Livestock Marketing in Kenya and Ethiopia: A Review of Policies and Practice

Yacob Aklilu October 2008

ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱSuggestedȱcitation:ȱAklilu,ȱ Y.ȱ (2008).ȱ LivestockȱMarketingȱ inȱ Kenyaȱ andȱ Ethiopia:ȱ Aȱ Reviewȱ ofȱ Policiesȱ andȱPractice.ȱFeinsteinȱInternationalȱCenter,ȱAddisȱAbaba.ȱȱThisȱ reportȱ isȱ aȱ productȱ ofȱ theȱ PastoralȱAreasȱCoordination,ȱAnalysisȱ andȱPolicyȱ Supportȱ(PACAPS)ȱprojectȱofȱ theȱFeinsteinȱ InternationalȱCenter,ȱTuftsȱUniversity,ȱ fundedȱbyȱUSAIDȱEastȱAfrica.ȱ

TableȱofȱContentsȱ ȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ1.ȱ Introductionȱ ȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ1ȱȱ2.ȱ GeneralȱPolicyȱOutlinesȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ3ȱȱ3.ȱ AnimalȱHealthȱ ȱ ȱ ȱ ȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ8ȱȱ 3.1ȱ MarketingȱandȱAnimalȱHealthȱinȱKenyaȱ ȱ ȱ ȱ ȱ8ȱȱ 3.2ȱ MarketingȱandȱAnimalȱHealthȱinȱEthiopiaȱ ȱ ȱ 13ȱȱȱȱȱȱȱȱȱȱȱȱȱ3.3ȱȱȱȱȱȱȱInadequacyȱofȱResourceȱAllocationsȱ ȱ ȱ ȱ 17ȱȱ4.ȱ Infrastructureȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 17ȱȱ5.ȱ MeatȱExportsȱȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 19ȱȱ 5.1ȱ IssuesȱinȱKenyaȱ ȱ ȱ ȱ ȱ ȱ ȱ 19ȱȱ 5.2ȱ IssuesȱinȱEthiopiaȱ ȱ ȱ ȱ ȱ ȱ ȱ 22ȱȱ6.ȱ LiveȱAnimalȱExportsȱ ȱ ȱ ȱ ȱ ȱ ȱ 23ȱȱ7.ȱ MarketȱStratificationȱ ȱ ȱ ȱ ȱ ȱ ȱ 24ȱȱ8.ȱ CommercialȱProductionȱandȱBreedingȱIssuesȱ ȱ ȱ ȱ 29ȱȱ9.ȱ ProvisionȱofȱFinancialȱServicesȱtoȱPastoralȱAreasȱ ȱ ȱ 31ȱȱ10.ȱ CrossȬBorderȱTradeȱȱ ȱ ȱ ȱ ȱ ȱ ȱ 35ȱȱ11.ȱ Conclusionsȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 36ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱReferencesȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ 38ȱ

AcronymsȱȱADBȱ ȱ AfricanȱDevelopmentȱBankȱADCȱ ȱ AgriculturalȱDevelopmentȱCorporationȱALLPROȱ ASALȱBasedȱLivestockȱandȱRuralȱLivelihoodsȱSupportȱProjectȱALRMPȱ AridȱLandsȱResourceȱManagementȱProgrammeȱ(Kenya)ȱAPHRDȱ AnimalȱandȱPlantȱHealthȱRegulatoryȱDepartmentȱ(Ethiopia)ȱASALȱȱ AridȱandȱSemiȱAridȱLandsȱCAADPȱ ComprehensiveȱAfricaȱAgricultureȱDevelopmentȱProgrammeȱCAHWȱ CommunityȱbasedȱAnimalȱHealthȱWorkersȱCBOȱ ȱ CommunityȱBasedȱOrganisationȱCOMESAȱ CommonȱMarketȱforȱEasternȱandȱSouthernȱAfricaȱDFZȱ ȱ DiseaseȱFreeȱZoneȱDVSȱ ȱ DepartmentȱofȱVeterinaryȱServicesȱEUȱ ȱ EuropeanȱUnionȱFAOȱ ȱ FoodȱandȱAgricultureȱOrganisationȱFMDȱ ȱ FootȱandȱmouthȱdiseaseȱGDPȱ ȱ GrossȱDomesticȱProductȱHACCPȱ HazardȱAnalysisȱCriticalȱControlȱPointsȱIBARȱ ȱ InterafricanȱBureauȱforȱAnimalȱResourcesȱIGADȱ ȱ InterȱGovernmentalȱAuthorityȱforȱDevelopmentȱKLMCȱȱ KenyaȱLivestockȱMarketingȱCouncilȱKMCȱ ȱ KenyaȱMeatȱCommissionȱLMAȱ ȱ LivestockȱMarketingȱAuthorityȱ(Ethiopia)ȱMoARDȱ MinistryȱofȱAgricultureȱandȱRuralȱDevelopmentȱ(Ethiopia)ȱMoFEDȱ MinistryȱofȱFinanceȱandȱEconomicȱDevelopmentȱ(Ethiopia)ȱMoLFDȱ MinistryȱofȱLivestockȱandȱFisheriesȱDevelopmentȱ(Kenya)ȱMTȱ ȱ MetricȱTonneȱNAHDICȱ NationalȱAnimalȱHealthȱDiagnosticȱandȱInvestigationȱCenterȱNGOȱ ȱ NonȱGovernmentalȱOrganizationȱOIEȱ ȱ OfficeȱinternationalȱdesȱepizooticsȱPACAPSȱ PastoralȱCoordination,ȱAnalysisȱandȱPolicyȱSupportȱ(Project)ȱPLIȱ ȱ PastoralȱLivelihoodȱInitiativeȱ(Ethiopia)ȱPPGȱ ȱ PastoralȱProducerȱGroupsȱRELPAȱ RegionalȱEnhancedȱLivelihoodȱforȱPastoralȱAreasȱRVFȱ ȱ RiftȱValleyȱfeverȱSATȱ ȱ SouthȱAfricanȱTypeȱSPSȬLMMȱ SanitaryȱandȱPhytoȱSanitaryȱ–ȱLivestockȱandȱMeatȱMarketingȱ(Project)ȱTADȱ ȱ TransboundaryȱAnimalȱDiseaseȱUSAIDȱ UnitedȱStatesȱAgencyȱforȱInternationalȱDevelopmentȱVOCAȱȱ VoluntaryȱOrganizationȱofȱCooperativesȱinȱAmericaȱȱ

