatory reforms in the agriculture sector as one of its priority
programs to revitalize,develop and modernize the sector.
Semi-autonomous institutions
Veterinary Medicine
Directorate (VMD)
Kenya Veterinary Board
(KVB)
Kenya Veterinary Vaccines
Production
Institute (KEVEVAPI)
Kenya Dairy Board
Kenya Agriculture and
Livestock Research
organisation
Kenya Tsetse and
Trypanosomiasis
Eradication Council
Kenya Animal Genetics
Resource Centre
STATE
DEPARTMENT
FOR LIVESTOCK
BUREAUS OF
AGRICULTURE
AND LIVESTOCK
COUNTY
GOVERNMENT
DIRECTOR
OF VETERINARY
SERVICES
Directorate of
Veterinary Services
Directorate of
Livestock services
The county government implement the national
government policies to the extent that the policies
relate to the county and in particular shall be
Responsible for:
i) Crop and animal husbandry
ii) Livestock Sale Yards (Markets)
iii) Abattoirs
iv) Plant and Animal Diseases
v) Fisheries
vi) Veterinary services excluding regulation of the
profession)
Four division
i) Disease surveillance, vector regulatory&
Zoological services.
ii) Diagnostics and efficacy trial venters/vet
farms
iii)Veterinary public governance &
management
Support services
MINISTRY OF AGRICULTURE
LIVESTOCK AND FISHERIES
MAP OF REGULATORY FACTORS
National
County
Level
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Structure, functions and institutions of the ministry of agriculture and livestock
development.
Fig 2.2: Structure, functions and institutions of the Ministry of Agriculture and Livestock
Development
Ministry of agriculture and livestock
development (cabinet secretary)
State for department for livestock
development (principal secretary)
State department for crop development
(principal secretary)
FUNCTIONS
► Livestock policy management
► Development of livestock industry
► veterinary services and disease control
policy
► Range development and management
► Livestock marketing
► Promotion of dairy industry
► Livestock insurance policy
► Livestock branding
► Promotion of bee keeping and apiculture
► Promotion of quality of hides and skins
► Leather sector development and promotion
of value chain
► Livestock research and development
► Animal genetic research
► Tsetse fly and trypanosomiasis research and
control
INSTITUTIONS
► Kenya veterinary vaccine production
institute (state corporations Act
Cap.446 through Gazette Notice No
223 of the 4th June,1990.)
► Kenya veterinary board (veterinary
surgeons and veterinary para
professionals Act No 29 of 2011)
► Veterinary medicines directorate.
► Animals technicians’ council animal
technicians Act No 11, 2010)
► Kenya meat commission (Kenya meat
commission act, Cap 363)
► Kenya leather development council
(Kenya leather development council
Order, No 114 of 2011)
► Kenya Dairy Board (Dairy Industry Act
Cap 336)
► Kenya animals genetic resource
center, Kenya animals genetic
resource center
► Order,2011 (legal notice no 110 of
2011)
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b. Veterinary Medicines Directorate
Veterinary Medicinal products are regulated in Kenya by Veterinary Medicines
Directorate (VMD).
Before the commencement of VMD in 2017, Veterinary medicinal products were being
regulated together with human medicines by Pharmacy and Poisons Board under CAP
244 of the laws of Kenya.
Establishment of VMD
Veterinary Medicines Directorate (VMD) was established pursuant to CAP 366 (article
39) of the laws of Kenya which resulted in the formation of Veterinary Medicines
Directorate Regulations 2015. VMD regulations were operationalized in November
2017.
Role of VMD
The Veterinary Medicines Directorate (VMD) is responsible for regulating the
manufacture, importation, exportation, registration, distribution, prescription and
dispensing of veterinary medicines and other animal health products in Kenya.
VMD roles involve undertaking appropriate regulatory measures to achieve the highest
standards of safety, efficacy and quality for veterinary pharmaceuticals, immunological,
animal pesticides and feed ingredients as well as other animal health products,
manufactured locally, imported, exported, distributed, sold, or used, to ensure the
protection of animal health and welfare, food safety and security as well as public health
and the environment as envisaged by all laws in force in Kenya.
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VMD undertakes their regulatory functions by performing the following activities;
i. Drugs Registration
ii. GMP Inspections (Good manufacturing practices)
iii. Good Distribution Practices (GDP) Inspections – Agrovets, wholesale outlets
inspections
iv. Licensing of Veterinary manufacturing plants and distribution outlets such as
agrovets and wholesalers.
v. Issuing of import and export permits for trade in Veterinary medicines.
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c. The Kenya Veterinary Board (KVB)
 The Kenya Veterinary Board (KVB) was established in 2010 under the Veterinary
Surgeons Act with the purpose of regulating the veterinary profession as well as
facilitating vertical/horizontal public/private partnerships covering veterinary and
livestock related issues.
 As a regulatory body for the veterinary profession the eight-member board is
constituted in the following manner:
I. Four members elected by registered veterinary surgeons and appointed by the
minister
II. Minister nominates two members and two additional members are ex-officio
members i.e., Director of Veterinary Services and the Dean of the Faculty of
Veterinary Medicine, University of Nairobi
III. Minister also nominates the board chairman
KVB Organization Chart
Fig 2.2: The Kenya Veterinary Board
Kenya Veterinary Board
(KVB)
Secretary/CEO
Inspection and
Compliance
Department
Finance, HR and
Admin Department,
services Department
Quality
Assurance
Policy
Research and
strategy
Corporation
secretary and
legal services
Department
Regional
offices
Inspection
Compliance
Education
Registration
Licensing
Finance and
accounts
Hr and
Public
communication
Ict
Research
and
strategy
Quality
assurance and
performance
management
Internal audit
Supply chain
management
Legal
services
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Functions of the Kenya Veterinary Board
Core Functions:
i. Register all veterinary surgeons and for maintaining a registry of retained
veterinary surgeons
ii. License and regulate private veterinary practice
iii. Establish and strengthen veterinary specialist colleges
iv. Formulation and enforcement of a code of ethics across the veterinary
profession
v. Regulate veterinary education while promoting continuous professional
development
vi. Inspect and accredit
laboratories and clinics
animal health training institutions, veterinary
vii. Maintain registry of animal health institutions and animal health service
providers
viii. Monitor animal research and ensure maintenance of minimum animal welfare
standards
ix. Provide technical advice to the ministry of livestock on prevailing and
pertinent issues
x. Promote national, regional and international cooperation on veterinary and
livestock matters
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Other functions
The board also regulates the University of Nairobi and provides supervisory services
over other academic institutions listed below:
► Animal Health and Industry Training Institute (AHITI)
► Meat Training institute
► Kenya Wildlife Service Training Institute
► Dairy Training Institute – Naivasha
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d. Kenya Dairy Board
The Kenya Dairy Board (KDB): Established to facilitate development of a sustainable
and competitive dairy industry that produces safe, quality products and for contributing
to national economic development.
Functions of the KDB:
i. Organize, regulate and develop the efficient production, marketing,
distribution and supply of dairy produce
ii. Improve dairy produce quality
iii. Secure reasonable and stable prices to producers of dairy products
iv. Promote market research in relation to dairy products
v. Permit the highest degree of private enterprise involvement within the
production, processing and sale of dairy produce
vi. Adopt measures and practices that promote efficiencies within the dairy
industry
Additional Responsibilities:
► Promoting quality assurance for attaining high quality products with an
emphasis on milk production hygiene
► Encouraging proper use of milk containers during milk transportation and
storage
► Regulating the sales of raw milk and importation of dairy produce
► Promoting the consumption of quality milk and milk products
► Developing, promoting and providing advice on proper packaging equipment
and materials
► Licensing milk producers and processors
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► Enforcement of the Dairy Industry Act through anti-hawking operations and
prosecutions. This also includes short courses and seminar training for
farmers to produce milk within sanitary conditions and using modern
techniques.
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e. The Kenya Veterinary Association
► The Kenya Veterinary Association (KVA) is the legally chartered and registered
professional association for all veterinary and para-veterinary workers in
Kenya.
► The mandate of the KVA is to act as custodian of the profession, ensuring
proper management of veterinary issues affecting the welfare of veterinarians
with a view toward improving animal welfare.
► Supporting these measures, KVA maintains in-depth checks and balances
structure across the country for sponsoring publications, events and
continuing education programs. They also provide member benefits and
coordination for the government enacted Strategic Plan.
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f. Research Institutes
The Kenya Agricultural and Livestock Research Organization
The Kenya Agricultural and Livestock Research Organization is composed of semi-
autonomous institutes established under the Kenya Agricultural and Livestock Research
Act of 2013.
This Act empowers the Cabinet secretary, in consultation with the KALRO Board to
establish research institutes that may be necessary for the performance of KALRO’s
functions under the Act. The Act also recognizes the role of public universities in
agricultural research and provides for partnerships with them as associate research
institutes. Currently, sixteen research institutes have been established. Under the Act,
the functions of the research institutes under KALRO shall be to:
i. Advise on, and develop appropriate systems to promote balanced, diversified,
and sustained agricultural development and to optimize agricultural production
through adaptive and investigative research
ii. Facilitate the use of improved production technology, and establish adequate
feedback systems from agricultural producers in order to achieve and maintain
national self-sufficiency and export capacities in agricultural products.
It is expected that the Institutes shall conduct research in their respective value
chains and disseminate appropriate information and technologies to intended users.
Although the key mandate of each institute will be restricted, the various research
centers under the administration of each Institute may manage research projects
covering multiple value chains and commodities. The following are the sixteen
research institutes:
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KALRO’s RESEARCH INSTITUTES
Name Location Centers
1. Industrial Crops Research
Institute
Mtwapa: Kilifi County Kikoneni: Lamu County, ICRC,
Mwea: Kirinyaga County, ICRC
Molo: Nakuru County, ICRC
Kandara: Murang’a County
2. Sugar research Institute: Kibos: Kisumu County Kibos, Opapo, Nyando Mumias,
Mtwapa, Kikoneni
3. Tea Research Institute: Kericho County Kericho, Kangaita.
4. Veterinary Research Institute Muguga: Kiambu County Alupe, Muguga North
5. Sheep
Institute
and Goat Research Marsabit County Marsabit, Marimanti, Bachuma,
Macalder
6. Non-Ruminant Research Institute Kakamega town: Kakamega
County
Kakamega, Naivasha
7. Genetic
Institute
Resources Research Muguga South: Kiambu
County
Muguga
8. Biotechnology Research Institute Muguga: Kiambu County Biotech and NARL Kabete
9. Beef Research Institute Lanet: Nakuru County Garissa, Lanet, Mariakani, Trans
Mara
10. Apiculture Research Institute Marigat: Baringo County Perkera, Lenana Training Centre,
Nairobi
11. Dairy Research Institute Naivasha: Nakuru County Naivasha, Ol Joro Orok, Msabaha
12. Horticulture Research Institute Thika: Kiambu County
13. Food Crops Research Institute Trans-Nzoia County
14. Coffee Research Institute Ruiru: Kiambu County
15. Arid and Range Lands Research
Institute
Katumani: Machakos County
16. Agricultural Mechanization
Research Institute
Nairobi County
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Additional Institutions and Laboratories
 The International Livestock Research Institute (ILRI) - Kenya
Headquarters-The Hub for Biosciences eastern and central Africa (BecA)
 Kenya National Veterinary Laboratory Network: Regional reference
laboratories under the Kenya National Veterinary Laboratory Network are listed
below:
i. Mariakani: Serves Coast Counties (Two satellite laboratories at Ukunda and
Witu)
ii. Eldoret: Serves Northern Rift Valley Counties (Satellite laboratory at Lodwar)
iii. Karatina: Serves Central and Eastern Counties (Satellite also in Isiolo)
iv. Nakuru: Serves Southern Rift Valley Counties
v. Kericho: Serves Nyanza and the Western Rift Valley Counties
vi. Garissa: Serves North Eastern County
Fig 2.3: National Veterinary Laboratory Network (KNVLN) Org chart
Ministry of Agriculture and livestock Development
Directorate of Veterinary Services
Diagnostic Services,
Quality
Assurance & Biosafety
Regional veterinary investigation services National investigation services
Mariakani
Laboratory
Eldoret
Laboratory
Karatina
Laboratory
Nakuru
Laboratory
Kericho
Laboratory
Garissa
Laboratory
Lodwar
Laboratory
Isiolo
Laboratory
Witu
Laboratory
Ukunda
Laboratory
Central Veterinary
Laboratories Kabete
FMD/Vesicular
Diseases
Laboratory (NVQCL)
Pathology Helminthology Chemistry Virology Bacteriology Acarology Laboratory
Laboratory Laboratory Laboratory Laboratory Laboratory Laboratory Animal Sciences
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 The Central Veterinary Laboratories, Kabete: It contains the:
o Foot-and-Mouth Disease/Vesicular Diseases Laboratory
o Kenya Veterinary Vaccines Production Institute
Non-Governmental Actors
Role of NGOs and Development Agencies in the AH sector
 Provisions of extension services and
education to SSPs pastoralist on ah
disease and medicines
 Building trust on the ground of outside
agencies
 Grassroots level data gathering from
livestock keepers
 Support national and state government
in policy and strategy development and
implementation
 Financial support and
philanthropy
 Important research, publication
and data collection on livestock
sector
 Acts as interface between local
communities and government
Role of NGOS and
Development
agencies in the AH
sector
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 Partnership building between NGOs and international development agencies
powerful to resolve market failures and policy gaps
 NGOs have an important role of trust building and education especially in the
ASALS with pastoralists
 Improvement in health and outcomes, productivity and reproduction of
animals due to improved access to services.
 program: more milk –
making the most of
milk
 funder: BMGF
 Grantee: ILRI
 Objective: Aim to
generate research
evidence on how
informal milk markets
can be leverage to
improve nutrition and
health, especially in
pre urban settings.