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1.ȱ INTRODUCTIONȱȱTheȱ lastȱ fewȱ yearsȱ haveȱwitnessedȱ aȱ renewedȱ interestȱ inȱ theȱ exportȱ ofȱ liveȱanimalsȱandȱmeatȱfromȱKenyaȱandȱEthiopia.ȱInȱbothȱcases,ȱtheȱprivateȱsectorȱhasȱ takenȱ theȱ leadȱ inȱ initiatingȱ orȱ advocatingȱ forȱ theȱ revivalȱ ofȱ theȱ exportȱbusiness,ȱ promptingȱ theȱ respectiveȱ governmentsȱ toȱ payȱ attentionȱ toȱ theȱpotentialsȱofȱȱȱlivestockȱtrade.ȱȱȱInȱKenya,ȱ thisȱmoveȱwasȱ enhancedȱbyȱ theȱ formationȱofȱ aȱnewȱMinistryȱ forȱLivestockȱandȱFisheries.ȱThisȱhasȱledȱtoȱtheȱreȬoperationalizationȱofȱtheȱKenyaȱMeatȱCommissionȱ (KMC),ȱnewȱplansȱ toȱsetȱupȱsatelliteȱabattoirsȱ inȱstrategicȱlocationsȱ alongȱ theȱ northernȱ corridor,ȱ innovativeȱ approachesȱ toȱ improveȱdilapidatedȱ marketȱ infrastructureȱ andȱ aȱ continuedȱ interestȱ inȱ addressingȱsanitaryȱ requirementsȱ relatedȱ toȱ livestockȱ andȱmeatȱ trade.ȱ Kenyaȱ hasȱ alsoȱincorporatedȱ aȱ livestockȱ marketingȱ policyȱ inȱ theȱ nationalȱ livestockȱ policyȱdocumentȱ (stillȱ inȱdraft).ȱ ȱPriorȱ toȱ this,ȱ interestedȱgroupsȱsuchȱasȱ theȱKenyaȱLivestockȱ Marketingȱ Councilȱ (KLMC),ȱ initiallyȱ supportedȱ byȱ Aridȱ LandȱResourceȱManagementȱ Projectȱ (ALRMP),ȱ hadȱ setȱ upȱ variousȱ districtȬbasedȱlivestockȱmarketingȱgroupsȱandȱplayedȱaȱmajorȱroleȱinȱraisingȱawarenessȱandȱestablishingȱlinkagesȱbetweenȱproducersȱandȱpotentialȱimporters.ȱȱȱDuringȱ theȱ lastȱ tenȱ yearsȱ inȱ Ethiopia,ȱ theȱ privateȱ sectorȱ hasȱ beenȱ activeȱ inȱsettingȱ upȱ exportȱ abattoirsȱ andȱ alsoȱ inȱ theȱ exportingȱ ofȱ liveȱ animals.ȱGovernmentȱ supportȱ toȱ thisȱ sectorȱ wasȱ providedȱ throughȱ theȱ LivestockȱMarketingȱAuthorityȱ (LMA)1,ȱ underȱ theȱMinistryȱ ofȱAgricultureȱ andȱRuralȱDevelopmentȱ (MoARD)ȱ atȱ theȱ time,ȱ formingȱ exporter’sȱ associations,ȱidentifyingȱpotentialȱexportȱmarkets,ȱfacilitatingȱexportȱproceduresȱandȱsoȱon.ȱBilateralȱprogramsȱspecificallyȱdesignedȱtoȱaddressȱsanitaryȱissuesȱareȱalsoȱonȱtheȱfore.ȱȱAnȱ increasingȱ numberȱ ofȱ donorsȱ (USAIDȱ andȱ EUȱ inȱ particular),ȱ FAOȱ andȱNGOsȱareȱalsoȱengagedȱinȱsupportingȱlivestockȱmarketingȱfromȱpastoralȱareasȱeitherȱthroughȱnational,ȱregional,ȱcrossȬborderȱorȱareaȬbasedȱprograms.ȱSomeȱofȱ theseȱ programsȱ haveȱ beenȱ orȱ areȱ beingȱ implementedȱ throughȱ regionalȱorganizationsȱ suchȱ asȱ theȱ Africaȱ Union/Interafricanȱ Bureauȱ forȱ AnimalȱResourcesȱ (AU/IBAR),ȱ Commonȱ Marketȱ forȱ Easternȱ andȱ Southernȱ Africaȱ(COMESA)ȱ andȱ theȱ IntergovernmentalȱAuthorityȱ forȱDevelopmentȱ (IGAD),ȱandȱ someȱ throughȱ nationalȱ basedȱ institutionsȱ orȱ asȱ standȬaloneȱ projects.ȱManyȱ ofȱ theȱ NGOsȱ operateȱ atȱ theȱ localȱ levelȱ withȱ aȱ fewȱ exceptionsȱ thatȱoperateȱatȱtheȱnationalȱlevel.ȱȱ 1 The LMA was dissolved some three years ago. Livestock marketing issues are now handled by the State Minister for agricultural inputs and marketing. Livestock is now considered as one of the various agricultural commodities which the Ministry handles.

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Consideringȱ theȱ sizeȱ ofȱ theȱ humanȱ populationȱ thatȱ dependsȱ onȱ livestockȱproductionȱ inȱ bothȱ countries,ȱ theȱ developmentȱ ofȱ domesticȱ andȱ exportȱmarketsȱisȱcriticalȱtoȱalleviatingȱpoverty,ȱraisingȱrevenuesȱandȱcontinuingȱtheȱtrendȱ towardsȱmoreȱmarketȬorientation.ȱ Inȱ realizationȱofȱ thisȱpotential,ȱbothȱgovernmentsȱareȱ takingȱsomeȱencouragingȱmeasuresȱ towardsȱpromotingȱ theȱmarketingȱ ofȱ livestock,ȱ specificallyȱ fromȱ pastoralȱ areas.ȱHowever,ȱ livestockȱandȱmeatȱmarketing,ȱespeciallyȱexports,ȱisȱaȱcomplexȱprocess.ȱTheȱsubsistenceȱproductionȱsystemsȱ inȱEthiopiaȱandȱKenyaȱcannotȱcompeteȱwithȱcommercialȱproducersȱ inȱBrazilȱorȱAustralia.ȱ Internationalȱ tradeȱbarriersȱ (SPS,ȱ tariffȱandȱnonȬtariff)ȱ imposeȱhugeȱ limitationsȱonȱbothȱcountries.ȱExportȱmarketingȱandȱpromotionalȱstrategiesȱinȱdestinationȱcountriesȱareȱalmostȱnonȬexistent.ȱThereȱisȱ noȱ economyȱ ofȱ scaleȱ toȱ offsetȱ costs.ȱ Inȱ short,ȱ theȱ livestockȱ andȱ meatȱmarketingȱ systemsȱ areȱ notȱ asȱ efficientȱ norȱ asȱ streamlinedȱ asȱ thoseȱ ofȱ theirȱcompetitors.ȱȱȱYet,ȱ theseȱproblemsȱareȱnotȱ insurmountableȱ inȱ theȱ longȱ term.ȱSomeȱ requireȱsubstantialȱ investments,ȱ forȱ example,ȱ inȱ animalȱ healthȱ andȱ SPSȱ systems,ȱinfrastructureȱandȱprocessingȱfacilities.ȱOthersȱmayȱrequireȱaȱcombinationȱofȱinvestmentȱandȱattitudinalȱchangesȱsuchȱasȱshiftingȱtheȱmodeȱofȱproductionȱtoȱmeetȱ whatȱ theȱ marketȱ demands.ȱ Competingȱ inȱ theȱ internationalȱ marketȱentailsȱ acquiringȱ andȱ practicingȱ savvyȱ marketingȱ strategiesȱ alongȱ withȱavailingȱ theȱ rightȱ productȱ onȱ time.ȱObviously,ȱ aȱ publicȱ andȱ privateȱ sectorȱpartnershipȱisȱcrucialȱtoȱachievingȱlongȬtermȱobjectives.ȱMoreȱimportantly,ȱanȱappropriateȱpolicyȱ frameworkȱ isȱ theȱpreȬrequisiteȱ forȱprovidingȱanȱenablingȱenvironmentȱ forȱ allȱ actors.ȱ Thisȱ paperȱ willȱ lookȱ intoȱ someȱ policyȱ andȱoperationalȱissues.ȱȱObjectiveȱȱTheȱobjectiveȱofȱthisȱpaperȱisȱtoȱprovideȱinsightsȱonȱlivestockȱmarketingȱpolicyȱissuesȱ forȱ theȱCOMESAȱSecretariatȱunderȱ theȱPACAPS/RELPAȱprogramme.ȱTheȱ paperȱ constitutesȱ partȱ ofȱ theȱ inȬhouseȱ capacityȱ buildingȱ programȱ onȱpastoralȱ policyȱ issuesȱ forȱ theȱ Secretariatȱ inȱ conjunctionȱ withȱ theȱ trainingȱcoursesȱprovidedȱbyȱPACAPSȱ toȱCOMESAȱ staffȱ andȱCAADPȱ countryȱ focalȱpoints.ȱItȱisȱanticipatedȱthatȱtheȱoverallȱcapacityȱbuildingȱeffortȱwillȱtranslateȱintoȱtheȱproȬactiveȱengagementȱofȱtheȱpastoralȱsectorȱinȱtheȱCAADPȱprocess.ȱȱȱStructureȱȱTheȱpaperȱ reviewsȱ selectedȱ livestockȱmarketingȱpolicyȱandȱ someȱoperationalȱissuesȱinȱbothȱKenyaȱandȱEthiopia.ȱItȱisȱstructuredȱtoȱprovideȱsomeȱdetailsȱonȱnineȱpertinentȱissuesȱthatȱareȱcriticalȱforȱtheȱdevelopmentȱofȱpastoralȱlivestockȱmarketsȱinȱorderȱthatȱCOMESAȱmayȱfocusȱonȱpriorityȱareas.ȱIssuesȱdiscussedȱ

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willȱ focusȱ onȱ generalȱ policyȱ outlines,ȱ animalȱ healthȱ servicesȱ andȱinfrastructure;ȱtheȱstatusȱofȱmeatȱandȱliveȱanimalȱexports,ȱmarketȱstratificationȱandȱfeeds,ȱcommercialȱproductionȱandȱtheȱprovisionȱofȱfinancialȱservices.ȱTheȱdiscussionȱ onȱ eachȱ topicȱ incorporatesȱ analysisȱ andȱ suggestionsȱ forȱimprovement.ȱȱMethodologyȱȱRelevantȱ documentsȱwereȱ reviewedȱ inȱ bothȱ countries;ȱ theseȱ includeȱ policyȱdrafts/documents,ȱ sessionalȱ papers,ȱ commissionedȱ orȱ nonȬcommissionedȱspecificȱstudies,ȱprojectȱappraisals,ȱmidȬtermȱorȱterminalȱevaluations,ȱprogressȱreportsȱ andȱvariousȱ articlesȱ inȱ journalsȱ andȱnewspapers.ȱTheȱ findingsȱ fromȱtheseȱreviewsȱwereȱfurtherȱrefinedȱthroughȱinterviewsȱheldȱwithȱvariousȱkeyȱinformantsȱ inȱ theȱDepartmentȱofȱVeterinaryȱServicesȱ (DVS)ȱ inȱeachȱcountry,ȱotherȱ relevantȱ governmentȱ andȱprivateȱ financialȱ institutions,ȱmeatȱ andȱ liveȱanimalȱ exportersȱ andȱ specializedȱ groupsȱ suchȱ asȱ livestockȱ marketingȱcooperativesȱandȱtheȱKLMC.ȱȱȱȱ2.ȱ GENERALȱPOLICYȱOUTLINESȱȱEthiopiaȱ ranksȱ firstȱ inȱ livestockȱ resourcesȱ inȱ Africaȱ withȱ theȱ potentialȱ toȱexportȱ substantialȱ numbersȱ ofȱ liveȱ animalsȱ andȱmeatȱ products.ȱ However,ȱvariousȱ constraintsȱ continueȱ toȱhinderȱ internationalȱ tradeȱ toȱdestinationsȱofȱchoiceȱ turningȱ theȱ countryȱ intoȱ aȱmajorȱ supplierȱ ofȱ liveȱ cattle,ȱ camelsȱ andȱshoatsȱ toȱ itsȱ neighboringȱ countriesȱ Ȭȱ atȱ aȱ levelȱ unparalleledȱ elsewhereȱ inȱAfrica.ȱ Kenya,ȱ theoretically,ȱ isȱ aȱ meatȱ deficitȱ country,ȱ butȱ itsȱ shortfallȱ isȱcoveredȱ throughȱcrossȬborderȱ importsȱ fromȱTanzania,ȱEthiopiaȱandȱSomaliaȱand,ȱ toȱ someȱ extent,ȱ fromȱ Southȱ Sudan.ȱKenya’sȱ exportȱpotentialȱ emanatesȱprimarilyȱ fromȱ suchȱ crossȬborderȱ liveȱ animalȱ imports,ȱ althoughȱ significantȱlivestockȱresourcesȱexistȱ inȱ itsȱNorthȬeasternȱandȱNorthernȱprovincesȱasȱwellȱasȱinȱsomeȱofȱtheȱcommercialȱranches.ȱȱȱȱBothȱcountriesȱareȱkeenȱtoȱpromoteȱtheȱexportȱofȱliveȱanimalsȱandȱmeatȱwithȱaȱgrowingȱ interestȱ inȱvalueȱadditionȱbyȱmaximizingȱexportȱ revenues,ȱcreatingȱjobsȱ andȱ offsettingȱ theȱ limitationsȱ arisingȱ fromȱ SPSȱ requirementsȱ forȱ liveȱanimalȱexports.ȱInȱrecentȱyears,ȱtheȱrespectiveȱgovernmentsȱhaveȱtakenȱsomeȱencouragingȱinitiativesȱtoȱfacilitateȱandȱpromoteȱlivestockȱtrade.ȱByȱandȱlarge,ȱtheseȱ includeȱ establishingȱ relevantȱ governmentȱ departments/ministries,ȱpolicyȱ initiativesȱ toȱ promoteȱ agriculturalȱ development,ȱ povertyȱ reduction,ȱacceleratedȱ economicȱ growthȱ policyȱ frameworksȱ andȱ theȱ settingȱ upȱ ofȱbilateralȱorȱmultilateralȱprogramsȱfocusingȱspecificallyȱonȱlivestockȱorȱpastoralȱdevelopment.ȱ Someȱ ofȱ theseȱ programsȱ incorporateȱ livestockȱ andȱ meatȱmarketingȱcomponents,ȱalbeitȱwithȱveryȱmixedȱimpacts.ȱ

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ȱInȱ Kenya,ȱ theȱ importanceȱ ofȱ livestockȱ marketingȱ andȱ valueȱ additionȱ isȱhighlightedȱ inȱ theȱMoLFDȱ ‘sȱsessionalȱpaperȱonȱ livestockȱpolicyȱ (inȱdraft,ȱatȱtheȱ timingȱofȱwritingȱ thisȱreport).ȱTheȱdraftȱpolicyȱpaperȱacknowledgesȱ thatȱtheȱmarketingȱofȱlivestockȱandȱlivestockȱproductsȱshouldȱbeȱaȱmajorȱeconomicȱenterprise,ȱhandledȱ largelyȱbyȱ theȱprivateȱsector,ȱ ‘withȱ theȱgovernmentȱonlyȱofferingȱ regulatoryȱ andȱ facilitationȱ services’.ȱ ȱ Itȱ concedesȱ thatȱ itsȱ accessȱ toȱEuropeanȱandȱMiddleȱEastȱmarkets2ȱhasȱbeenȱhamperedȱdueȱtoȱtheȱcountry’sȱinabilityȱ toȱmeetȱSPSȱstandardsȱandȱ thatȱ theȱdistributionȱsystemȱofȱ livestockȱproductsȱhasȱbeenȱpoorlyȱdevelopedȱinȱtheȱcountry.ȱȱȱFutureȱ policyȱ directionsȱ includeȱ theȱ institutionalizationȱ ofȱ emergencyȱlivestockȱoffȬtakeȱ (fromȱpastoralȱ areas)ȱ asȱ aȱdroughtȱmitigationȱmeasureȱbyȱsettingȱupȱaȱrobustȱdroughtȱearlyȱwarningȱandȱresponseȱsystem;ȱrehabilitationȱofȱdilapidatedȱinfrastructureȱ(roads,ȱholdingȱgroundsȱandȱstockȱroutes)ȱalongȱwithȱprotectingȱholdingȱgroundsȱfromȱacquisitionȱbyȱprivateȱdevelopers.ȱOneȱinterestingȱdevelopment,ȱinȱthisȱregard,ȱisȱtheȱideaȱtoȱploughȱbackȱsomeȱofȱtheȱcessȱ revenueȱ collectedȱ byȱ localȱ councilsȱ towardsȱ theȱ developmentȱ andȱmaintenanceȱofȱmarketȱinfrastructure.ȱDueȱimportanceȱisȱalsoȱgivenȱtoȱsettingȱupȱ anȱ efficientȱ marketȱ informationȱ systemȱ toȱ minimizeȱ distortionsȱ andȱenhanceȱchoicesȱforȱbothȱproducersȱandȱbuyers.ȱInȱrecognitionȱofȱtheȱadverseȱimpactsȱofȱ insecurityȱonȱ livestockȱmarketingȱ (particularlyȱ inȱpastoralȱareas),ȱtheȱ policyȱ paperȱ aimsȱ toȱ promoteȱ peaceȱ inȱ collaborationȱwithȱ theȱ pastoralȱcommunitiesȱwhichȱmightȱthen,ȱforȱexample,ȱallowȱtheȱtrekkingȱ(ratherȱthanȱtheȱmoreȱexpensiveȱtrucking)ȱofȱtradeȱherds.ȱȱȱEmphasisȱ isȱ alsoȱ placedȱ onȱ promotingȱ theȱ processingȱ andȱ consumptionȱ ofȱcamelȱ products,ȱ includingȱ camelȱ milk3,ȱ inȱ localȱ andȱ exportȱ markets,ȱ andȱfosteringȱanȱȱenablingȱenvironmentȱforȱtheȱmarketingȱofȱ‘emergingȱlivestock’ȱproductsȱ(mainlyȱofȱwildlifeȱresources)ȱbyȱharmonizingȱexistingȱlawsȱ(e.g.ȱtheȱWildlifeȱAct)ȱ thatȱotherwiseȱ contradictȱ suchȱ initiatives.ȱFurthermore,ȱKenyaȱaimsȱ toȱ improveȱ theȱ standardsȱ ofȱmeatȱ andȱmilkȱ productsȱ toȱ ensureȱ ‘theȱcompetitivenessȱofȱlocalȱproductsȱbyȱinstallingȱtheȱnecessaryȱmechanismsȱthatȱareȱ acceptableȱ toȱ regionalȱ andȱ internationalȱmarkets’;ȱ thisȱ policyȱ includesȱhoneyȱproductsȱasȱwell.ȱȱȱValueȱ additionȱ isȱ recommendedȱ forȱmilk,ȱmeat,ȱ hides,ȱ skins,ȱwool,ȱ honey,ȱbones,ȱblood,ȱ feathers,ȱhoovesȱandȱhornsȱbecauseȱofȱ theirȱcurrentȱ lowȱvalueȱchainȱthatȱresultsȱinȱlowȱearnings.ȱTheȱpolicyȱenvisagesȱaȱroleȱforȱtheȱMoLFDȱinȱdevelopingȱincentivesȱforȱvalueȱadditionȱenterprisesȱinvolvingȱcottageȱandȱ

2 Although this is stated in the draft policy document, Kenya is now accessing the Middle East market. 3 Packed camel milk is now available in Kenyan supermarkets through a private initiative