 LD4D site records 40livestock projects in Kenya by 36 grantees
 Main funders BMGF, DFID USAID.
 Grantees include academic /research organization (e.g., ILRI), NGOs (e.g.
Save the children UK) private organization (e.g. land O’lakes) or un
agencies (e.g. UNICEF)
 Program index-based
livestock insurance
 Funder: DFID
 Grantee: crown agent
bank
 Objective: uses
satellite technology to
protect pastoralists in
remote arid and
drought prone range
lands of Kenya from
the impacts of
extreme weather.
 Program: Kenya
diary sector
competitiveness
program
 Funder: USAID
 Grantee: Land O’lakes
international
 Objective: strengthen
the competitiveness of
Kenya’s dairy industry
through increasing
economic revenues in
the entries daily value
chain, particularly for
the small holder
farmers
Objectives of there
work in Kenya
Examples of
livestock related
programs in Kenya
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Acts and Laws Regarding Food Safety and Livestock
The Acts of Parliament directly or indirectly associated with the governing of
veterinary matters include:
i. Veterinary Surgeons and Veterinary Para-Professionals Act - ACT NO. 29 of 2011
ii. Animal Technicians Act - ACT NO. 11 of 2010
iii. Agricultural Development Corporation Act - Chapter 444
iv. Meat Control Act - Chapter 356
v. Dairy Industry Act - Chapter 336
vi. The Agriculture Act - Chapter 318
vii. Animal Diseases Act - Chapter 364
viii. Biosafety Act - ACT NO. 2 of 2009
ix. Cattle Cleansing Act - Chapter 358
x. Public Health Act - Chapter 242
xi. Radiation Protection Act - Chapter 243 (In the case of irradiated Foods)
xii. Food, Drugs and Chemical Substances Act - Chapter 254
xiii. Customs & Excise Act - Chapter 472
xiv. The Standards Act - Chapter 496
xv. Pest Control and Products Act - Chapter 346
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2.3 Market Restraints
Overview
i. Challenging Regulatory Environment across the Value Chain
ii. Limited access to Veterinary services due to low numbers of practitioners and
long distance covered to reach farmers
iii. Lack of knowledge to Veterinary Practitioners on new treatment methods and
Business acumen.
iv. High costs across value chain making it difficult for farmers to access services.
Practitioners have to visit the patients on the farms unlike in small animal
clinics
v. Government Budgetary constraints in this sector
vi. Lack of official Market data making it difficult for stakeholders to make informed
decisions.
vii. Lack of linkages between Pharmaceutical Industry and academicians for market
Research on Animal HealthCare.
viii. Unethical market practice
ix. Unclear value of treatment of animals by Veterinary practitioners to farmers.
Farmers not valuing work of the clinicians due to competence issues.
(Attitudinal factors)
x. Use of traditional methods to treat animals
xi. Lack of drug inspectors / Pharmacovigilance leading to malpractices and
antimicrobial resistance.
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xii. Social Cultural factors and Historical factors e.g. Maasai’s and ASAL See
themselves as practitioners
Animal health service delivery in Arid and Semi-Arid Lands (ASALS)
 Animal health service delivery in Arid and Semi-Arid Lands (ASALS) can be a
major challenge due to the harsh and inhospitable climatic conditions in these
regions.
 The scarcity of water and vegetation, along with the dispersed nature of the
livestock populations, can make it difficult to deliver veterinary services to these
areas.
 However, despite these challenges, there are a number of approaches that can
be taken to improve animal health service delivery in ASALS.
o One approach is to make use of mobile veterinary clinics, which can
travel to remote areas to provide veterinary care. These clinics can
be equipped with basic diagnostic equipment, medicines, and
supplies, and can be staffed by trained veterinarians and animal
health workers.
o Another approach is to train local animal health workers to provide
basic veterinary services in their communities. This can help to
increase access to veterinary care in remote areas, and can also help
to build local capacity to respond to animal health emergencies.
o Another important aspect of animal health service delivery in ASALS
is disease control. Many diseases, such as tick-borne diseases and
outbreaks of infectious diseases like Rift Valley fever, can have a
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significant impact on livestock populations in these areas. A
coordinated approach to disease control, involving the use of vaccines
and other measures to prevent the spread of disease, can help to
reduce the impact of these diseases on livestock and the communities
that rely on them.
 In addition to these interventions, it is also important to address underlying
factors that can impact animal health, such as malnutrition and poor herd
management practices.
 This can be achieved through the provision of animal health extension services,
which can help farmers to improve their herds' nutrition and management
practices, thereby improving animal health and productivity.
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Constraints to animal health service delivery in Arid and Semi-Arid Lands
(ASALS)
a. Effects of the structural adjustment policies
The provision of Animal Health Care (AHC) in sub-Saharan Africa has been the
responsibility of the state veterinary services for many years. Private veterinary
services were non-existent or, if present, located in more lucrative urban areas.
Livestock services were among the first rural services targeted for privatization under
the structural adjustment programs, particularly in sub-Saharan Africa.
Budgetary allocations for veterinary departments decreased gradually until state
veterinary services became almost dysfunctional. International experts made bold
efforts to retain veterinary regulation and management of epizootic diseases within the
public domain but pushed curative animal health care into a private market. This
restructuring was, however, implemented hurriedly before the establishment of
alternative suppliers within the private sector and the enactment of policies and legal
frameworks that could assure quality of animal health services. To compound the
situation the veterinary profession and authorities were very slow to respond, and the
increasing financial constraints effectively paralyzed government services by the late
1980s and early 1990s.
The combination of poor financial resources and an inadequately organized Veterinary
Services has often led to deterioration in animal health services, with endemic diseases
frequently spreading unchecked. The resurgence and unchecked spread of diseases
such as Peste des petits ruminants (PPR) and Contagious bovine pleuropneumonia
(CBPP) in many parts of Africa can be related to the breakdown of national veterinary
services. Control of ticks and tick-borne diseases such as East Coast Fever (ECF) has
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deteriorated, in many cases along with provision of healthcare to pastoral communities.
As a result, Structural adjustment policies (SAPs) for sector reforms did not result in
adequate provision by the private sector and civil society of essential services and
markets as was intended. The result is that the great majority of the rural poor do not
enjoy access to the range and quality of services and markets that they need to support
a robust livestock related livelihood.
b. Constraints related to infrastructure
Pastoral areas in the horn of Africa are characterized by their large size, limited
development, poor infrastructure and insecurity. Human populations tend to be small,
highly mobile and difficult to reach unless on foot or in a four-wheel drive vehicle.
Besides, given that markets in Kenya are thinly spread, institutions for contract
enforcement are weak, and infrastructure is underdeveloped, the veterinary service
privatization program has had varied impact in different regions, with these marginal
areas receiving minimal attention.
c. Financial constraints and changing government policies
Financial constraints and the changing government policy on provision of services in
many developing countries have severely curtailed the quality and the effectiveness of
veterinary services being provided. The current trend is for the government veterinary
services to be decentralized and for clinical and preventive animal care to be handed
over to the private sector. Whilst this has had some success in areas of high agricultural
potential, professional success rates in rural areas have been low. The impact of this is
being felt more in the ASALs, which are already disadvantaged by having inadequate
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numbers of veterinary personnel, poor infrastructure, high degree of insecurity and
recurrent drought.
Other common diseases in pastoral areas that are a major constraint to livestock
production and which also need to be targeted include Rift Valley Fever (RVF),
contagious caprine pleural pneumonia (CCPP), Foot and Mouth Disease (FMD), mange,
non-specific diarrhea, orf/pox, enterotoxaemia, mastitis, anthrax, black quarter,
ringworm, Peste petits des ruminants and endo and ectoparasites.
Development partner investments involves deregulation and the deployment of
privately operating paraprofessionals commonly referred to as community animal
health workers, is often perceived as a threat to the veterinary profession and may
result in limiting access to international markets for the trade of livestock and livestock
products. Moreover, although livestock owners in ASALs are willing to pay for drugs
and services, the demand for quality products is not satisfied by the existing illegal and
“black market centered” drug supply system. Most of these ASAL livestock owners use
commercial veterinary drugs and, to a lower extent, vaccines from “hawkers”, who
sometimes barter them against goats. While vaccines are not used in most cases
because of poor availability, poor handling and quality reduces the efficacy of those
available. The researchers also noted that the pastoral livestock producers had to walk
long distances to access services and buy these inputs of suspect quality and efficacy.
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d. Weak Legal frame-work and Institutions
The key weaknesses of legal and institutional frameworks that support the livestock
industry include: regulation and facilitation of services such as animal breeding
services, feed production, privatization of veterinary services, regulation of veterinary
drugs, resolution of livestock/wildlife conflicts, quality assurance of livestock inputs and
products, coordination of research and extension, information as well as monitoring
and evaluation of projects and programs. In addition, there are no mechanisms in place
to identify the constraints to livestock production, the service needs of poor livestock
keepers and the ways and means to deliver them at affordable costs. The policy
priorities and directions for service delivery often get determined by the biases and
beliefs of the decision and policy makers. Moreover, lack of strong institutional support
such as provision of credit facilities, research and policy, legal and regulatory
frameworks has exacerbated agricultural woes. Unfortunately, there is no consensus
among the livestock sector professional as while veterinary scientists argue that it is
the poor animal health which is the main constraint to livestock
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e. Research and extension
Institutions of higher education, research and extension are, in general, poorly staffed,
ill equipped and under-funded to provide the scientific and technological foundations of
a structural and sustainable transformation of the national food and agricultural system.
As a result, these systems remain largely ineffective for developing and extending
technologies that respond to farmer’s needs. Kenya is trying to revitalize its extension
services.
a) Low-input low-output subsistence production system dominates the ASALs
b) Pastoralists, primarily low-income earners, predominantly see livestock as assets
to be maintained and expanded, only selling, when necessary, rather than when
they could get the best price
c) Pastoralism accounts for 60-65% of Kenya’s meat supply and 80-90% of the red
meat consumed in Kenya
d) Lack of information across the supply chain undermines pastoralists access to
and benefit from formal markets
e) Highly vulnerable climate change, Kenya’s pastoralists have been affected by
consecutive droughts in recent years
f. Access to Financial Services
 Limited uptake by Small Scale Producers (SSPs) and pastoralists, hindering their
ability to buy quality inputs
Access to financial services for actors in the livestock value chain remains a challenge,
especially for SSPs and pastoralists. Private financial institutions mainly serve large
dairy operations but coverage of smaller and remote actors is currently left to public
institutions and government-led programmes.
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ACCESS TO FINANCE
 Low access to agricultural finance;
15% coverage (formal and
informal), despite high ranking in
Doing Business index regarding
access to credit regulations.
 High cost of credit for players along
the livestock value chain.
 Most affected groups: SSPs,
pastoralists, women and youth, who
lack collateral required by
conventional financial institutions.
 Majority from this group access
credit through CBOs, which is
expensive and insufficient.
 The Agricultural Finance
Cooperation (AFC) established by
the GOK in 1963 to provide
affordable credit to farmers,
struggles to meet demand and has
limited coverage in the ASALs.
 Examples of financial institution
providing credit to livestock farmers:
the Kenya livestock finance trust (K-
lift) equity bank, Kenya Woman
Finance Trust, Family bank
 Current depreciation trend of the
Kenyan shillings pauses a challenge
for actors relying on imports
LIVESTOCK INSUARANCE
 uptake of insurance< 1% across
agricultural population
 only a few insurance companies offer
livestock insurance on commercial
bases and mostly cover high value
daily animals
 Kenya Livestock Insurance Programme
(KLIP) launched by the GOK in 2015 to
protect pastoralists against climate
shocks through subsidized satellite-
based index insurance for livestock. As
of July 2018, programme had paid
cash 400MN in premium and over Kshs
700mn in payouts 32k beneficiaries.
 Causes of limited uptake of livestock
insurance common across markets:
► Risk associated with livestock
farming such as drought and
diseases
► Limited awareness of insurance
products
► Inadequate date for designing
insurance products
► Inadequate capacity of SSPs to
pay premiums
► High cost of delivery of
insurance services, especially in
the ASALS
Source 1.: National Livestock Policy 2019 2: AFC Baseline Survey Report 3: livestockkenya.com 4: GoK
g. Access to market data and extension
 Suboptimal management and dissemination of market data and extension services
The lack of credible market information is especially significant in remote livestock markets.
Advancements in technology and infrastructure are key to improve the access of livestock
producers to market data and extension services.
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ACCESS TO LIVESTOCK MARKET DATA
 An ILRI study from 2017 found that the
collection and dissemination of livestock
market data, while widespread, is
currently suboptimal.
 Lack of coordination and high costs of
data collection efforts due to technical
and infrastructural challenges, leading to
an unnecessary information asymmetry
along the value chain, uniformed HH
decision-making, and poor service
delivery.
 Advances in ICT have created new
opportunities for Innovative ways to
improve access to market data and
services.
 The Kenya Livestock Marketing Council
(KLMC) aims to provide reliable market
information to livestock producers and
traders across the country. The
organization supports 42 markets being
monitored under the National Livestock
Market Information system (NLMIS)S, a
unified system of information on prices of
different livestock species.
TRAINING & EXTENSION SERVICES
 Livestock extension is the mandate of the
county governments while the national
government formulates policy, standards
and builds capacities of service providers.