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largeȬscaleȱvalueȱaddingȱindustries.ȱToȱovercomeȱlimitationsȱofȱtechnologicalȱadvancement,ȱ skillsȱ developmentȱ isȱ incorporatedȱ asȱ anȱ integralȱ partȱ ofȱ theȱvalueȱ additionȱ process.ȱ Toȱ buttressȱ theȱ valueȱ additionȱ chain,ȱ theȱMinistryȱplansȱ toȱ setȱ upȱ anȱ inȬhouseȱ agriȬbusinessȱ andȱ valueȱ additionȱ officeȱ toȱcoordinateȱactivities.ȱȱȱTheȱMoLFDȱacknowledgesȱthatȱoverȱtheȱpastȱdecadeȱtheȱlivestockȱsectorȱhasȱbeenȱallocatedȱonlyȱaȱsmallȱproportionȱofȱ theȱannualȱnationalȱbudget.ȱWhileȱtheȱMinistryȱenvisionsȱaȱcorrespondingȱbudgetaryȱincreaseȱtoȱexecuteȱitsȱnewȱmandate,ȱitȱisȱalsoȱadvocatingȱforȱincreasedȱcreditȱprovisionȱforȱsmallȱorȱlargeȬscaleȱproducers,ȱtradersȱandȱtheȱlikeȱinȱtheȱsector.ȱȱȱInȱaȱbidȱtoȱrevampȱtheȱlivestockȱsectorȱdevelopment,ȱMoLFDȱhasȱdevelopedȱaȱnumberȱ ofȱ policiesȱ andȱ billsȱ incorporatingȱ dairy,ȱ livestockȱ feed,ȱ animalȱbreeding,ȱpoultryȱandȱapiculture.ȱTheseȱhaveȱbeenȱapprovedȱbyȱcabinetȱandȱforwardedȱtoȱparliamentȱforȱapproval.ȱȱTheȱALRMPȱpolicyȱdocumentȱforȱaridȱandȱsemiȬaridȱareasȱofȱKenyaȱisȱaimedȱatȱ fosteringȱ sustainableȱ developmentȱ forȱ pastoralȱ andȱ agroȬpastoralȱcommunitiesȱ inȱ whichȱ livestockȱmarketingȱ featuresȱ asȱ oneȱ ofȱ theȱ priorityȱareas.ȱ Basically,ȱ theȱ documentȱ canvassesȱ aȱ wideȱ rangeȱ ofȱ issuesȱ affectingȱpastoralȱ andȱ agroȬpastoralȱ communitiesȱ (land,ȱ water,ȱ education,ȱ health,ȱyouth,ȱgovernance,ȱmining,ȱ alternativeȱ livelihoods,ȱ tourismȱ etc.),ȱbutȱ itȱ alsoȱacknowledgesȱtheȱcriticalȱroleȱ livestockȱmarketingȱcanȱplayȱ inȱenhancingȱtheȱlivelihoodsȱ ofȱ pastoralistsȱ andȱ agroȬpastoralists.ȱ Theȱ existingȱ bottlenecksȱaffectingȱ livestockȱmarketingȱ listedȱ inȱ theȱALRMPȱpolicyȱdocumentȱandȱ theȱvisionsȱ forȱ theȱ futureȱ areȱ similarȱ toȱ thoseȱ ofȱMoLFD.ȱ Theȱ 10Ȭyearȱ policyȱdocumentȱ(2017Ȭ2016)ȱenvisagesȱtheȱconstructionȱofȱroadȱnetworks,ȱtheȱsettingȱupȱofȱmarketȱinformationȱsystems,ȱtheȱestablishmentȱofȱDFZsȱandȱabattoirsȱinȱkeyȱstrategicȱsites,ȱinvestmentȱinȱappropriateȱdiseaseȱcontrolȱandȱsurveillance,ȱtheȱpromotionȱofȱ camelȱproductionȱandȱ theȱ enhancementȱofȱ theȱmarketȱ forȱagriculturalȱproducts.ȱTwoȱkeyȱcomponentsȱofȱ theȱpolicyȱdocumentȱ includeȱwideningȱ andȱ deepeningȱ financialȱ servicesȱ inȱ ASALȱ areasȱ (forȱ smallȬscaleȱtraders,ȱ coȬoperatives,ȱ associations,ȱ smallȱ producers,ȱ etc)ȱ andȱ reducingȱtransactionȱ costsȱ forȱ crossȬborderȱ operationsȱ throughȱ infrastructureȱdevelopment.ȱȱDespiteȱ havingȱ theȱ largestȱ livestockȱ resourcesȱ inȱAfricaȱ andȱ unlikeȱ Sudan,ȱKenyaȱorȱTanzania,ȱEthiopiaȱdoesȱnotȱhaveȱaȱseparateȱcentralȱministryȱforȱtheȱlivestockȱsector.ȱTheȱMoARD,ȱwhichȱoverseesȱ livestockȬrelatedȱactivitiesȱandȱpolicies,ȱ isȱ itselfȱ dividedȱ intoȱ fourȱ Stateȱ ministries—naturalȱ resources,ȱagriculturalȱinputsȱandȱmarketing,ȱcropȱandȱanimalȱhusbandry,ȱandȱtheȱearlyȱwarningȱandȱresponseȱsector.ȱThus,ȱwhileȱanimalȱproductionȱandȱtheȱDVSȱfallȱ

6

underȱoneȱStateȱMinistry,ȱ livestockȱandȱmeatȱmarketingȱactivitiesȱ fallȱunderȱanother,ȱ althoughȱbothȱ stateȱministriesȱ reportȱ toȱMoARD.ȱFurthermore,ȱ theȱfederalȱstructureȱofȱtheȱgovernmentȱallowsȱaȱsignificantȱlevelȱofȱautonomyȱtoȱregionalȱgovernmentsȱempoweringȱtheȱlatterȱtoȱformulateȱregionalȱpoliciesȱonȱissuesȱ ofȱ aȱ wideȬrangingȱ natureȱ includingȱ livestockȱ marketing,ȱ taxation,ȱbudgetaryȱallocationsȱetc.ȱThoseȱregionsȱwithȱsignificantȱpastoralistȱandȱagroȬpastoralistȱ populationsȱ alsoȱ haveȱ theirȱ ownȱ pastoralȱdepartments/commissions4ȱ andȱ aȱ pastoralȱ unitȱ inȱ theȱ Ministryȱ ofȱ FederalȱAffairs,ȱatȱ federalȱ level,ȱassumesȱaȱsimilarȱ roleȱ toȱ theȱALRMPȱ inȱKenya.ȱ ȱ Inȱaddition,ȱaȱPastoralȱCoordinationȱUnitȱwasȱrecentlyȱsetȱupȱwithinȱtheȱDeputyȱPrimeȱMinister’sȱofficeȱ inȱ aȱbidȱ toȱprovideȱ additionalȱ supportȱ toȱ ‘emergingȱregions’ȱmainlyȱconsistingȱofȱpastoralȱareas.ȱȱInȱeffect,ȱthereȱisȱnoȱspecificȱlivestockȱmarketingȱpolicyȱatȱtheȱcentralȱlevelȱinȱEthiopia.ȱThisȱ isȱpartlyȱbecauseȱmeatȱandȱ liveȱanimalȱ tradeȱ constitutesȱonlyȱoneȱofȱtheȱmanyȱagriculturalȱproductsȱtheȱspecificȱStateȱMinistryȱresponsibleȱforȱtheȱmarketingȱofȱagriculturalȱproducesȱandȱinputsȱhandles.ȱPriorityȱisȱalsoȱgivenȱ toȱproductsȱ thatȱ currentlyȱgenerateȱmoreȱ substantialȱ exportȱ revenuesȱthanȱ meatȱ andȱ liveȱ animalsȱ (coffeeȱ andȱ horticulturalȱ crops,ȱ forȱ example).ȱȱEvenȱ ifȱ theȱ specificȱ stateȱ ministryȱ isȱ intentȱ onȱ developingȱ aȱ livestockȱmarketingȱpolicy,ȱ thisȱmayȱnotȱbeȱcomprehensiveȱasȱveterinaryȱservicesȱandȱanimalȱproductionȱareȱeachȱhousedȱinȱaȱdifferentȱstateȱministry.ȱ ȱAsȱaȱresult,ȱpoliciesȱ relatedȱ toȱ livestockȱmarketingȱ andȱ animalȱ healthȱ areȱ scatteredȱ inȱvariousȱpolicyȱdocumentsȱ suchȱasȱ inȱ theȱ investmentȱpolicy,ȱ theȱMinistryȱofȱFinanceȱ andȱ Economicȱ Developmentȱ (MoFED)ȱ 2005/06ȱ toȱ 2009/10ȱ Planȱ forȱAcceleratedȱ andȱ Sustainedȱ Developmentȱ Planȱ toȱ Endȱ Povertyȱ (PASDEP),ȱ tradeȱpolicyȱandȱspecificȱprogramsȱrelatedȱtoȱlivestockȱmarketingȱ(suchȱasȱtheȱSPSȬLMMȱproject).ȱTheȱrelevanceȱofȱsuchȱpoliciesȱtoȱlivestockȱmarketingȱappliesȱinȱtheȱgeneralȱsenseȱwhereasȱtheyȱcouldȱbeȱspecificȱinȱtheȱcaseȱofȱanimalȱhealthȱservices5ȱandȱotherȱdesignatedȱprogrammes.ȱȱȱForȱexample,ȱ theȱgeneralȱ investmentȱpolicyȱallowsȱ investorsȱ inȱ theȱ livestockȱsectorȱtoȱenjoyȱtheȱfollowingȱprivileges:ȱȱȱ