 Other extension service providers: agro-
veterinary pharmaceutical companies,
animal feed manufacturers, milk
processors, NGOs and CBOs e.g. World
Bank Kenya Agriculture Productivity and
Agribusiness Project (2009-2015)
 Limited collaboration among extension
service providers leading to duplication
and conflict of interests.
 Inadequate collaboration between
research, training and extension, results
in limited access and poor quality of
services.
 Inadequate staffing and funding for
delivery of services at county level, while
FAO recommends a 1:400 extension
worker farmer ratio, Kenya’s ratio is
1:700 for intensive mixed farming system
1:640 for agro-pastoral system and
1:1000 for pastoral systems.
Source 1: National Livestock Policy 2019 2: ILRI study 3: Kansas City State University Study 4: World Bank Project
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h. Market Imperfections and Asymmetric Information in
the Animal Healthcare Market
The framework of incomplete market information can be applied to the animal
healthcare sector to analyze the service-seeking behavior of livestock farmers. In a full-
information market, livestock farmers seeking healthcare services of a given quality
should obtain them at the lowest cost possible. Likewise, income-maximizing animal
healthcare service providers should be able to assess the farmers’ willingness to pay
and charge the maximum fees possible. However, in a market with information
imperfections, livestock farmers may have a general knowledge of the price spread but
not of the actual fees charged by each service provider. Consequently, they choose an
optimal amount of search, balancing the cost of search with the amount of savings from
finding a lower price. This strategy is especially common when there is a wide spectrum
of service providers to choose from.
Animal healthcare service providers evaluate the cost of clinical and prophylactic
services based on the nature of the disease, qualification of the healthcare practitioner,
means of transportation, and perceived wealth of the client.
A client’s ability to pay is assessed by such criteria as type of housing, breed of animals,
and farm layout influences the fees for clinical services. Accordingly, the fees charged
for a given service vary a great deal both within and across different service providers.
Most livestock farmers are either unable (or do not bother) to assess the professional
qualification of animal healthcare service providers.
The title “doctor,” meant for a qualified professional veterinarian, is used for all service
providers, irrespective of their qualifications. The paraprofessionals working with the
professionals often observe the rates charged by their supervisors for given cases and
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subsequently use these as guidelines for their own fee structures. Given the farmers’
inability to differentiate between a professional veterinarian and a paraprofessional,
uniform charges are often levied to specific clients.
Most animal healthcare practitioners do not clearly itemize their charges into
transportation costs, professional fees, and margins on drugs. In fact, few professional
veterinarians and paraprofessionals fix their professional fees for cases, even though
guidelines are provided by the Kenya Veterinary Association (KVA). The general trend
is to consolidate the charges into a single fixed fee, and farmers are often made to
believe they are paying for the drugs rather than for a professional service. As a result,
livestock farmers face ex ante search and information costs in the animal healthcare
delivery market.
It is hypothesized that transaction cost is one of the key factors influencing the choice
of animal healthcare service provider.
The distance to the nearest alternative clinic run by a paraprofessional and frequency
of use of animal healthcare services positively influence the probability of consulting a
veterinarian. Professional qualification is not critical in the choice of service provider.
The density of veterinarians in a particular zone, frequency of transactions, ethnicity of
a service provider, and frequency of previous contact influence the probability of
consulting a professional veterinarian and Para veterinarians. Service providers of
similar ethnic background to their clients are likely to have a higher degree of trust
from the farmers. Following repeated transactions, farmers are better able to assess
the quality of services provided by a given provider. Trust based on reputation is thus
built among the transacting parties. Likewise, members of a similar ethnic group belong
to the same social networks.
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2.4 Market Opportunities
Overview
i. Increase in significance of Livestock production in Kenya by the Government
and Farmers leading to focus on Animal HealthCare. Improving Animal Health is
fundamental to improving overall productivity. Need to establish disease free
zones to improve export trade in Livestock.
ii. Farmers acknowledging professionalism in Animal HealthCare
iii. Growing Companion animal / Pet Industry
iv. Great focus on private sector by Veterinary practitioners
v. Partnership of Veterinary practitioners and farmers with the Pharmaceutical
Sector which is currently very low.
vi. Working closely with Farmers Cooperatives and Livestock producers to improve
accessibility of Veterinary services to small scale livestock owners thus
economies of scale in supply of drugs.
vii. Focus on ASAL areas. It is in this Arid and Semi-arid land that livestock tend to
be at greatest risk from diseases and drought. Great potential in working with
NGO’s in this area.
viii. Training of Veterinary practitioners in Business Acumen by the Pharmaceutical
Industry
ix. Focus on ranches and higher rainfall areas of the Country with high potential in
Dairy Industry.
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2.5 Key Challenges in the Market
Overview
i. Animal Health specialists are considered as a measure of last resort.
ii. Intense price competition (due to generics, parallel imports counterfeits
etc.) within the industry
iii. Kenya’s National Economic difficulties and prolonged periods of drought
iv. Tax burdens and lack of adequate product protection across the value
chain.
v. Large number of informal unregistered suppliers of Veterinary products
vi. Fragmented Regulatory sector that lacks enough human resource etc
vii. Few Veterinary practitioners in the private sector
viii. Lack of key market data to assist in decision making along the entire value
chain.
ix. High costs of animal healthcare.
x. Profit margins are low coupled with high cost of distribution expenses
xi. Antimicrobial resistance due to non-professionalism in the sector
3. MARKET SEGMENTATION AND GEOGRAPHICAL
ANALYSIS
1. Structure of the Veterinary (Animal) Pharmaceutical Industry
The veterinary pharmaceutical industry consists of three segments:
 The manufacturers/importers,
 The distributors/wholesalers
 The retailers.
The veterinary pharmaceutical industry interconnectedness with other sectors and its
significant investments in technology, research, and development mean that the
industry’s gains can have an outsized effect on the economy as a whole. The domestic
veterinary pharmaceutical industry in Kenya shows considerable strengths and has
significant opportunities for growth and development.
As per the Kenyan Government, the veterinary pharmaceutical products are
categorized according to particular levels:
A. Veterinary pharmaceuticals
B. Biologicals
C. Alternative medicines
D. Nutrients (Pre-mixes)
E. Veterinary pesticides
F. Equipment and materials of veterinary relevance
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Animal Health Market Research Surgipham Final Report10032023.pptx

  • 1. Surgipharm Limited Scoping Study on The Animal (Veterinary) Healthcare Market in Kenya Prepared By Study Period: January - March 2023 Confidential & Proprietary to Surgipharm Limited K E N Y A
  • 2. Confidential Surgipharm Limited Confidential & Proprietary This document contains confidential information that is proprietary to Surgipharm Limited. This information is provided for the sole purpose of permitting the recipient to read and derive required information as per the needs of Surgipharm. In consideration of receipt of this document, the recipient agrees to maintain such information in confidence and not to reproduce or otherwise disclose this information to any person outside the group directly responsible.
  • 3. Confidential Surgipharm Limited FOREWORD About Surgipharm Surgipharm, an Imperial Company, was founded in 1985 with the objective of establishing a country-wide network of pharmaceutical marketing and distribution. Today Surgipharm, through its branches in Nairobi and Mombasa and a highly motivated team of 395, is the largest, most efficient and reliable pharmaceutical company in Kenya. Surgipharm’s mission is to maintain a leadership position in the healthcare industry built on a strong heritage of Quality, Ethics, Compliance and Trust in the marketing and distribution of healthcare products. Surgipharm continues to be the preferred distributor for principals and the most valued supplier for route to patient partners in Kenya. Surgipharm intends to expand its product offering portfolio into the Animal Veterinary Market (Production and Companion Animals), hence the need to commission this scoping study.
  • 4. Confidential Surgipharm Limited About the Scoping Study In order to help define a clear market entry strategy, Surgipharm Limited contracted Ecryp Technology Solutions Ltd to contact a scoping study on animal health. Study Objectives 1. To establish the extend of the Kenyan market for animal health products that include veterinary drugs and vaccines 2. Establish actors in animal health services, elucidate their experiences, opportunities, challenges and recommendations 3. Identify strengths, opportunities, weaknesses and threats in the Animal Health Products 4. Find out supply, demand and barriers to optimal access to appropriate Animal Health Products 5. Establish the marketing strategies adopted by Animal Health Pharmaceutical Firms in Kenya to enhance performance. 6. Carry out landscape PESTEL analysis on animal health products market. 7. Make recommendations on best market entry strategy
  • 5. Confidential Surgipharm Limited Study Outputs I. Regional synthesis, analysis and forecasts of the study market; providing insights on the regions in which the animal health products industry is blooming and potential for scale up. II. Identification of current market value, key drivers, restraints, opportunities, and challenges (DROC) in the market and their impact on feasibility for new products, product mix and pricing dynamics. III. Study of the effect of exogenous and endogenous factors that affect the market; which includes broadly demographic, economics, and political, among other macro-environmental factors presented in PESTLE Analysis IV. Study of the competitive factors that determine the overall profitability of an Industry, using Porter’s five forces analysis for analyzing the level of competition and business strategy development. V. Identification and stakeholder analysis of the market players along with their product portfolio, current strategic interests, key financial information, legal issues, SWOT analysis and potential for a sustained the market environment. VI. Develop a business case along with investment opportunities to provide both individuals and organizations a strong financial foothold in the market
  • 6. Research Methodology Report Writing 6 Data 5Triangulation Expert Validation 4 Econometric 3Modelling 1Secondary Research Primary Research2 Confidential Surgipharm Limited
  • 7. Confidential Surgipharm Limited About Ecryp Technology Solutions Ltd Ecryp Technology Solutions Ltd established in the year 2005, has a team of researchers with expertise in M&E, animal breeding, disease modelling, econometric/statistical analysis, Data gathering and management technologies. The team has been working on various projects in partnership with Agriculture and Food Authority Kenya, National Aids Control Council, Centre for Population Health Research and Management (CPHRM Consortium),3r Dairy Project SNV, Mastercard Foundation, KCB Foundation, Intra Health, IFAD, ILRI,USAID, CDC-Kenya, GIZ CARE,KEMRI-Wellcome Trust in various monitoring, evaluation, research, technological and skills development assignments The team has excellent competencies in research design, research technologies, evaluations, data management, data collection methods, analyzing data using statistical software (R, STATA, NVIVO, SPSS, MATLAP, PHP, Python).
  • 8. Confidential Surgipharm Limited Table of Contents ................................................................................................................................................................................................. 1 CONFIDENTIAL & PROPRIETARY ....................................................................................................2 FOREWORD ....................................................................................................................................................3 About Surgipharm........................................................................................................................................................... 3 About the Scoping Study ............................................................................................................................................. 4 Study Objectives ......................................................................................................................................................................4 Study Outputs ...........................................................................................................................................................................5 Research Methodology...........................................................................................................................................................6 About Ecryp Technology Solutions Ltd ................................................................................................................. 7 ACRONYMS AND ABREVIATIONS...................................................................................................12 1. EXECUTIVE SUMMARY ..................................................................................................................14 1. Overview ................................................................................................................................................................... 14 ............................................................................................................................................................................................... 14 2. Key Findings ............................................................................................................................................................ 15 2. MARKET DYNAMICS........................................................................................................................27 1. Trends Impact Analysis...................................................................................................................................... 27 The Evolution of Animal Healthcare in Kenya.............................................................................................................27 2. Market Drivers ........................................................................................................................................................ 40 Overview ...................................................................................................................................................................................40 Regulatory Environment in Kenya...................................................................................................................................41 Non-Governmental Actors ..................................................................................................................................................57 Acts and Laws Regarding Food Safety and Livestock..............................................................................................58 3. Market Restraints.................................................................................................................................................. 59 Overview ...................................................................................................................................................................................59 Animal health service delivery in Arid and Semi-Arid Lands (ASALS) ..............................................................60 Constraints to animal health service delivery in Arid and Semi-Arid Lands (ASALS) .................................62 4. Market Opportunities .......................................................................................................................................... 71 Overview ...................................................................................................................................................................................71 5. Key Challenges in the Market.......................................................................................................................... 72 Overview ...................................................................................................................................................................................72 3. MARKET SEGMENTATION AND GEOGRAPHICAL ANALYSIS .................................73
  • 9. Confidential Surgipharm Limited 1. Structure of the Veterinary (Animal) Pharmaceutical Industry.....................................................73 2. Categories of veterinary medicines.............................................................................................................. 74 3. Size and segmentation of the animal healthcare market in Kenya............................................... 75 4. Product classes ...................................................................................................................................................... 77 5. Players in the Animal Health Market in Kenya........................................................................................ 80 6. Small Animal Sector Market Segments....................................................................................................... 81 7. Over the Counter Products (OTC) ................................................................................................................. 84 3.7 Clinical Complexity ............................................................................................................................................... 85 4. STRATEGIC ANALYSIS ..................................................................................................................89 1. Strategic Analysis of Animal Healthcare Products................................................................................ 89 PESTEL Analysis on Animal Healthcare Products.......................................................................................................90 Porters Five Forces Analysis..............................................................................................................................................91 2. Factors affecting farmer decision on the use of animal health products...................................92 3. SWOT Analysis of the Kenyan Animal Healthcare Industry.............................................................. 93 Strength ....................................................................................................................................................................................93 Weakness..................................................................................................................................................................................94 Opportunity ..............................................................................................................................................................................95 Threats.......................................................................................................................................................................................96 5. COMPETITIVE LANDSCAPE ........................................................................................................97 1. Manufacturers......................................................................................................................................................... 97 Registration of Veterinary Medicines..............................................................................................................................97 Veterinary Medicines manufacturers in Kenya...........................................................................................................98 Opportunities and challenges for manufacturers in Kenya....................................................................................99 ......................................................................................................................................................................................................99 Manufacturers: Overview .................................................................................................................................................100 Types of manufacturers ....................................................................................................................................................101 Market entry models for international manufacturers...........................................................................................102 Vaccine production in Kenya ...........................................................................................................................................103 International and National Private Manufacturers ..................................................................................................107 Examples of manufacturers .............................................................................................................................................109 Challenges facing manufacturing plants.....................................................................................................................110 Mitigation on Challenges facing manufacturing plants..........................................................................................111 2. Importers, Distributors and Wholesalers................................................................................................ 112 Importers, distributors and wholesalers: Overview ...............................................................................................112 Importers, distributors and wholesalers: Example.................................................................................................113 3. Retailers .................................................................................................................................................................. 114 Retailers: Overview.............................................................................................................................................................114 Retailers: Examples ............................................................................................................................................................115
  • 10. Confidential Surgipharm Limited 4. Animal Health Product flow control ........................................................................................................... 116 Diagram of the possibilities of product flow control by different sectors .......................................................116 General Animal Health Product Flow: Key Learnings.............................................................................................116 General Animal Health Product Flow: Diagram........................................................................................................117 Biologicals Animal Health Product Flow: Key Learnings .......................................................................................117 Biologicals Animal Health Product Flow: Diagram...................................................................................................118 Vitamins and Supplements: Animal Health Product Flow: Key Learnings .....................................................118 Vitamins and Supplements: Animal Health Product Flow: Diagram ................................................................119 Pharmaceuticals: Animal Health Product Flow: Key Learnings..........................................................................119 Pharmaceuticals: Animal Health Product Flow: Diagram .....................................................................................120 5. Veterinary Services Delivery Systems ...................................................................................................... 121 6. Challenges facing Veterinary Regulatory Environment .................................................................... 124 7. Mitigation on challenges facing Veterinary Regulatory Environment........................................ 125 8. Pharmacovigilance system ............................................................................................................................. 126 9. Marketing strategies adopted by Animal Health Pharmaceutical Firms in Kenya ...............127 Pricing Strategy ....................................................................................................................................................................127 Product Strategy ..................................................................................................................................................................128 Place Strategy .......................................................................................................................................................................129 Promotion strategy..............................................................................................................................................................130 10. Trends and Innovations ................................................................................................................................ 132 SIDAI AFRICA LTD.: Innovation through vertical integration ............................................................................132 Digi Cow: An uber” like platform for Small Scale Producers in Kenya............................................................133 6. RECOMMENDATIONS: .................................................................................................................134 OVERVIEW...................................................................................................................................................................... 134 MARKET ENTRY STRATEGY (KENYA) ................................................................................................................. 135 WHERE? ...................................................................................................................................................................................135 WHAT? .....................................................................................................................................................................................135 WHY? ........................................................................................................................................................................................137 WHO? .......................................................................................................................................................................................138 HOW? .......................................................................................................................................................................................139 MAJOR CHALLENGES.................................................................................................................................................. 143 7. REFERENCES .....................................................................................................................................145 8. ATTACHMENTS.................................................................................................................................148 Appendix 1: Notifiable Diseases in Kenya, 2015 ........................................................................................ 149 Appendix 2: Notable Diseases Reported in Kenya in the last 10 ......................................................... 151 Appendix 3: List of Licensed Veterinary Manufacturers in Kenya ....................................................... 152
  • 11. Confidential Surgipharm Limited Appendix 4: Manufacturers and Distributors of Veterinary Medicines in Kenya .......................... 153 Appendix 5: Veterinary Pharmaceuticals Registered Drugs................................................................... 154 Appendix 6: Registered Veterinary Biologicals ........................................................................................... 156 Appendix 7: Registered Veterinary Pest Control ........................................................................................ 158 Appendix 8: Registered Veterinary Biocidal ................................................................................................. 160 Appendix 9: Registered Veterinary Feed Additives ................................................................................... 162 Appendix 10: Registered Veterinary Medical Devices.............................................................................. 164
  • 12. Confidential Surgipharm Limited ACRONYMS AND ABREVIATIONS AH: Animal Health AHTs: Animal Health Technicians AHTTAK: Animal Health Technician Association of Kenya AMR: Anti-Microbial Resistance ASALs: Arid and Semi-Arid Lands CAHWs: Community Animal Health Workers DAH: Decentralized Animal Health DVS: Directorate of Veterinary services GDP: Gross Domestic Product GMP: Good Manufacturing Practices GoK: Government of Kenya HHs: House Holds ILRI: International Livestock Research Institute ITDG: Intermediate Technology Development Group KALRO: The Kenya Agricultural and Livestock Research Organization KALT: Kenya Association of Livestock Technicians KDB: The Kenya Dairy Board KASPA: Kenya Animal Scientist Practitioner Association KFC: Kamujini Farmers Centre KNVLN: Organizational chart for the National Veterinary Laboratory Network KVA: Kenya Veterinary Association KVB: The Kenya Veterinary Board KVPA: Kenya Veterinary Paraprofessional Association
  • 13. Confidential Surgipharm Limited KVAPS: Kenya Veterinary Association Privatization Scheme NORAD: Norwegian Overseas Aid NGO: Non-Governmental Organization OAU-IBAR: Organization of African Unity-Interafrican Bureau for Animal Resources PARC: The Pan African Rinderpest Campaign SSA: Sub Saharan Africa SSPs: Small Scale Producers TRVTT: Thermostable Rinderpest Vaccine Technology Transfer VMD: Veterinary Medicines Directorate
  • 14. 1. EXECUTIVE SUMMARY 1. Overview Animal Health (AH) actors have an opportunity to leverage Kenya’s stable and open market, as the country continues the animal sectors transformation from subsistence to commercial undertaking Fig 1.1 Market Overview  Low AH awareness among SSPs  Ease of doing business and favorable trade conditions  Infrastructure (challenges Reaching the ASALs)  Unmet demand, especially among SSPs and pastoralists  Low vaccination coverage  Strong institutional/regulatory frameworks  Low quality of some Products in the market Leading to AMR  Small but growing companion segment  Relatively low number of Qualified AH professionals  High digitization (e.g. Wide adoption of mobile money) Climate change Vulnerability Kenya 2023 Ripe & Ready Innovative Hold Greenfield Ease of doing business AH market Evaluation Matrix AH market opportunity Confidential Surgipharm Limited
  • 15. Confidential Surgipharm Limited 1.2 Key Findings ► Kenya’s stable economy and liberalized trade system make it one of the easiest countries in SSA to do business. o Annual GDP growth averaged 5.6% between 2009-2019. o Ranked 3rd in SSA in the Doing Business Index (and 59th worldwide). ► One of the largest livestock populations in Africa (60% of the households keep livestock), Kenya’s growing livestock market holds a huge growth potential for the years to come. o Livestock represents 40% of agricultural GDP, 12%of total GDP. o Value of livestock and livestock products raised from $833M USD in 2012 to $1,394M USD in 2019. o Projected increase in consumption of animal products (e.g., demand for beef expected to increase by over 170% between 2010 and 2050). o Small companion animals’ segment, growing rapidly with urbanization. ► Compared to other countries in the region, Kenya has a mature AH sector, governed by established institutions. o Ranked 1st in SSA by the Sustaining Livestock indicator, measuring the quality of manufactured feeds and veterinary products in the country. o The creation of the Veterinary Medicine Directorate (VMD) in 2017 helped consolidate main AH regulatory activities in a single dedicated entity. o Cost and timescales of product registrations can be significant. o An advanced agri-tech ecosystems, nearly 30% of all agri-tech start-ups in SSA operate in Kenya, with 18% also headquartered there.
  • 16. Confidential Surgipharm Limited ► Kenya’s AH sector’s main potential lies in the shift from a treatment to a preventive approach and improving AH awareness o Vaccination coverage is low at 10% (2014) versus the 2030 target of 80% o Urbanization (50% of people expected to live in urban areas by 2050 vs 27% in 2019), leading to increases in infectious and zoonotic diseases. o Improper use and poor quality or counterfeit products are eroding SSP trust and leading to high levels of AMR, impacting both animals and humans o Large commercial farms typically have good prevention practices and diagnostic capabilities o SSPs and pastoralists (72% of livestock holders) are underserved and represent significant AH opportunities ► AH product distribution is dominated by the private sector, with an increasing presence of national actors playing multiple roles across the value chain o Direct exporting is the main market entry strategy for international manufacturers, giving importers significant influence. o The growth of national private manufactures is changing the ecosystem o Counties have a small role in the AH product flow, except for vaccines o Agro-dealers (over 10k across the country) play a key role as main suppliers to SSPs, and large product volumes flow through them o Kenya’s significant dairy sector drives high supplements volumes, with growth driven by need for productivity to meet demand o Pharmaceuticals are the main product category sold informally
  • 17. Confidential Surgipharm Limited ► Agriculture is the main driver of economic growth o Major contributor to the economy contributing about 34.15% to GDP (2019) and 53.81% to employment (2020) o Sector accounts for 50-65% to export value. Vegetable product exports totaled $3.01BN USD in 2018(48.5% tea.20.4%cut flowers) o Net importer of animal products with imports totaling $150M USD (23% sheep and goat meat) in 2019 o Ag sector performance decelerated from 6.1% growth in 2018 to 3.6% in 2019, mainly due to extreme weather phenomenon (suppressed long rains) o County governments’ expenditure grew by 300% between FY15/16 and FY19/20 o Farm size and productivity are highly heterogeneous o SSPs dominate the agricultural landscape, mainly cultivating maize, beans, potatoes and keep cattle, small ruminants and poultry
  • 18. Fig 1.2: GDP Share of Agriculture (%) Fig 1.3: Agriculture Added Value (%BN USD) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 24 26 28 30 32 34 36 GDP share of agriculture (%) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 10 20 30 40 Agriculture added value (%BN USD) Confidential Surgipharm Limited Source: https://www.theglobaleconomy.com Source: https://www.theglobaleconomy.com
  • 19. ► Kenya Animal Health Market Structure o Kenya is a meat deficit country, despite being a leading exporter of processed meats and chilled carcasses o Import of live animals is much greater than exports. On the first semester of 2019, the import value of live animals was around 7 times higher than the value of exports (mainly from neighboring countries) Fig 1.4: Primary Species in Kenya 2019 POULTRY 44.6M, 33% PIGS 0.6M, 10% DONKEYS 1.2M, 1% CARMEL 4.7M, 4% PETS UNKNOWN, 0 CATTLE 20M, 16% GOATS 35M, 26% SHEEP 27M, 20% Source: https://www.fao.org/home/en/ Confidential Surgipharm Limited
  • 20. Confidential Surgipharm Limited ► Livestock keeping households per species (2017) o As population and urbanization grows, consumption of milk, beef, chicken, pork and eggs is expected to increase by 175%, 173%,174%,268% and 503%, respectively, between 2010 and 2050. o Value of livestock and livestock products increases from $833M USD in 2012 to $1,395M USD in2019. Cattle and calve production value is the highest. Fig 1.5 Estimated Livestock keeping households per species (2020) ► Total number of households: ► 11.63 million Number of HHs keeping Animal % of total number of households % of livestock keeping households Livestock keeping households 6,985,359 60% cattle 3,610,839 31% 52% Goats 2,766,171 24% 40% Sheep 1,659,964 14% 24% Equine 826,572 7% 12% chicken 5 ,511 ,901 47% 79% Source: https://www.fao.org/home/en/
  • 21. Confidential Surgipharm Limited ► Main Livestock Production Systems o High potential Farming is situated in tropical temperate area, in peri-urban Nairobi and surrounding regions: Most AH service providers, manufacturers and distributors actors are concentrated in these areas o 60-70% of the National Livestock Herds is in the ASALs, they are principally occupied by pastoralists and agro-pastoralists o Marginal mixed farming is situated in Eastern and Western steppe or tropical regions: Less productive due to poor dairy genetic resources and lack of market access
  • 22. ► Most Livestock is owned by Small Scale Producers (SSPs) engaged in mixed farming or pastoralism Access to AH products  Primarily buy pharmaceuticals and vitamins/supplements from agro-dealers but their main AH expense are feeds  Rarely vaccinate their animals Access to AH products  Veterinary drugs are their main expense  CAHWs play an important role in facilitating access to veterinary medicine  Subsidies provided by GoK on major vaccines are rising Access to AH products  Buy AH products directly from manufacturers, imports, or wholesalers feeds are their main expense  For ad-hoc needs, they will purchase products are agro-dealers  Easy access to products and often hires experts The end consumers of AH products and services are mainly divided into subsistence and commercial Farmers. Kenya’s agri-business sector is very active, drawn by an open operating environment and opportunities to inform, equip, and sell to farmers while improving animal health and productivity. Pastoralist and agro- pastoralists  Mainly found in the ASALs (which cover 75% of total surface land)  Pastoralists keep a large number of animals, mainly cattle, indigenous breeds of sheep, goats and camels Mix crop and livestock production systems  Mainly found in urban and peri urban areas and high rainfall areas  Priority is crop, livestock comes second. subsidence activity with a small number of animals (2-10), mainly cattle and small ruminants Commercial or specialized farming  Mainly found near trading points and near urban and peri- urban markets  Mostly focused on dairy, followed by ruminant meat and poultry Confidential Surgipharm Limited
  • 23. ► Focus on Cattle ► The prominence of cattle in Kenya livelihoods  11.8M HHs cattle, of which 76% are beef cattle and 24% are cows  3.6M HHs own at least one cattle, contributing from 40 to 73% to total household income  While beef animals are kept by small, medium and large farmers, 95% of dairy farmers keep an average of just 3 cows.  Trends indicate there is an increased number of peril-urban increase urban farms.  The dairy sector contributes 14% to agricultural GDP and 3.5% of total national GDP Cattle as an illustration of Kenyan farming systems Mixed farming or semi- intensive • average of 3-20 cows that are part of a large, mixed breed of animals, inclusive also small ruminants and chickens. Dairy cows graze during daytime and are provided with food supplements Pastoralists • Keep indigenous breeds, herds vary from 20 to several hundred heads that rely entirely on communal grazing areas and water sources. • Milk and beef are the main products Commercial • More widespread compared to other countries of the region representing 17% of the heads. • Divided in ranching (Average of 1,000 heads, highly commercial large scale), feeding (capital intensive system) intensive diary (average of 15 cows on quality feed) and extensive diary (20-200 heads and pasture-based production) Source: https://www.fao.org/home/en/ Agro- Pastoral, 29% Semi- intensive dairy, 11% Intensive dairy, 10% 4% RanchingE, xtensive dairy, 3% Feedlot, 0% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 18.8 Million Heads Pastoral, 43% Confidential Surgipharm Limited
  • 24. ► Focus on Poultry The prominence of poultry in Kenyan livelihood  43.8m Chicken contributing 15.1% of total livestock value added (2017)  Sector produces more than 35000 tones of meat and (6 BN Eggs (2019)  5.5Million HHS keep poultry and 75% of HHS in rural areas contributing 36-63% of income (depending on production system)  Sources of nourishment meat and eggs and immediate cash (sale of birds) Three major (meat) production system Intensive • Market~ oriented, practiced in urban areas • Exotic chicken (largely exotic hybrids) raised in confined structures, properly fed and vaccinated. Broilers are sold within 5 to 8 weeks Semi~ intensive • Practiced throughout the country, improved chicken kept In confined simple structures: birds scavenge during the day are provided with some feeds supplements. • Common vaccination against major diseases but limited bio-security practices. • Most birds sold after growing them for between 4 and 5 months though some are self-consumed. Extensive (free ranging) • Low input low output system where indigenous birds are left to freely roam for feeds. • Farmers rarely vaccinate the birds or treat them when sick. • Women and children are responsible for the birds. Mainly kept for egg production though also sold opportunistically in informal markets. • Popular throughout the country, more common in western regions, some parts of lower eastern, North rift areas and in coastal areas. Semi- intensive , 32% Intensive , 20% 0% 10% 20% 30% 40% Extensive , 50% 48% 60% Extensive Semi-intensive Intensive Source: https://www.fao.org/home/en/ 39.7 Million raised for meat Confidential Surgipharm Limited
  • 25. Confidential Surgipharm Limited ► Characteristics and Attributes of Animal Health Services It is useful to discuss the economic characteristics and attributes of animal healthcare services to help define the distribution of responsibilities between the public and private sectors, because these services can be delivered both by government veterinary staff (completely or partly free of charge) or by private veterinarians (usually at cost). Broadly speaking, the spectrum of animal healthcare services includes preventive and control and/or inspection programs and the treatment of sick animals. The following are some of the characteristics and attributes of animal health care services 1. Professionalism: Animal health services are provided by trained and licensed professionals, such as veterinarians, veterinary technicians, and animal health care workers. 2. Specialization: Animal health services are often specialized to meet the specific needs of different types of animals, such as small animals, large animals, and exotic animals. 3. Preventive care: Animal health services focus on preventing diseases and illnesses in animals through routine check-ups, vaccinations, and other preventative measures. 4. Diagnosis and treatment: Animal health services include diagnostic testing and treatment for a wide range of animal diseases and illnesses. 5. Emergency care: Animal health services also provide emergency care for animals in critical condition, such as trauma, injuries, and illnesses.