• incomeȱ taxȱ holidayȱ fromȱ twoȱ toȱ sixȱ yearsȱ andȱ upȱ toȱ eightȱ yearsȱ forȱspecialȱcircumstances;ȱȱ

• exemptionȱfromȱanyȱexportȱtaxȱandȱotherȱtaxesȱ leviedȱonȱexports;ȱfullȱexemptionȱ fromȱ paymentȱ ofȱ importȱ customȱ dutiesȱ andȱ otherȱ taxesȱleviedȱonȱimportsȱforȱtheȱinvestment;ȱȱ

4 For example, Afar, Oromia, Somali and Southern Nations have set up pastoral departments or commissions. 5 In the absence of a comprehensive policy document, specific national, bilateral and multi-lateral livestock/pastoral related programs serve as proxy indicators of policies on livestock marketing, animal health and other related sectors.

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• guaranteeȱ toȱ foreignȱ investorsȱ toȱ remitȱ inȱ convertibleȱ currencyȱ theȱprofitsȱandȱdividendsȱaccruingȱfromȱtheȱinvestmentȱasȱwellȱasȱprincipalȱandȱinterestȱonȱexternalȱloans.ȱȱ

ȱAdditionalȱpolicyȱ incentivesȱsinceȱJuneȱ2005ȱincludeȱsupportȱforȱtheȱcreationȱofȱindustryȱassociationsȱtoȱprovideȱaȱconsultationȱforumȱbetweenȱtheȱprivateȱsectorȱ andȱ theȱ government.ȱ ȱ Thisȱ hasȱ resultedȱ inȱ theȱ formationȱ ofȱ twoȱassociationsȱ relatedȱ toȱ meatȱ andȱ livestockȱ tradeȱ viz.ȱ theȱ Ethiopianȱ MeatȱExportersȱ Associationȱ andȱ Ethiopianȱ Liveȱ Animalȱ Exportersȱ Association;ȱderegulationȱ ofȱdomesticȱprices;ȱ liberalizationȱ ofȱ foreignȱ trade;ȱ institutionalȱsupportȱ forȱ theȱexportȱ sector;ȱpromulgationȱofȱaȱ liberalȱ investmentȱ lawȱandȱissuanceȱofȱaȱnewȱlaborȱlaw.ȱȱȱTheȱ MoFEDȱ fiveȬyearȱ allȬsectorȱ economicȱ developmentȱ planȱ isȱ shortȱ onȱbackgroundȱanalysisȱhavingȱmadeȱtheȱassumptionȱthatȱtheȱrelevantȱanalyticalȱcomponentsȱ areȱ alreadyȱ documentedȱwithȱ theȱ relevantȱministries.ȱ Policiesȱandȱstrategiesȱ forȱ theȱ livestockȱsubȬsectorȱ focusȱonȱgeneticȱ improvementȱ forȱsheepȱ andȱ cattleȱ (localȱ andȱ exoticȱ breeds)ȱ andȱ improvingȱ animalȱ feedȱproductionȱ (forageȱ feedȱ production/forageȱ banks,ȱ naturalȱ pastureȱimprovement,ȱmaximizingȱ cropȬresidueȱ feedȱ etc.).ȱ Theȱ livestockȱ andȱmeatȱmarketingȱcomponentȱofȱ theȱdocumentȱenvisageȱ theȱconstructionȱofȱaboutȱaȱdozenȱnewȱexportȱabattoirs,ȱ theȱestablishmentȱofȱnewȱandȱ theȱupgradingȱofȱexistingȱcoldȱstorageȱandȱpackingȱ facilities,ȱandȱ importationȱofȱThermoȬkingȱtrucksȱforȱtransportation.ȱȱInȱcontrastȱtoȱKenya,ȱtheȱMoFEDȱfiveȬyearȱplanȱandȱpolicyȱ documentȱ givesȱ emphasisȱ toȱ identifyingȱ andȱ penetratingȱ exportȱmarketsȱ(throughȱtradeȱmissionsȱorȱ inȬdepthȱstudiesȱofȱforeignȱmarkets)ȱandȱmarketableȱcommoditiesȱtransferȱstudies.ȱPromotionalȱactivitiesȱincludeȱtradeȱfairs,ȱ documentaryȱ filmsȱ andȱ theȱ developmentȱ ofȱ websitesȱ onȱ profilesȱ ofȱprivateȱorganizationsȱandȱcooperativesȱforȱfacilitatingȱtheȱexportȱmarket.ȱȱȱOfȱtheȱthreeȱmajorȱpastoralȱregionsȱofȱEthiopia,ȱtheȱOromiaȱRegionȱhasȱtakenȱtheȱ leadȱ inȱ settingȱ upȱ aȱ separateȱ Livestockȱ Resourcesȱ Developmentȱ andȱmarketingȱ Agencyȱ followingȱ aȱ studyȱ tourȱ toȱ Sudanȱ organizedȱ byȱ theȱ PLIȱprogramme.ȱ Thisȱ moveȱ wouldȱ enableȱ theȱ Agencyȱ toȱ focusȱ primarilyȱ onȱlivestockȱrelatedȱissuesȱinȱcontrastȱtoȱotherȱRegionsȱwhereȱpriorityȱisȱgivenȱtoȱcrops.ȱThereȱ isȱalsoȱhopeȱ thatȱ thisȱprecedenceȱwouldȱpromptȱ theȱotherȱ twoȱmajorȱpastoralȱRegions,ȱSomaliȱandȱAfar,ȱtoȱfollowȱsuit.ȱȱȱȱ

8

3.ȱ ANIMALȱHEALTHȱȱPoorȱ animalȱ healthȱ servicesȱ coupledȱ withȱ theȱ sporadicȱ outbreakȱ ofȱeconomicallyȱ importantȱ diseasesȱ (RVF,ȱ FMDȱ etc.)ȱ remainȱmajorȱ constraintsȱforȱ theȱmarketingȱofȱ livestockȱandȱmeatȱ fromȱ theȱHornȱ inȱgeneral.ȱOverȱ theȱlastȱ thirtyȱyears,ȱavailableȱevidenceȱ indicatesȱ thatȱ theȱallocationȱofȱresourcesȱforȱtheȱlivestockȱsubȬsectorȱ(andȱprincipallyȱforȱtheȱDVS)ȱhasȱbeenȱdecreasingȱbothȱ inȱabsoluteȱandȱproportionalȱ termsȱ (TambiȱandȱMaina,ȱ2002).ȱTheȱneedȱtoȱ strengthenȱ veterinaryȱ servicesȱ (throughȱ publicȱ andȱ privateȱ goods)ȱ isȱbecomingȱmoreȱ apparentȱ inȱ lightȱ ofȱ theȱ recurringȱ bansȱ beingȱ imposedȱ byȱimportingȱ countriesȱdespiteȱ initiativesȱ toȱ reviveȱ livestockȱ andȱmeatȱ exportsȱfromȱEthiopiaȱandȱKenya.ȱInȱreality,ȱbothȱcountriesȱhaveȱaȱlongȱwayȱtoȱgoȱtoȱbringȱ theȱ statusȱ ofȱ theirȱ veterinaryȱ servicesȱ toȱ internationallyȱ acceptableȱstandardsȱ givenȱ theȱ everȬincreasingȱ stringentȱ rulesȱ andȱ regulationsȱ beingȱformulatedȱbyȱactorsȱsuchȱasȱtheȱOIEȱandȱEU.ȱAtȱthisȱstage,ȱbothȱcountriesȱareȱformulatingȱpolicyȱinitiativesȱtoȱaddressȱtheȱissueȱusingȱdifferentȱapproaches.ȱInterestingly,ȱ theseȱ policyȱ initiativesȱ areȱ notȱ buttressedȱ byȱ proportionalȱincreasesȱinȱresourceȱallocationȱandȱinstead,ȱrelyȱonȱbilateralȱandȱmultilateralȱfunding6.ȱ Tambiȱ andȱ Mainaȱ (2002)ȱ suggestȱ thatȱ someȱ governmentsȱ evenȱreduceȱ allocatedȱ resourcesȱ whenȱ donorȱ fundingȱ becomesȱ available.ȱ Theȱcommitmentȱofȱbothȱgovernmentsȱ toȱ improvingȱveterinaryȱ servicesȱ remainsȱanȱ issueȱ ofȱ concernȱ untilȱ theirȱ intentȱ canȱ beȱ provenȱ throughȱ resourceȱallocation.ȱȱ3.1ȱ MarketingȱandȱAnimalȱHealthȱinȱKenyaȱȱȱVariousȱlegalȱstatutesȱempowerȱtheȱDVSȱinȱKenyaȱtoȱcontrolȱanimalȱdiseasesȱandȱpestsȱ –ȱ suchȱ asȱ theȱAnimalȱDiseasesȱAct,ȱCattleȱCleansingȱAct,ȱRabiesȱControlȱ Act,ȱ Brandingȱ Act,ȱ theȱ Cropȱ andȱ Livestockȱ Productionȱ Act,ȱVeterinaryȱandȱSurgeonsȱAct,ȱMeatȱControlȱAct,ȱLivestockȱMovementȱAct,ȱetc.ȱȱTheseȱactsȱareȱlegallyȱbindingȱ–ȱalthoughȱsomeȱofȱthemȱmayȱbeȱoutdated7ȱandȱtheirȱenforcementȱ isȱquestionable8.ȱ Inȱ recognitionȱofȱ theseȱ facts,ȱ theȱKenyanȱVeterinaryȱBoardȱ isȱpushingȱ forȱchangesȱandȱ isȱcurrentlyȱreviewingȱsomeȱofȱtheseȱactsȱ ȱincludingȱtheȱdraftingȱofȱnewȱonesȱinvolvingȱavianȱfluȱandȱDFZs.ȱPolicyȱreviewȱisȱaȱlengthyȱprocessȱinȱKenyaȱsinceȱitȱhasȱtoȱpassȱfirstȱthroughȱcabinetȱandȱthenȱthroughȱparliamentȱforȱapproval.ȱTherefore,ȱitȱmayȱtakeȱupȱ