  • 26. Confidential Surgipharm Limited 6. Surgery: Many animal health services offer surgical procedures for animals, including orthopedic and soft tissue surgeries. 7. Rehabilitation: Some animal health services also provide rehabilitation services for animals that have been injured or have chronic health conditions. 8. Supportive care: Services such as pain management, palliative and hospice care for terminally ill animals are also provided by some animal health services. 9. Communication: Good communication and transparency with the owner/caregiver is also an important aspect of animal health services. 10.Continuity of care: Providing continuity of care and keeping records of animal's health history, treatment and progress is also a key attribute of animal health services.
  • 27. 2. MARKET DYNAMICS The Veterinary Pharmaceutical Industry in Kenya is more vibrant in comparison to other East Africa Countries, however, uncoordinated leading to misuse of drugs and increased antimicrobial resistance that pose a threat to human and animal health. Confidential Surgipharm Limited 2.1 Trends Impact Analysis The Evolution of Animal Healthcare in Kenya The colonial era: private veterinary practice  During the colonial and immediately post-independence era most clinical vet services in Kenya were provided by private practitioners and ‘Vet Scouts’.  The private practitioners were confined in high potential areas, mainly in the so- called white settler areas.  Vet Scouts were local livestock keepers who received informal training from local vet staff, were employed by the County Council and seconded to the government, and lived and provided clinical and other services in the villages.  The provision of private animal health services were, and still are, mainly governed by the Veterinary Surgeons Act (Cap 366) and the Pharmacy and Poisons Act (Cap 244).  The Veterinary Surgeons Act was borrowed mostly unchanged from the British Veterinary Surgeons Act.  This Act broadly limits the practice of veterinary medicine and surgery to registered veterinary surgeons, and staff under their direct supervision.
  • 28. Confidential Surgipharm Limited  However, there are two clauses at the end of the Act added in recognition of the fact that many of the larger commercial farmers of the time provided their own veterinary services.  These clauses allow anyone to treat their own animals, or those belonging to a neighbor, provided it is not done for profit. The 1970s and 1970s: free services for all  Sessional Paper No 1 (1965) ‘African Socialism’ set the scene for a massive increase in government livestock services, to be provided for free throughout the country, and massive investment in the professionalization of the veterinary service.  Vet Scouts at village level were gradually phased out and replaced by Vets and Animal Health Technicians (AHTs), based at Divisional and Locational level respectively.  The Private Practitioners went out of business. Many were expatriates and left the country.  Although clinical services became more accessible in the high potential areas, they did not improve much in the arid and semi-arid areas (ASAL) because relatively fewer Vets and AHTs were posted there and, without enough Vet Scouts or any other intermediaries, they could hardly reach the ASAL nomadic herds because of the vast distances, poor terrain and poor road network.
  • 29. Confidential Surgipharm Limited The 1980 to 1992: structural adjustment and covert operations  The first decentralized animal health (DAH) scheme was quietly established in 1980 by an NGO in Turkana District, an ASAL area in Northern Kenya.  Some of the Catechists of the Catholic Diocese of Lodwar, were trained by a vet from Uganda to treat common livestock diseases as they travel around doing their other duties.  This model of animal health care delivery gradually evolved into the Adakari Vet Scout program promoted by the EEC-funded Turkana Rehabilitation Program in the late 1980s and the Norwegian Overseas Aid (NORAD) program in Turkana in the early 1990s.  The first inklings of change in the livestock sub-sector emerged through a series of research papers in the Ministry of Livestock Development in 1982 and 1983, leading to a policy paper on the privatization of veterinary services.  This was warmly received by the Minister for Livestock Development, and he was perceived to be ahead of the game within government. But these plans were never implemented  The second DAH scheme got underway in 1984, again under the Catholic Church, this time in Narok District, another ASAL area in South-Western Kenya, but collapsed when Kit Flowers, the expatriate vet who set it up, left the country.  Structural adjustment within government and the gradual privatization of public services took centerstage in 1986.  Serious planning for reform in the Ministry of Agriculture (which had by that time subsumed the Ministry of Livestock Development) began with the donor-funded Agriculture Sector Investment Project in the mid-1990s.
  • 30. Confidential Surgipharm Limited  However, an interdepartmental committee set up to look at the implications for the Department of Veterinary Services failed to reach any concrete conclusions before quietly collapsing following the transfer of the committee chairman.  The Intermediate Technology Development Group (ITDG), a UK based NGO, arrived in Kenya in1986 to work with the Catholic Diocese of Meru at Kamujini Farmers Centre (KFC) in the lower potential areas of Meru District.  ITDG had become interested in the dramatic improvements in rural health care provision in China during the 1970s and whether the ‘barefoot doctor’ approach could be applied in the livestock sector.  They were also influenced by World Bank proposals for new privatized livestock services in Sub-Saharan Africa.  Based on the results of some preliminary studies ITDG trained 17 Community Animal Health Workers (CAHWs) at Kamujini in early 1987.  From the outset ITDG intended to test the approach, and if successful, to seek to influence the policy environment so that the approach could be replicated more widely.  ITDG established several other CAHW schemes over the next few years with different partners in many different parts of the country including East Pokot (also in1987) Machakos (1988), Makueni, Samburu (1989), and Turkana (1990).  Budget restrictions began to bite in the late 1980s and the government stopped automatically employing all vets and AHTs on graduation in 1988, and froze recruitment into vacant posts.  This had a disproportionate impact in the ASAL areas (commonly referred to as hardship areas) as vets and AHTs in those areas frequently requested transfers to less remote areas.
  • 31. Confidential Surgipharm Limited  The University and Technical Training Institutes carried on training veterinary staff, turning out about 50 veterinary graduates and approximately 300 AHTs each year.  Although some of the vets and AHTs started working privately, and others were employed by private sector companies, NGOs and cooperatives, or moved into different professions, the gradually increasing number of unemployed vets and AHTs became a significant pressure group for change over the next few years.  In 1988 ITDG organized the first of what was to become a series of annual workshops for vets involved in DAH projects (ITDG, 1991; 1993; 1994; 1999; 2000).  The workshop, held at KFC in Meru District, was attended mainly by ITDG and their partners’ staff, and included three government vets who had been involved in setting up the programs.  Gradually over the next few years, the proportion of government veterinary staff among the participants increased to nearly50%, including some Provincial-level Veterinarians and senior researchers.  Towards the end of1999 there were indications that the Director of Veterinary Services was aware of, and interested in the CAHW approach.  More CAHW schemes were quietly established by bilateral and NGOs during the early 1990s, usually working with district veterinary staff, but these schemes were largely invisible to the DVS and to the Kenya Vet Board (KVB) and Kenya Veterinary Association (KVA).  The Thermostable Rinderpest Vaccine Technology Transfer (TRVTT) Project was started with OAU/IBAR in 1990.  The project aimed to transfer the production of a thermostable Rinderpest vaccine, developed in the USA, to laboratories in Africa.
  • 32. Confidential Surgipharm Limited  This vaccine has a long shelf life without refrigeration, and can be distributed and used much more easily than earlier vaccines which required an efficient cold- chain.  The project successfully established vaccine production facilities in Cameroon and Ethiopia (though not in Kenya), but the national veterinary departments supported by OAU/IBAR PARC continued to use the same inefficient cold-chain routes and systems.  Despite the DVS’s opposition, the GTZ-funded Marsabit Integrated Development Program started to train ‘Contact Herders’ with local department of veterinary services staff in1992.  Over the next few years, the approach they developed was gradually taken up by a number of other GTZ-funded projects in other parts of Kenya.  After three national Vets Workshops, ITDG organized an International Workshop in Kenya in 1992, with participants from 18 countries worldwide.  Several Kenyan vets were also invited to the workshop, which included field visits to several decentralized animal health (DAH) projects in various parts of the country.
  • 33. Confidential Surgipharm Limited The 1994 to 1997: the conspiracy of silence  Increase in CAHW schemes over the next two years, and from this time, national animal health policy-makers were fully aware of the gradually expanding number of CAHW projects.  There was a gradually increase in the number of requests for clarification from field-based veterinary officers who were involved in CAHW schemes, however, these requests were never addressed.  The Director of Veterinary Services could not confirm that CAHW schemes were legal, and he knew that seeking to change the prevailing policies and law to make them so would encounter strong opposition from the entire veterinary profession, yet closing them down would dramatically reduce the availability of animal health services in the ASAL areas.  After many years in preparation, the KVA Privatization Scheme was finally launched in 1994.  This EC funded scheme provided soft loans to veterinarians wishing to set up in private practice.  Originally conceived in 1989 it had taken nearly five years to develop because the KVA, dominated at that time by Government vets, could not find an affordable loan package attractive enough to encourage any government vets to leave the security of a government job.  Meanwhile many of the unemployed vets had quietly established private practices without any loan at all.  The unemployed AHTs had a harder time however. Although they are all secondary school leavers with two- or three-years tertiary training in animal health care at technical institutes, the Veterinary Surgeons Act forbids them to
  • 34. Confidential Surgipharm Limited provide veterinary services except ‘under the supervision of a veterinary surgeon’.  Some had been employed by private vets or drug companies, and some had started to practice illegally, but many were still unemployed and increasingly unhappy.  They had decided to establish an Association to represent their interests in the early 1990s, but had encountered strong opposition in the Department of Veterinary Services, and the Kenya Association of Livestock Technicians (KALT) was only finally registered in 1995 after they had threatened to march to State House to express their grievance to the Head of State.  The Minister also promised to change the law to allow them to establish private animal health services in their own right.  The CAHW schemes approach were tested and they were found to be very successful, achieving much higher coverage rates for a fraction of the cost of the other more traditional government vaccination programs, convincing OAU/IBAR to adopt it as the key principle for the PARC-VAC project.  During 1996, in an attempt to convince the Kenyan government to adopt the CAHW approach to Rinderpest vaccination, the TRVTT project organized a visit for Kenyan vets to South Sudan to see the CAHW program for themselves.  The Kenyans were impressed by the results, but were reluctant to accept that an approach which seemed to work in neighboring but war-torn Sudan could be appropriate in Kenya.  So TRVTT then took them to Afar in Ethiopia to see a similar approach, but in a country with an effective veterinary department and indeed they became more interested.
  • 35. Confidential Surgipharm Limited  By this time there were a large number of CAHW schemes throughout the ASAL areas of Kenya, meeting annually at the ITDG Vets Workshops, and some donors were also training CAHWs in medium potential areas.  The FARM Africa Goat Project, a collaborative project, established at the request of the Kenya government, had started to develop a program with the department of veterinary services in Meru District, incorporating both private veterinarians and CAHWs.  The number of CAHW schemes continued to increase during 1997, but the Director of Veterinary Services chose to turn a blind eye. OAU/IBAR started negotiating with the DVS to start vaccination programs using CAHWs in Northern Kenya, meanwhile running training of trainers’ workshops for NGO staff involved in training CAHWs in South Sudan and Northern Kenya.  The NGOs started talking once more about lobbying for policy change and legal reform to promote DAH schemes, and were joined by KALT who were becoming increasingly militant since there was still no sign of the necessary reforms to allow them to practice.  Then, ironically, just when there seemed to be a real opportunity to promote change, ITDG’s animal health program ran out of funds after the 7th Vets Workshop in Marsabit.  The Kenya Vet Board and Kenya Veterinary Association had only gradually become aware of the CAHW movement, but became increasingly alarmed during the year they learned more about them.  They regarded them generally as a threat to veterinary professionalism, but were particularly concerned to discover that some schemes were operating in medium- potential parts of the country, where some private vets were trying to establish
  • 36. Confidential Surgipharm Limited private practices, and that many of the schemes had been established by expatriate vets working in Kenya without registering with the Board.  Their concern finally boiled over at a FARM Africa workshop in Embu in December 1997 The 1998 to 2000: the tipping point  After more than a year’s work with local veterinary staff, FARM Africa had finally found a workable model for the animal health component of their goat project.  Their plan involved establishing private vets with loans from the Kenya Veterinary Association Privatization Scheme (KVAPS), working with Animal Health Assistants (AHAs), who would support self-employed CAHWs at village level, to provide the necessary service to farmers.  This proved too much for a representative of the KVB who had been invited to the inaugural workshop in Embu, who angrily warned the Kenyan project vet that what he was proposing was illegal and that he would be struck off the veterinary register if he proceeded.  Shortly afterwards, in January 1998, the KVB put a full-page advertisement in the national newspapers pointing out that it was illegal to train community animal health workers and that any Vets doing so risked being struck off the veterinary register.  This alarmed everyone working on DAH schemes. ITDG and others decided that the best defense would be to try to get all parties together to discuss the issues and find a solution.  But ITDG had no money and had to look for resources from other organizations.
  • 37. Confidential Surgipharm Limited  OAU/IBAR, still waiting for approval for their proposed CAHW program in Northern Kenya, was also keen to find a solution. They and The Netherlands Development Agency (SNV) offered to fund the workshop, provided it was supported by all stakeholders.  ITDG then formed a committee of a few individuals, to develop the workshop.  In view of the sensitivity of the workshop theme, (‘Practice, Policy and the Law in the Delivery of Animal Health Services particularly in Arid and Semi-Arid Lands (ASALs)’), ITDG was advised to include representatives of all key parties in the planning committee.  The Vet Board letter also unblocked a study of livestock services in ASAL areas that had been proposed some months earlier by the European Union Rural Development Adviser.  The study included stakeholder workshops in each region, and culminated in a major workshop to discuss the findings in Nairobi in May 1998.  At around the same time, the DVS finally signed a Memorandum of Understanding (MoU) allowing PARC-VAC to establish a pilot scheme using CAHWs in Turkana and West Pokot.  An international workshop on DAH, focusing on delivery of animal health services in Eastern Africa, held in Arusha in December added further impetus. In planning for this workshop, each of the three East African countries (Uganda, Tanzania and Kenya) had a coordinator  It was well attended by participants from Kenya, who were impressed by the degree of interest being shown by other countries, by the evidence of the effectiveness of CAHW schemes presented by delegates, and the endorsement of the approach by OAU/IBAR – an increasingly important donor for livestock services in Kenya.
  • 38. Confidential Surgipharm Limited  The 8th ITDG Vets Workshop, renamed a DAH Workshop, was held in Meru in May 1999, following several months planning by a committee including representatives of all the main stakeholders (ITDG, 1999).  The program included key presentations from all of the stakeholders, and covered the right spectrum of participants. The workshop endorsed the CAHW approach and established multi-stakeholder working groups to develop guidelines and standards for CAHWs in Kenya, and recommended a review of the legislation and policy.  After much negotiation, ITDG obtained funding for a further three-years’ work, with explicit outputs relating to policy reform.  The MoU between DVS and PARC-VAC was expanded to include SNV and VSF (Belgium) as implementing agencies and to cover more divisions in Turkana and West Pokot. The 2000 to 2002: rocks ahead  Between September and November 1999, many new NGOs became involved in training CAHWs as part of short-term relief programs in ASAL areas following the 1999–2000 drought.  With only short-term funding, some of these programs were implemented too quickly, neglecting the essential and time-consuming, community-awareness and education elements of successful programs.  Many collapsed as soon as the agency withdrew, attracting criticism from veterinary professionals and providing evidence of the dangers of the approach for its opponents.
  • 39. Confidential Surgipharm Limited  Changes in the executive committee further undermined support in the KVA and the Annual KVA Conference in April 2000 in Mombasa, narrowly sidestepped a motion proposing to lobby to ban CAHWs.  The motion did not go through but gave a clear signal that there was significant resistance to DAH approach within KVA.  Surprisingly, there was no discussion at all about CAHWs at the following KVA Annual General Meeting in April 2001.  The KVB and DVS finally approved the minimum standards and guidelines for CAHWs in early 2001, and since then these guidelines have been tested in the field.  In the meantime, the animal health policy review process was being carried out, and at the OAU/IBAR 50th Anniversary Party in November 2001, the Minister of Agriculture promised to push the new policy through Cabinet if it could be completed by February 2002.  The new animal health policy document was duly completed in early 2002 and a draft submitted to the Permanent Secretary, Ministry of Agriculture and Rural Development for further scrutiny.  Some unfortunate drafting in the new Veterinary Practitioners Bill which defined CAHWs as ‘Veterinary Surgeons’ provoked a very strong reaction at the Annual KVA Meeting in Kakamega, where delegates strongly opposed any further moves to legalize CAHWs and proposed to petition for an injunction.  Recent information indicates that KVA has already petitioned DVS to withdraw the document to allow inclusion of their input. It seems that it may be a while yet before CAHWs are finally legalized in Kenya.
  • 40. Confidential Surgipharm Limited 2.2 Market Drivers Overview i. Improved focus by the Government on Livestock production hence Animal Healthcare ii. Rapid growth of companion animal segment (pet) iii. Increased participation of Veterinary Practitioners in the private sector focusing on diagnosis and treatment Main focus of the Government is on preventive measures iv. Farmer Education on Animal HealthCare creating awareness on need to take good care of animals v. Entrance of multinationals in the market leading to increased Research and new treatment of diseases
  • 41. Regulatory Environment in Kenya a. Overview Fig 2.1: Map of Regulatory Actors Since lauching of the strategy for revitalizing Agriculture(SRA) in 2004,the government of Kenya has been undertaking legal and regulatory reforms in the agriculture sector as one of its priority programs to revitalize,develop and modernize the sector. Semi-autonomous institutions Veterinary Medicine Directorate (VMD) Kenya Veterinary Board (KVB) Kenya Veterinary Vaccines Production Institute (KEVEVAPI) Kenya Dairy Board Kenya Agriculture and Livestock Research organisation Kenya Tsetse and Trypanosomiasis Eradication Council Kenya Animal Genetics Resource Centre STATE DEPARTMENT FOR LIVESTOCK BUREAUS OF AGRICULTURE AND LIVESTOCK COUNTY GOVERNMENT DIRECTOR OF VETERINARY SERVICES Directorate of Veterinary Services Directorate of Livestock services The county government implement the national government policies to the extent that the policies relate to the county and in particular shall be Responsible for: i) Crop and animal husbandry ii) Livestock Sale Yards (Markets) iii) Abattoirs iv) Plant and Animal Diseases v) Fisheries vi) Veterinary services excluding regulation of the profession) Four division i) Disease surveillance, vector regulatory& Zoological services. ii) Diagnostics and efficacy trial venters/vet farms iii)Veterinary public governance & management Support services MINISTRY OF AGRICULTURE LIVESTOCK AND FISHERIES MAP OF REGULATORY FACTORS National County Level Confidential Surgipharm Limited
  • 42. Structure, functions and institutions of the ministry of agriculture and livestock development. Fig 2.2: Structure, functions and institutions of the Ministry of Agriculture and Livestock Development Ministry of agriculture and livestock development (cabinet secretary) State for department for livestock development (principal secretary) State department for crop development (principal secretary) FUNCTIONS ► Livestock policy management ► Development of livestock industry ► veterinary services and disease control policy ► Range development and management ► Livestock marketing ► Promotion of dairy industry ► Livestock insurance policy ► Livestock branding ► Promotion of bee keeping and apiculture ► Promotion of quality of hides and skins ► Leather sector development and promotion of value chain ► Livestock research and development ► Animal genetic research ► Tsetse fly and trypanosomiasis research and control INSTITUTIONS ► Kenya veterinary vaccine production institute (state corporations Act Cap.446 through Gazette Notice No 223 of the 4th June,1990.) ► Kenya veterinary board (veterinary surgeons and veterinary para professionals Act No 29 of 2011) ► Veterinary medicines directorate. ► Animals technicians’ council animal technicians Act No 11, 2010) ► Kenya meat commission (Kenya meat commission act, Cap 363) ► Kenya leather development council (Kenya leather development council Order, No 114 of 2011) ► Kenya Dairy Board (Dairy Industry Act Cap 336) ► Kenya animals genetic resource center, Kenya animals genetic resource center ► Order,2011 (legal notice no 110 of 2011) Confidential Surgipharm Limited
  • 43. Confidential Surgipharm Limited b. Veterinary Medicines Directorate Veterinary Medicinal products are regulated in Kenya by Veterinary Medicines Directorate (VMD). Before the commencement of VMD in 2017, Veterinary medicinal products were being regulated together with human medicines by Pharmacy and Poisons Board under CAP 244 of the laws of Kenya. Establishment of VMD Veterinary Medicines Directorate (VMD) was established pursuant to CAP 366 (article 39) of the laws of Kenya which resulted in the formation of Veterinary Medicines Directorate Regulations 2015. VMD regulations were operationalized in November 2017. Role of VMD The Veterinary Medicines Directorate (VMD) is responsible for regulating the manufacture, importation, exportation, registration, distribution, prescription and dispensing of veterinary medicines and other animal health products in Kenya. VMD roles involve undertaking appropriate regulatory measures to achieve the highest standards of safety, efficacy and quality for veterinary pharmaceuticals, immunological, animal pesticides and feed ingredients as well as other animal health products, manufactured locally, imported, exported, distributed, sold, or used, to ensure the protection of animal health and welfare, food safety and security as well as public health and the environment as envisaged by all laws in force in Kenya.
  • 44. Confidential Surgipharm Limited VMD undertakes their regulatory functions by performing the following activities; i. Drugs Registration ii. GMP Inspections (Good manufacturing practices) iii. Good Distribution Practices (GDP) Inspections – Agrovets, wholesale outlets inspections iv. Licensing of Veterinary manufacturing plants and distribution outlets such as agrovets and wholesalers. v. Issuing of import and export permits for trade in Veterinary medicines.