6 ADB in Kenya and USAID in Ethiopia 7 For example, the provision governing the inspection of livestock for 100 days (for three CBPP tests) prior to exports could be unrealistic in today’s highly competitive world market. 8 The issuance of ‘movement permits’ is the most widely practiced aspect of this Act and without which livestock are not permitted to travel from high-risk areas to the terminal markets. The application of other aspects of the Act is subject to the available means.

9

toȱtwoȱtoȱthreeȱyearsȱforȱtheȱreviewȱprocessȱtoȱmaterialize.ȱNevertheless,ȱtheȱinitiativeȱhasȱbeenȱsetȱinȱmotion.ȱȱȱMeanwhile,ȱdespiteȱ theȱ trainingȱofȱ thousandsȱofȱCAHWs,ȱ theȱkeyȱ roleȱ theyȱplayedȱinȱeradicating/controllingȱrinderpestȱandȱtheirȱundisputedȱpositionȱasȱȱtheȱmainȱprovidersȱofȱanimalȱhealthȱservicesȱ toȱ theȱpastoralȱpopulation,ȱ theȱDVSȱdoesȱnotȱofficiallyȱ recognizeȱCAHWsȱexceptȱasȱ ‘theȱdevilȱ theyȱhaveȱ toȱworkȱwith’9.ȱ ȱWhateverȱ theȱ caseȱwasȱ inȱ theȱpast,ȱ theȱ exclusionȱ ofȱCAHWsȱfromȱrecognitionȱinȱtheȱreviewȱprocessȱwillȱbeȱanotherȱmissedȱopportunityȱforȱtheȱlivestockȱsectorȱinȱKenya.ȱInȱfact,ȱtheȱexistingȱAnimalȱDiseasesȱActȱ(CAPȱ364)ȱgivesȱtooȱmuchȱweightȱandȱpowerȱtoȱveterinarians,ȱandȱoneȱonlyȱhopesȱthatȱtheȱreviewȱprocessȱwillȱleadȱtoȱmoreȱappropriateȱsupportȱtoȱtheȱfullȱrangeȱofȱ veterinaryȱ paraȬprofessionalsȱ (diplomates,ȱ techniciansȱ andȱCAHWs).ȱ ȱ Inȱtheȱpast,ȱtheȱcontractingȱoutȱofȱsomeȱpublicȱservicesȱtoȱtheȱprivateȱsectorȱwasȱnotȱendorsedȱinȱgovernmentȱcircles,ȱalthoughȱOIEȱrulesȱstipulateȱthatȱcertainȱactivitiesȱ(someȱtypesȱofȱsurveillance,ȱtesting,ȱmanning,ȱetc)ȱcanȱbeȱperformedȱbyȱ theȱ privateȱ sector.ȱ Reversingȱ thisȱ concept,ȱ theȱ draftȱ policyȱ documentȱproposesȱaȱstrongerȱprivateȱsectorȱpartnershipȱbyȱfacilitatingȱandȱencouragingȱ‘selfȬemploymentȱandȱdeploymentȱofȱprofessionalsȱandȱ technicallyȱqualifiedȱpersonnelȱtoȱsustainablyȱserveȱtheȱsubȬsector’.ȱThisȱmoveȱwillȱobviouslyȱbringȱinȱaȱhostȱofȱadvantagesȱifȱtheȱpolicyȱgainsȱapproval.ȱItȱwillȱeaseȱtheȱfinancialȱburdenȱ onȱ theȱ government,ȱ introduceȱ paymentsȱ forȱ performanceȬbasedȱservices,ȱ improveȱqualityȱcontrolȱ throughȱcompetitionȱandȱpaveȱ theȱwayȱ forȱefficiencyȱandȱimagination.ȱȱPerhaps,ȱ theȱ singleȱ mostȱ prominentȱ butȱ questionableȱ measureȱ underȱconsiderationȱinȱKenyaȱisȱtheȱestablishmentȱofȱDFZsȱforȱincreasedȱexportsȱofȱliveȱ animalsȱ andȱ beef.ȱ Inȱ thisȱ connection,ȱ aȱ Ministerialȱ Committeeȱ hasȱproposedȱ theȱ followingȱ threeȱ areasȱ forȱ establishmentȱ ofȱDFZs:ȱNorthȱ Rift;ȱLaikipia/Timau/Kieniȱ andȱ theȱ GalanaȬKilifiȬKwaleȬTaitaȬTavetaȱ Ranchesȱ(Coastȱ region).ȱOfȱ these,ȱ someȱ activitiesȱ haveȱ beenȱ initiatedȱ throughȱADBȱfinancingȱ forȱ theȱ Coastȱ regionȱ DFZȱ 10.ȱ ȱ Apparently,ȱ theȱ DFZsȱ haveȱ beenȱplannedȱtoȱserveȱasȱtheȱlastȱholdingȱpointsȱforȱcattleȱthatȱhaveȱbeenȱvaccinatedȱandȱquarantinedȱenȬroute.ȱTheȱDFZsȱwillȱbeȱequippedȱwithȱdips,ȱwaterȱandȱfeedingȱ facilitiesȱandȱwillȱbeȱ fullyȱ fenced.ȱ Inȱaddition,ȱ financialȱ supportȱhasȱbeenȱ providedȱ throughȱ theȱ ADBȱ projectȱ forȱ rehabilitatingȱ twoȱ quarantineȱcentersȱatȱMirtiniȱandȱBachuma.ȱTheȱDFZsȱareȱintendedȱtoȱserveȱcattleȱcomingȱfromȱtheȱNorthȱandȱNorthȱEasternȱprovincesȱofȱKenya,ȱSomaliaȱandȱEthiopia.ȱȱ

9 Personal communication (name withheld). 10 DFZ is conspicuously not mentioned in the MoLFD draft policy document, although the MoLFD implements the ADB funded project covering 22 ASAL districts. Apparently, the DVS has some reservations that others are getting the money in the name of activities that belong to the DVS. The DVS advice in this regard is to focus on exporting meat rather than live animals.