  • 45. Confidential Surgipharm Limited c. The Kenya Veterinary Board (KVB)  The Kenya Veterinary Board (KVB) was established in 2010 under the Veterinary Surgeons Act with the purpose of regulating the veterinary profession as well as facilitating vertical/horizontal public/private partnerships covering veterinary and livestock related issues.  As a regulatory body for the veterinary profession the eight-member board is constituted in the following manner: I. Four members elected by registered veterinary surgeons and appointed by the minister II. Minister nominates two members and two additional members are ex-officio members i.e., Director of Veterinary Services and the Dean of the Faculty of Veterinary Medicine, University of Nairobi III. Minister also nominates the board chairman
  • 46. KVB Organization Chart Fig 2.2: The Kenya Veterinary Board Kenya Veterinary Board (KVB) Secretary/CEO Inspection and Compliance Department Finance, HR and Admin Department, services Department Quality Assurance Policy Research and strategy Corporation secretary and legal services Department Regional offices Inspection Compliance Education Registration Licensing Finance and accounts Hr and Public communication Ict Research and strategy Quality assurance and performance management Internal audit Supply chain management Legal services Confidential Surgipharm Limited
  • 47. Confidential Surgipharm Limited Functions of the Kenya Veterinary Board Core Functions: i. Register all veterinary surgeons and for maintaining a registry of retained veterinary surgeons ii. License and regulate private veterinary practice iii. Establish and strengthen veterinary specialist colleges iv. Formulation and enforcement of a code of ethics across the veterinary profession v. Regulate veterinary education while promoting continuous professional development vi. Inspect and accredit laboratories and clinics animal health training institutions, veterinary vii. Maintain registry of animal health institutions and animal health service providers viii. Monitor animal research and ensure maintenance of minimum animal welfare standards ix. Provide technical advice to the ministry of livestock on prevailing and pertinent issues x. Promote national, regional and international cooperation on veterinary and livestock matters
  • 48. Confidential Surgipharm Limited Other functions The board also regulates the University of Nairobi and provides supervisory services over other academic institutions listed below: ► Animal Health and Industry Training Institute (AHITI) ► Meat Training institute ► Kenya Wildlife Service Training Institute ► Dairy Training Institute – Naivasha
  • 49. Confidential Surgipharm Limited d. Kenya Dairy Board The Kenya Dairy Board (KDB): Established to facilitate development of a sustainable and competitive dairy industry that produces safe, quality products and for contributing to national economic development. Functions of the KDB: i. Organize, regulate and develop the efficient production, marketing, distribution and supply of dairy produce ii. Improve dairy produce quality iii. Secure reasonable and stable prices to producers of dairy products iv. Promote market research in relation to dairy products v. Permit the highest degree of private enterprise involvement within the production, processing and sale of dairy produce vi. Adopt measures and practices that promote efficiencies within the dairy industry Additional Responsibilities: ► Promoting quality assurance for attaining high quality products with an emphasis on milk production hygiene ► Encouraging proper use of milk containers during milk transportation and storage ► Regulating the sales of raw milk and importation of dairy produce ► Promoting the consumption of quality milk and milk products ► Developing, promoting and providing advice on proper packaging equipment and materials ► Licensing milk producers and processors
  • 50. Confidential Surgipharm Limited ► Enforcement of the Dairy Industry Act through anti-hawking operations and prosecutions. This also includes short courses and seminar training for farmers to produce milk within sanitary conditions and using modern techniques.
  • 51. Confidential Surgipharm Limited e. The Kenya Veterinary Association ► The Kenya Veterinary Association (KVA) is the legally chartered and registered professional association for all veterinary and para-veterinary workers in Kenya. ► The mandate of the KVA is to act as custodian of the profession, ensuring proper management of veterinary issues affecting the welfare of veterinarians with a view toward improving animal welfare. ► Supporting these measures, KVA maintains in-depth checks and balances structure across the country for sponsoring publications, events and continuing education programs. They also provide member benefits and coordination for the government enacted Strategic Plan.
  • 52. Confidential Surgipharm Limited f. Research Institutes The Kenya Agricultural and Livestock Research Organization The Kenya Agricultural and Livestock Research Organization is composed of semi- autonomous institutes established under the Kenya Agricultural and Livestock Research Act of 2013. This Act empowers the Cabinet secretary, in consultation with the KALRO Board to establish research institutes that may be necessary for the performance of KALRO’s functions under the Act. The Act also recognizes the role of public universities in agricultural research and provides for partnerships with them as associate research institutes. Currently, sixteen research institutes have been established. Under the Act, the functions of the research institutes under KALRO shall be to: i. Advise on, and develop appropriate systems to promote balanced, diversified, and sustained agricultural development and to optimize agricultural production through adaptive and investigative research ii. Facilitate the use of improved production technology, and establish adequate feedback systems from agricultural producers in order to achieve and maintain national self-sufficiency and export capacities in agricultural products. It is expected that the Institutes shall conduct research in their respective value chains and disseminate appropriate information and technologies to intended users. Although the key mandate of each institute will be restricted, the various research centers under the administration of each Institute may manage research projects covering multiple value chains and commodities. The following are the sixteen research institutes:
  • 53. Confidential Surgipharm Limited KALRO’s RESEARCH INSTITUTES Name Location Centers 1. Industrial Crops Research Institute Mtwapa: Kilifi County Kikoneni: Lamu County, ICRC, Mwea: Kirinyaga County, ICRC Molo: Nakuru County, ICRC Kandara: Murang’a County 2. Sugar research Institute: Kibos: Kisumu County Kibos, Opapo, Nyando Mumias, Mtwapa, Kikoneni 3. Tea Research Institute: Kericho County Kericho, Kangaita. 4. Veterinary Research Institute Muguga: Kiambu County Alupe, Muguga North 5. Sheep Institute and Goat Research Marsabit County Marsabit, Marimanti, Bachuma, Macalder 6. Non-Ruminant Research Institute Kakamega town: Kakamega County Kakamega, Naivasha 7. Genetic Institute Resources Research Muguga South: Kiambu County Muguga 8. Biotechnology Research Institute Muguga: Kiambu County Biotech and NARL Kabete 9. Beef Research Institute Lanet: Nakuru County Garissa, Lanet, Mariakani, Trans Mara 10. Apiculture Research Institute Marigat: Baringo County Perkera, Lenana Training Centre, Nairobi 11. Dairy Research Institute Naivasha: Nakuru County Naivasha, Ol Joro Orok, Msabaha 12. Horticulture Research Institute Thika: Kiambu County 13. Food Crops Research Institute Trans-Nzoia County 14. Coffee Research Institute Ruiru: Kiambu County 15. Arid and Range Lands Research Institute Katumani: Machakos County 16. Agricultural Mechanization Research Institute Nairobi County
  • 54. Confidential Surgipharm Limited Additional Institutions and Laboratories  The International Livestock Research Institute (ILRI) - Kenya Headquarters-The Hub for Biosciences eastern and central Africa (BecA)  Kenya National Veterinary Laboratory Network: Regional reference laboratories under the Kenya National Veterinary Laboratory Network are listed below: i. Mariakani: Serves Coast Counties (Two satellite laboratories at Ukunda and Witu) ii. Eldoret: Serves Northern Rift Valley Counties (Satellite laboratory at Lodwar) iii. Karatina: Serves Central and Eastern Counties (Satellite also in Isiolo) iv. Nakuru: Serves Southern Rift Valley Counties v. Kericho: Serves Nyanza and the Western Rift Valley Counties vi. Garissa: Serves North Eastern County
  • 55. Fig 2.3: National Veterinary Laboratory Network (KNVLN) Org chart Ministry of Agriculture and livestock Development Directorate of Veterinary Services Diagnostic Services, Quality Assurance & Biosafety Regional veterinary investigation services National investigation services Mariakani Laboratory Eldoret Laboratory Karatina Laboratory Nakuru Laboratory Kericho Laboratory Garissa Laboratory Lodwar Laboratory Isiolo Laboratory Witu Laboratory Ukunda Laboratory Central Veterinary Laboratories Kabete FMD/Vesicular Diseases Laboratory (NVQCL) Pathology Helminthology Chemistry Virology Bacteriology Acarology Laboratory Laboratory Laboratory Laboratory Laboratory Laboratory Laboratory Animal Sciences Confidential Surgipharm Limited
  • 56. Confidential Surgipharm Limited  The Central Veterinary Laboratories, Kabete: It contains the: o Foot-and-Mouth Disease/Vesicular Diseases Laboratory o Kenya Veterinary Vaccines Production Institute
  • 57. Non-Governmental Actors Role of NGOs and Development Agencies in the AH sector  Provisions of extension services and education to SSPs pastoralist on ah disease and medicines  Building trust on the ground of outside agencies  Grassroots level data gathering from livestock keepers  Support national and state government in policy and strategy development and implementation  Financial support and philanthropy  Important research, publication and data collection on livestock sector  Acts as interface between local communities and government Role of NGOS and Development agencies in the AH sector Confidential Surgipharm Limited  Partnership building between NGOs and international development agencies powerful to resolve market failures and policy gaps  NGOs have an important role of trust building and education especially in the ASALS with pastoralists  Improvement in health and outcomes, productivity and reproduction of animals due to improved access to services.  program: more milk – making the most of milk  funder: BMGF  Grantee: ILRI  Objective: Aim to generate research evidence on how informal milk markets can be leverage to improve nutrition and health, especially in pre urban settings.  LD4D site records 40livestock projects in Kenya by 36 grantees  Main funders BMGF, DFID USAID.  Grantees include academic /research organization (e.g., ILRI), NGOs (e.g. Save the children UK) private organization (e.g. land O’lakes) or un agencies (e.g. UNICEF)  Program index-based livestock insurance  Funder: DFID  Grantee: crown agent bank  Objective: uses satellite technology to protect pastoralists in remote arid and drought prone range lands of Kenya from the impacts of extreme weather.  Program: Kenya diary sector competitiveness program  Funder: USAID  Grantee: Land O’lakes international  Objective: strengthen the competitiveness of Kenya’s dairy industry through increasing economic revenues in the entries daily value chain, particularly for the small holder farmers Objectives of there work in Kenya Examples of livestock related programs in Kenya
  • 58. Confidential Surgipharm Limited Acts and Laws Regarding Food Safety and Livestock The Acts of Parliament directly or indirectly associated with the governing of veterinary matters include: i. Veterinary Surgeons and Veterinary Para-Professionals Act - ACT NO. 29 of 2011 ii. Animal Technicians Act - ACT NO. 11 of 2010 iii. Agricultural Development Corporation Act - Chapter 444 iv. Meat Control Act - Chapter 356 v. Dairy Industry Act - Chapter 336 vi. The Agriculture Act - Chapter 318 vii. Animal Diseases Act - Chapter 364 viii. Biosafety Act - ACT NO. 2 of 2009 ix. Cattle Cleansing Act - Chapter 358 x. Public Health Act - Chapter 242 xi. Radiation Protection Act - Chapter 243 (In the case of irradiated Foods) xii. Food, Drugs and Chemical Substances Act - Chapter 254 xiii. Customs & Excise Act - Chapter 472 xiv. The Standards Act - Chapter 496 xv. Pest Control and Products Act - Chapter 346
  • 59. Confidential Surgipharm Limited 2.3 Market Restraints Overview i. Challenging Regulatory Environment across the Value Chain ii. Limited access to Veterinary services due to low numbers of practitioners and long distance covered to reach farmers iii. Lack of knowledge to Veterinary Practitioners on new treatment methods and Business acumen. iv. High costs across value chain making it difficult for farmers to access services. Practitioners have to visit the patients on the farms unlike in small animal clinics v. Government Budgetary constraints in this sector vi. Lack of official Market data making it difficult for stakeholders to make informed decisions. vii. Lack of linkages between Pharmaceutical Industry and academicians for market Research on Animal HealthCare. viii. Unethical market practice ix. Unclear value of treatment of animals by Veterinary practitioners to farmers. Farmers not valuing work of the clinicians due to competence issues. (Attitudinal factors) x. Use of traditional methods to treat animals xi. Lack of drug inspectors / Pharmacovigilance leading to malpractices and antimicrobial resistance.
  • 60. Confidential Surgipharm Limited xii. Social Cultural factors and Historical factors e.g. Maasai’s and ASAL See themselves as practitioners Animal health service delivery in Arid and Semi-Arid Lands (ASALS)  Animal health service delivery in Arid and Semi-Arid Lands (ASALS) can be a major challenge due to the harsh and inhospitable climatic conditions in these regions.  The scarcity of water and vegetation, along with the dispersed nature of the livestock populations, can make it difficult to deliver veterinary services to these areas.  However, despite these challenges, there are a number of approaches that can be taken to improve animal health service delivery in ASALS. o One approach is to make use of mobile veterinary clinics, which can travel to remote areas to provide veterinary care. These clinics can be equipped with basic diagnostic equipment, medicines, and supplies, and can be staffed by trained veterinarians and animal health workers. o Another approach is to train local animal health workers to provide basic veterinary services in their communities. This can help to increase access to veterinary care in remote areas, and can also help to build local capacity to respond to animal health emergencies. o Another important aspect of animal health service delivery in ASALS is disease control. Many diseases, such as tick-borne diseases and outbreaks of infectious diseases like Rift Valley fever, can have a
  • 61. Confidential Surgipharm Limited significant impact on livestock populations in these areas. A coordinated approach to disease control, involving the use of vaccines and other measures to prevent the spread of disease, can help to reduce the impact of these diseases on livestock and the communities that rely on them.  In addition to these interventions, it is also important to address underlying factors that can impact animal health, such as malnutrition and poor herd management practices.  This can be achieved through the provision of animal health extension services, which can help farmers to improve their herds' nutrition and management practices, thereby improving animal health and productivity.