10

ThereȱareȱaȱnumberȱofȱissuesȱthatȱneedȱtoȱbeȱconsideredȱwhenȱdeterminingȱifȱDFZsȱ areȱ theȱ rightȱ solutionȱ toȱ problemsȱ thatȱ areȱ inherentȱ inȱ theȱ system.ȱHistorically,ȱ Southernȱ Africanȱ nationsȱ (Namibia,ȱ Botswanaȱ andȱ SouthȱAfrica)11ȱ haveȱ beenȱ exportingȱ beefȱ onȱ theȱ basisȱ ofȱ zonesȱ freeȱ fromȱ FMDȱwithoutȱvaccination.ȱAccordingȱtoȱDr.ȱGavinȱThompson12ȱofȱSADC,ȱobtainingȱrecognitionȱofȱzonesȱ freeȱ fromȱFMDȱ isȱ ‘logisticallyȱdifficult,ȱveryȱexpensive13ȱandȱsociallyȱdisruptiveȱwithȱdisplacementȱandȱexclusionȱofȱlocalȱpopulationsȱandȱ livestock’.ȱ ȱ Theȱ practicalitiesȱ andȱ technicalȱ constraintsȱ areȱ frequentlyȱunderestimatedȱbyȱSubȬSaharanȱcountries.ȱ ȱHowever,ȱ70ȱtoȱ80ȱpercentȱofȱtheȱnationalȱ livestockȱ populationsȱ ownedȱ byȱ smallholdersȱ inȱ Namibiaȱ andȱBotswanaȱareȱexcludedȱ fromȱ theȱDFZsȱ inȱ thoseȱ countries,ȱwithȱnoȱaccessȱ toȱinternationalȱmarketsȱ forȱ theȱexcludedȱ farmers.ȱ Inȱotherȱwords,ȱ theȱDFZsȱ inȱbothȱ countriesȱ areȱmeantȱ forȱwhiteȬownedȱ ranchesȱ (withȱ aȱ fewȱ blackȱ eliteȱgroups).ȱDr.ȱThomsonȱadds,ȱ ‘AlthoughȱfreedomȱfromȱFMDȱwithȱvaccinationȱisȱpossible,ȱthisȱapproachȱisȱsoȱfarȱnotȱusedȱinȱSubȬSaharanȱAfricaȱbutȱappliedȱinȱSouthȱAmerica.ȱHowever,ȱtechnicalȱdifficultiesȱrelatedȱtoȱtheȱpurityȱofȱSATȱstrainsȱ inȱ theȱ regionȱ andȱ theȱ sensitivityȱ ofȱ diagnosticȱ testsȱ forȱ SATȱ typeȱvirusesȱmayȱmakeȱtheȱeffortȱdifficult.’ȱ ȱEvenȱ inȱtheȱabsenceȱofȱaȱDFZ,ȱKenyaȱhasȱsimplyȱdemonstratedȱthatȱitȱcanȱexportȱhealthyȱliveȱanimalsȱtoȱMauritius.ȱWhatȱ isȱ requiredȱ isȱ toȱ strengthenȱ thisȱ systemȱ byȱ settingȱ upȱ appropriateȱquarantineȱfacilitiesȱwithoutȱtheȱneedȱtoȱinvestȱinȱaȱDFZȱthatȱmayȱnotȱevenȱbeȱrecognizedȱbyȱ internationalȱauthorities.ȱTheȱ recurrenceȱofȱRVFȱalsoȱposesȱaȱspecificȱchallengeȱasȱmosquitoesȱcannotȱbeȱcontrolledȱbyȱfencingȱanȱarea.14ȱȱTheȱ relativelyȱ newȱ conceptȱ ofȱ compartmentalizationȱ asȱ aȱ complementȱ orȱ anȱalternativeȱ toȱ theȱDFZȱ conceptȱ isȱ basedȱ onȱ integratedȱ bioȬsecurityȱ systemsȱwhichȱ areȱ likelyȱ toȱ benefitȱ verticallyȱ integratedȱ (sophisticated)ȱ businessȱenterprisesȱpreferentially.ȱHowever,ȱtheȱOIE’sȱScientificȱCommissionȱdecisionȱthatȱcompartmentalizationȱshouldȱnotȱbeȱapplicableȱinȱtheȱcaseȱofȱFMDȱmakesȱtheȱeffortȱdaunting,ȱatȱleastȱinȱtheȱshortȬrun.ȱȱȱ

11 Zimbabwe is no longer in that category 12 A world expert on FMD and former Chairman of the OIE FMD and Other Epizootics Commission 13 For example, between 1992 and 2005 Namibia invested N$134 million for infrastructure and additional N$2 million p.a. for cattle registration while Botswana invested P166 million between 2000-2004 for the introduction of LITS and an additional P15 million p.a for maintenance/upgrading to comply with EU standards. 14 In theory, a DFZ could be established in areas where RVF outbreaks may not likely occur. However, the fact that RVF outbreaks occur within the country’s borders by itself poses a serious challenge for international authorities to recognize the DFZ.

11

Country Y

Feed production

Feed-lots

Abattoir & meat processing plant

Compartmentalization

Animal supp.

Compartmentalized, i.e. bio-secure, beef production chain

ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱSource:ȱGavinȱThompsonȱȱIfȱtheȱintentionȱtoȱcreateȱDFZsȱinȱKenya15ȱisȱsolelyȱforȱtheȱexportȱofȱmoreȱliveȱanimalsȱ (mainlyȱ cattle),ȱ oneȱ isȱ temptedȱ toȱ askȱ ifȱ theȱ marketȱ justifiesȱ theȱinvestment.ȱ Theȱ volumeȱ ofȱ liveȱ animalȱ exportȱ toȱ Mauritiusȱ isȱ notȱ thatȱsignificant,ȱ andȱ promisesȱmadeȱ byȱ Egyptȱ canȱ beȱ reversedȱ atȱ anyȱ timeȱ (asȱhappenedȱwithȱ Ethiopia).ȱ Asȱ agreedȱ byȱ thoseȱ inȱ theȱ industry,ȱ Kenyaȱ canȱbenefitȱ moreȱ throughȱ valueȱ additionȱ andȱ byȱ exportingȱ meatȱ products16.ȱHowever,ȱattemptsȱ toȱexportȱmeatȱ toȱhighȬendȱmarketsȱ (suchȱasȱEurope)ȱbyȱrevivingȱ theȱKenyanȱquotaȱ fromȱ theȱpreviousȱLomeȱConventionȱmayȱnotȱbeȱpossibleȱdueȱtoȱcomplicationsȱarisingȱfromȱtheȱreplacementȱofȱtheȱlatterȱbyȱtheȱEUȱEconomicȱPartnershipȱAgreement.ȱThisȱagreementȱmayȱnotȱincludeȱKenyaȱforȱmeatȱ commodities.ȱKenyaȱwouldȱbeȱwellȱadvisedȱ toȱ focusȱonȱ exportingȱmeatȱorȱliveȱanimalsȱtoȱMauritius,ȱEgypt,ȱtheȱMiddleȱEast,ȱMalaysiaȱandȱotherȱlessȱ demandingȱ destinationsȱ whereȱ aȱmovementȱ controlȱ systemȱ followingȱvaccinationȱandȱquarantineȱmightȱsuffice.ȱȱȱInȱtermsȱofȱcommitmentȱtoȱDFZs,ȱKenyaȱwillȱneedȱtoȱconsiderȱfactorsȱsuchȱas:ȱ• socialȱexclusionȱȬȱdisplacementsȱandȱexclusionȱofȱtheȱlocalȱpopulationȱ• economicȱconflictsȱȬȱtheȱtouristȱindustry,ȱwildlifeȱandȱinȱparticularȱbuffaloȱ

15 In fact, at the time of writing this paper, it was announced that the GoK has allocated KSh. 3B (US$37,500,000) for the development of the first two DFZs. The first 2 will be Samburu/Laikipia/Isilo Complex and the Coastal Complex (Galana and other organized commercial ranches). 16 Including, the MoLFD policy document which strongly argues for value addition.

12

• epidemiologicalȱfactorsȱ–ȱrelatedȱtoȱwildlifeȱandȱtourismȱe.g.ȱbuffaloȱactingȱasȱaȱȱnaturalȱreservoirȱforȱFMD,ȱ

• financialȱandȱlogisticalȱdifficultiesȱ–ȱwhichȱareȱvariousȱandȱinherentȱinȱtheȱproposedȱDFZȱsystemȱ

• supplyȱ issuesȱ –ȱ suchȱ asȱ anȱ inconsistentȱ supplyȱ ofȱ livestockȱ andȱdependenceȱonȱexternalȱsupplyȱsources,ȱwhichȱcouldȱpotentiallyȱdryȱupȱatȱanyȱtime17ȱ

ȱThisȱcombinationȱofȱcomplexȱfactorsȱindicatesȱthatȱtheȱcreationȱofȱDFZsȱisȱnotȱwarrantedȱinȱtheȱshortȱtoȱmediumȱterm.ȱTraceabilityȱcouldȱalsoȱbeȱaȱchallengeȱforȱ animalsȱ originatingȱ fromȱ neighboringȱ countries.ȱ Theȱ alternativeȱ toȱ thisȱwouldȱ beȱ inȱ upgradingȱ andȱ strengtheningȱ veterinaryȱ servicesȱ andȱ animalȱdiseaseȱsurveillance,ȱreportingȱandȱcontrolȱ Ȭȱkeyȱelements.ȱ ȱTheseȱneedȱtoȱbeȱaddressedȱ inȱ theȱshortȱ toȱmediumȱ termȱwithȱaȱviewȱ toȱperhapsȱestablishingȱDFZsȱ inȱ theȱ longȱrun18.ȱAȱrecentȱstudyȱbyȱGTZȱonȱDFZsȱ (Aiello–Gout,ȱetȱal,ȱ2007),ȱcommissionedȱbyȱAU/IBAR,ȱalsoȱconcursȱwithȱthisȱconclusion.ȱȱȱAccordingȱtoȱtheȱKenyaȱDVS,ȱ ‘Effectiveȱcontrolȱofȱlivestockȱmovementȱisȱtheȱkeyȱ toȱ findingȱ diseaseȬfreeȱ animals19’.ȱ Onȱ theȱ otherȱ hand,ȱ theȱ onȬgoingȱcampaignsȱ forȱ aȱCommodityȱBasedȱCertificationȱ Systemȱ andȱ freedomȱ fromȱFMDȱ throughȱ compartmentalizationȱ areȱ gatheringȱmomentum.ȱTakingȱ intoȱaccountȱ shortagesȱ inȱmeatȱ supplyȱ forecastsȱ inȱ theȱworldȱmarketȱ (Delgado,ȱ2000),ȱitȱmayȱnotȱbeȱtooȱlongȱbeforeȱcountriesȱareȱableȱtoȱexportȱmeatȱproductsȱthroughȱaȱrobustȱveterinaryȱsystemȱthatȱneedȱnotȱnecessarilyȱincludeȱDFZs.ȱȱȱȱȱȱȱTheȱ ADBȬfundedȱ ALLPROȱ projectȱ inȱ Kenyaȱ supportsȱ variousȱ livestockȱmarketingȱrelatedȱactivities:ȱȱ