  • 62. Confidential Surgipharm Limited Constraints to animal health service delivery in Arid and Semi-Arid Lands (ASALS) a. Effects of the structural adjustment policies The provision of Animal Health Care (AHC) in sub-Saharan Africa has been the responsibility of the state veterinary services for many years. Private veterinary services were non-existent or, if present, located in more lucrative urban areas. Livestock services were among the first rural services targeted for privatization under the structural adjustment programs, particularly in sub-Saharan Africa. Budgetary allocations for veterinary departments decreased gradually until state veterinary services became almost dysfunctional. International experts made bold efforts to retain veterinary regulation and management of epizootic diseases within the public domain but pushed curative animal health care into a private market. This restructuring was, however, implemented hurriedly before the establishment of alternative suppliers within the private sector and the enactment of policies and legal frameworks that could assure quality of animal health services. To compound the situation the veterinary profession and authorities were very slow to respond, and the increasing financial constraints effectively paralyzed government services by the late 1980s and early 1990s. The combination of poor financial resources and an inadequately organized Veterinary Services has often led to deterioration in animal health services, with endemic diseases frequently spreading unchecked. The resurgence and unchecked spread of diseases such as Peste des petits ruminants (PPR) and Contagious bovine pleuropneumonia (CBPP) in many parts of Africa can be related to the breakdown of national veterinary services. Control of ticks and tick-borne diseases such as East Coast Fever (ECF) has
  • 63. Confidential Surgipharm Limited deteriorated, in many cases along with provision of healthcare to pastoral communities. As a result, Structural adjustment policies (SAPs) for sector reforms did not result in adequate provision by the private sector and civil society of essential services and markets as was intended. The result is that the great majority of the rural poor do not enjoy access to the range and quality of services and markets that they need to support a robust livestock related livelihood. b. Constraints related to infrastructure Pastoral areas in the horn of Africa are characterized by their large size, limited development, poor infrastructure and insecurity. Human populations tend to be small, highly mobile and difficult to reach unless on foot or in a four-wheel drive vehicle. Besides, given that markets in Kenya are thinly spread, institutions for contract enforcement are weak, and infrastructure is underdeveloped, the veterinary service privatization program has had varied impact in different regions, with these marginal areas receiving minimal attention. c. Financial constraints and changing government policies Financial constraints and the changing government policy on provision of services in many developing countries have severely curtailed the quality and the effectiveness of veterinary services being provided. The current trend is for the government veterinary services to be decentralized and for clinical and preventive animal care to be handed over to the private sector. Whilst this has had some success in areas of high agricultural potential, professional success rates in rural areas have been low. The impact of this is being felt more in the ASALs, which are already disadvantaged by having inadequate
  • 64. Confidential Surgipharm Limited numbers of veterinary personnel, poor infrastructure, high degree of insecurity and recurrent drought. Other common diseases in pastoral areas that are a major constraint to livestock production and which also need to be targeted include Rift Valley Fever (RVF), contagious caprine pleural pneumonia (CCPP), Foot and Mouth Disease (FMD), mange, non-specific diarrhea, orf/pox, enterotoxaemia, mastitis, anthrax, black quarter, ringworm, Peste petits des ruminants and endo and ectoparasites. Development partner investments involves deregulation and the deployment of privately operating paraprofessionals commonly referred to as community animal health workers, is often perceived as a threat to the veterinary profession and may result in limiting access to international markets for the trade of livestock and livestock products. Moreover, although livestock owners in ASALs are willing to pay for drugs and services, the demand for quality products is not satisfied by the existing illegal and “black market centered” drug supply system. Most of these ASAL livestock owners use commercial veterinary drugs and, to a lower extent, vaccines from “hawkers”, who sometimes barter them against goats. While vaccines are not used in most cases because of poor availability, poor handling and quality reduces the efficacy of those available. The researchers also noted that the pastoral livestock producers had to walk long distances to access services and buy these inputs of suspect quality and efficacy.
  • 65. Confidential Surgipharm Limited d. Weak Legal frame-work and Institutions The key weaknesses of legal and institutional frameworks that support the livestock industry include: regulation and facilitation of services such as animal breeding services, feed production, privatization of veterinary services, regulation of veterinary drugs, resolution of livestock/wildlife conflicts, quality assurance of livestock inputs and products, coordination of research and extension, information as well as monitoring and evaluation of projects and programs. In addition, there are no mechanisms in place to identify the constraints to livestock production, the service needs of poor livestock keepers and the ways and means to deliver them at affordable costs. The policy priorities and directions for service delivery often get determined by the biases and beliefs of the decision and policy makers. Moreover, lack of strong institutional support such as provision of credit facilities, research and policy, legal and regulatory frameworks has exacerbated agricultural woes. Unfortunately, there is no consensus among the livestock sector professional as while veterinary scientists argue that it is the poor animal health which is the main constraint to livestock
  • 66. Confidential Surgipharm Limited e. Research and extension Institutions of higher education, research and extension are, in general, poorly staffed, ill equipped and under-funded to provide the scientific and technological foundations of a structural and sustainable transformation of the national food and agricultural system. As a result, these systems remain largely ineffective for developing and extending technologies that respond to farmer’s needs. Kenya is trying to revitalize its extension services. a) Low-input low-output subsistence production system dominates the ASALs b) Pastoralists, primarily low-income earners, predominantly see livestock as assets to be maintained and expanded, only selling, when necessary, rather than when they could get the best price c) Pastoralism accounts for 60-65% of Kenya’s meat supply and 80-90% of the red meat consumed in Kenya d) Lack of information across the supply chain undermines pastoralists access to and benefit from formal markets e) Highly vulnerable climate change, Kenya’s pastoralists have been affected by consecutive droughts in recent years
  • 67. f. Access to Financial Services  Limited uptake by Small Scale Producers (SSPs) and pastoralists, hindering their ability to buy quality inputs Access to financial services for actors in the livestock value chain remains a challenge, especially for SSPs and pastoralists. Private financial institutions mainly serve large dairy operations but coverage of smaller and remote actors is currently left to public institutions and government-led programmes. Confidential Surgipharm Limited ACCESS TO FINANCE  Low access to agricultural finance; 15% coverage (formal and informal), despite high ranking in Doing Business index regarding access to credit regulations.  High cost of credit for players along the livestock value chain.  Most affected groups: SSPs, pastoralists, women and youth, who lack collateral required by conventional financial institutions.  Majority from this group access credit through CBOs, which is expensive and insufficient.  The Agricultural Finance Cooperation (AFC) established by the GOK in 1963 to provide affordable credit to farmers, struggles to meet demand and has limited coverage in the ASALs.  Examples of financial institution providing credit to livestock farmers: the Kenya livestock finance trust (K- lift) equity bank, Kenya Woman Finance Trust, Family bank  Current depreciation trend of the Kenyan shillings pauses a challenge for actors relying on imports LIVESTOCK INSUARANCE  uptake of insurance< 1% across agricultural population  only a few insurance companies offer livestock insurance on commercial bases and mostly cover high value daily animals  Kenya Livestock Insurance Programme (KLIP) launched by the GOK in 2015 to protect pastoralists against climate shocks through subsidized satellite- based index insurance for livestock. As of July 2018, programme had paid cash 400MN in premium and over Kshs 700mn in payouts 32k beneficiaries.  Causes of limited uptake of livestock insurance common across markets: ► Risk associated with livestock farming such as drought and diseases ► Limited awareness of insurance products ► Inadequate date for designing insurance products ► Inadequate capacity of SSPs to pay premiums ► High cost of delivery of insurance services, especially in the ASALS Source 1.: National Livestock Policy 2019 2: AFC Baseline Survey Report 3: livestockkenya.com 4: GoK
  • 68. g. Access to market data and extension  Suboptimal management and dissemination of market data and extension services The lack of credible market information is especially significant in remote livestock markets. Advancements in technology and infrastructure are key to improve the access of livestock producers to market data and extension services. Confidential Surgipharm Limited ACCESS TO LIVESTOCK MARKET DATA  An ILRI study from 2017 found that the collection and dissemination of livestock market data, while widespread, is currently suboptimal.  Lack of coordination and high costs of data collection efforts due to technical and infrastructural challenges, leading to an unnecessary information asymmetry along the value chain, uniformed HH decision-making, and poor service delivery.  Advances in ICT have created new opportunities for Innovative ways to improve access to market data and services.  The Kenya Livestock Marketing Council (KLMC) aims to provide reliable market information to livestock producers and traders across the country. The organization supports 42 markets being monitored under the National Livestock Market Information system (NLMIS)S, a unified system of information on prices of different livestock species. TRAINING & EXTENSION SERVICES  Livestock extension is the mandate of the county governments while the national government formulates policy, standards and builds capacities of service providers.  Other extension service providers: agro- veterinary pharmaceutical companies, animal feed manufacturers, milk processors, NGOs and CBOs e.g. World Bank Kenya Agriculture Productivity and Agribusiness Project (2009-2015)  Limited collaboration among extension service providers leading to duplication and conflict of interests.  Inadequate collaboration between research, training and extension, results in limited access and poor quality of services.  Inadequate staffing and funding for delivery of services at county level, while FAO recommends a 1:400 extension worker farmer ratio, Kenya’s ratio is 1:700 for intensive mixed farming system 1:640 for agro-pastoral system and 1:1000 for pastoral systems. Source 1: National Livestock Policy 2019 2: ILRI study 3: Kansas City State University Study 4: World Bank Project
  • 69. Confidential Surgipharm Limited h. Market Imperfections and Asymmetric Information in the Animal Healthcare Market The framework of incomplete market information can be applied to the animal healthcare sector to analyze the service-seeking behavior of livestock farmers. In a full- information market, livestock farmers seeking healthcare services of a given quality should obtain them at the lowest cost possible. Likewise, income-maximizing animal healthcare service providers should be able to assess the farmers’ willingness to pay and charge the maximum fees possible. However, in a market with information imperfections, livestock farmers may have a general knowledge of the price spread but not of the actual fees charged by each service provider. Consequently, they choose an optimal amount of search, balancing the cost of search with the amount of savings from finding a lower price. This strategy is especially common when there is a wide spectrum of service providers to choose from. Animal healthcare service providers evaluate the cost of clinical and prophylactic services based on the nature of the disease, qualification of the healthcare practitioner, means of transportation, and perceived wealth of the client. A client’s ability to pay is assessed by such criteria as type of housing, breed of animals, and farm layout influences the fees for clinical services. Accordingly, the fees charged for a given service vary a great deal both within and across different service providers. Most livestock farmers are either unable (or do not bother) to assess the professional qualification of animal healthcare service providers. The title “doctor,” meant for a qualified professional veterinarian, is used for all service providers, irrespective of their qualifications. The paraprofessionals working with the professionals often observe the rates charged by their supervisors for given cases and
  • 70. Confidential Surgipharm Limited subsequently use these as guidelines for their own fee structures. Given the farmers’ inability to differentiate between a professional veterinarian and a paraprofessional, uniform charges are often levied to specific clients. Most animal healthcare practitioners do not clearly itemize their charges into transportation costs, professional fees, and margins on drugs. In fact, few professional veterinarians and paraprofessionals fix their professional fees for cases, even though guidelines are provided by the Kenya Veterinary Association (KVA). The general trend is to consolidate the charges into a single fixed fee, and farmers are often made to believe they are paying for the drugs rather than for a professional service. As a result, livestock farmers face ex ante search and information costs in the animal healthcare delivery market. It is hypothesized that transaction cost is one of the key factors influencing the choice of animal healthcare service provider. The distance to the nearest alternative clinic run by a paraprofessional and frequency of use of animal healthcare services positively influence the probability of consulting a veterinarian. Professional qualification is not critical in the choice of service provider. The density of veterinarians in a particular zone, frequency of transactions, ethnicity of a service provider, and frequency of previous contact influence the probability of consulting a professional veterinarian and Para veterinarians. Service providers of similar ethnic background to their clients are likely to have a higher degree of trust from the farmers. Following repeated transactions, farmers are better able to assess the quality of services provided by a given provider. Trust based on reputation is thus built among the transacting parties. Likewise, members of a similar ethnic group belong to the same social networks.
  • 71. Confidential Surgipharm Limited 2.4 Market Opportunities Overview i. Increase in significance of Livestock production in Kenya by the Government and Farmers leading to focus on Animal HealthCare. Improving Animal Health is fundamental to improving overall productivity. Need to establish disease free zones to improve export trade in Livestock. ii. Farmers acknowledging professionalism in Animal HealthCare iii. Growing Companion animal / Pet Industry iv. Great focus on private sector by Veterinary practitioners v. Partnership of Veterinary practitioners and farmers with the Pharmaceutical Sector which is currently very low. vi. Working closely with Farmers Cooperatives and Livestock producers to improve accessibility of Veterinary services to small scale livestock owners thus economies of scale in supply of drugs. vii. Focus on ASAL areas. It is in this Arid and Semi-arid land that livestock tend to be at greatest risk from diseases and drought. Great potential in working with NGO’s in this area. viii. Training of Veterinary practitioners in Business Acumen by the Pharmaceutical Industry ix. Focus on ranches and higher rainfall areas of the Country with high potential in Dairy Industry.
  • 72. Confidential Surgipharm Limited 2.5 Key Challenges in the Market Overview i. Animal Health specialists are considered as a measure of last resort. ii. Intense price competition (due to generics, parallel imports counterfeits etc.) within the industry iii. Kenya’s National Economic difficulties and prolonged periods of drought iv. Tax burdens and lack of adequate product protection across the value chain. v. Large number of informal unregistered suppliers of Veterinary products vi. Fragmented Regulatory sector that lacks enough human resource etc vii. Few Veterinary practitioners in the private sector viii. Lack of key market data to assist in decision making along the entire value chain. ix. High costs of animal healthcare. x. Profit margins are low coupled with high cost of distribution expenses xi. Antimicrobial resistance due to non-professionalism in the sector
  • 73. 3. MARKET SEGMENTATION AND GEOGRAPHICAL ANALYSIS 1. Structure of the Veterinary (Animal) Pharmaceutical Industry The veterinary pharmaceutical industry consists of three segments:  The manufacturers/importers,  The distributors/wholesalers  The retailers. The veterinary pharmaceutical industry interconnectedness with other sectors and its significant investments in technology, research, and development mean that the industry’s gains can have an outsized effect on the economy as a whole. The domestic veterinary pharmaceutical industry in Kenya shows considerable strengths and has significant opportunities for growth and development. As per the Kenyan Government, the veterinary pharmaceutical products are categorized according to particular levels: A. Veterinary pharmaceuticals B. Biologicals C. Alternative medicines D. Nutrients (Pre-mixes) E. Veterinary pesticides F. Equipment and materials of veterinary relevance Confidential Surgipharm Limited