• rehabilitationȱofȱquarantineȱstations;ȱȱ• installmentȱ ofȱ mobileȱ laboratoriesȱ includingȱ equipmentȱ andȱ

consumables;ȱȱ• procurementȱofȱvaccines;ȱȱ• stakeholdersȱworkshopsȱonȱdiseaseȱcontrolȱandȱdiseaseȱsurveillanceȱinȱ

districts;ȱ• trainingȱofȱmeatȱinspectorsȱandȱCAHWs;ȱȱ• rehabilitationȱofȱmeatȱtrainingȱinstitutes;ȱ

17 There is a commonly-accepted misperception in Kenya that it attracts livestock supplies from Ethiopia because of price differentials. The reality is meat prices are twice as high in Ethiopia compared to Kenya. The domestic market in Ethiopia is supplied largely by highland cattle, due to proximity, to the exclusion of the pastoral areas - the main reason for the flow of trade herds from pastoral areas of Ethiopia to Kenya. However, this trend can change at any time, when and if Ethiopia starts exporting beef, as was the case with shoats. Also note that there are more cattle in the highland areas of Ethiopia than in the pastoral areas 18 The mid-term review of the ADB-financed ALLPRO project states that, ‘The creation of a coastal DFZ is a major challenge and well outside the budgetary scope of ALLPRO’. 19 Personal communication with Dr Peter Ithodenka, head of the DVS in Kenya, 25/02/2008

13

• buildingȱtheȱcapacityȱofȱdiagnosticȱstaff.ȱȱWhileȱ theseȱ initiativesȱareȱcommendable,ȱ itȱshouldȱbeȱnotedȱ thatȱ theȱsystemȱcanȱonlyȱworkȱ inȱ theȱ longȱ runȱ throughȱ theȱ commitmentȱofȱ theȱgovernmentȱandȱallȱstakeholdersȱinȱtheȱpostȱprojectȱphase.ȱForȱexample,ȱtheȱsustainabilityȱofȱ theȱmobileȱ labsȱ isȱalreadyȱ inȱdoubt.ȱAȱ strategyȱhasȱ toȱbeȱputȱ inȱplaceȱ toȱsustainȱtheȱsystemȱinȱtheȱpostȬprojectȱphaseȱthroughȱfullȱcostȱrecoveryȱand/orȱcostȱsharing.ȱȱȱOtherȱpertinentȱissuesȱcontainedȱinȱtheȱKenyaȱMoLFDȱdraftȱpolicyȱdocumentȱincludeȱtheȱfollowing:ȱȱ

• establishingȱtheȱnecessaryȱmechanismsȱtoȱdealȱwithȱemergingȱdiseasesȱ(e.g.ȱavianȱflu)ȱplusȱfires,ȱfloodsȱandȱdrought;ȱȱ

• enlistingȱtheȱprivateȱsectorȱandȱcommunityȱparticipationȱinȱdiseaseȱandȱpestȱcontrolȱandȱsurveillance;ȱȱ

• promotingȱandȱfacilitatingȱcommunityȱandȱprivateȱsectorȱparticipationȱinȱ environmentallyȱ safeȱ vectorȱ andȱ vectorȬborneȱ diseaseȱ controlȱprogrammes;ȱȱ

• devisingȱ necessaryȱ strategiesȱ andȱ initiatingȱ programmesȱ toȱ eradicateȱtsetseȱflies;ȱȱȱ

• measuringȱ diseaseȱ controlȱ measuresȱ forȱ otherȱ livestockȱ speciesȱ inȱadditionȱtoȱcattleȱbyȱharnessingȱpublicȱandȱprivateȱresources;ȱȱ

• separatingȱtheȱmanagementȱandȱcontrolȱofȱveterinaryȱdrugsȱfromȱthatȱofȱ humanȱ drugsȱ forȱ controlȱ andȱ regulationȱ byȱ MoLFD;ȱ enforcingȱexistingȱ regulationsȱ toȱ effectivelyȱ controlȱ theȱmovementȱ ofȱ livestockȱandȱlivestockȱproducts20;ȱ

• upgradingȱtheȱinfrastructureȱofȱtheȱexistingȱlaboratoriesȱ(twoȱnational,ȱsixȱregionalȱlabs)ȱandȱenhancingȱtheirȱcapacityȱbuildingȱtoȱinternationalȱstandards.ȱȱ

ȱ3.2ȱ AnimalȱHealthȱandȱMarketingȱinȱEthiopiaȱȱInȱ Ethiopia,ȱ aȱ newȱ Animalȱ andȱ Plantȱ Healthȱ Regulatoryȱ Directorateȱ(APHRD)21,ȱunderȱtheȱMoARD,ȱhasȱbeenȱmandatedȱtoȱregulate,ȱmonitorȱandȱcontrolȱSPSȱstandardsȱforȱplants,ȱanimalsȱandȱtheirȱderivativesȱatȱtheȱfederalȱlevel.ȱTheȱnewȱ ȱ ȱDirectorateȱwillȱhaveȱtwoȱseparateȱdivisions/departmentsȱtoȱhandleȱanimalsȱandȱplants.ȱTheȱorganizationalȱstructureȱofȱtheȱDirectorateȱ isȱcurrentlyȱ underȱ formation.ȱ Whetherȱ thisȱ structureȱ willȱ beȱ replicatedȱ atȱregionalȱlevelsȱisȱnotȱknownȱyet.ȱRegardless,ȱowingȱtoȱtheȱfederalȱstructureȱofȱtheȱ government,ȱ theȱ regionalȱ veterinaryȱ departmentsȱ remainȱ autonomous,ȱ 20 On the other hand, the ALRMP policy document calls for a review of the livestock movement control rather than reinforcing it. 21 Modeled on the USA system.

14

withȱtheirȱownȱbudgetȱallocationsȱfromȱtheȱrespectiveȱregionalȱgovernments.ȱTheȱ federalȱAPHRDȱmandateȱ extendsȱ onlyȱ toȱTADs,ȱ SPSȱ certificationsȱ andȱmeatȱ inspectionsȱasȱwellȱasȱ coordinatingȱvaccinationȱ campaignsȱ inȱ timesȱofȱdisaster.ȱ Theȱ regionalȱ veterinaryȱ departmentsȱ doȱ notȱ necessarilyȱ reportȱ onȱtheirȱ activitiesȱ toȱ APHRDȱ withȱ theȱ exceptionȱ ofȱ diseaseȱ reportingȱ forȱmonitoringȱpurposesȱandȱonȱotherȱ issuesȱasȱandȱwhenȱ requested.ȱTheȱ looseȱworkingȱrelationshipȱbetweenȱtheȱfederalȱandȱtheȱregionalȱstructuresȱcouldȱbeȱanȱimpedimentȱtoȱsettingȱupȱaȱcredibleȱSPSȱstructure.ȱȱHowever,ȱthereȱisȱhopeȱthatȱ APHRDȱwillȱ comeȱ upȱwithȱ newȱ Actsȱ andȱ Regulationsȱ thatȱ bindȱ theȱfederalȱ andȱ regionalȱ veterinaryȱ systemsȱ toȱ aȱ commonȱ verticalȱ structureȱregardingȱSPSȱstandards,ȱdiseaseȱsurveillance,ȱmonitoringȱandȱreportingȱandȱdiseaseȱcontrolȱsystems.ȱȱMeanwhile,ȱtheȱMoFEDȱfiveȬyearȱplanȱonȱpolicies,ȱstrategiesȱandȱprogrammesȱenvisagesȱanȱambitiousȱgoalȱregardingȱtheȱdevelopmentȱofȱveterinaryȱservicesȱinȱtheȱcountry.ȱTheseȱinclude:ȱ

• strengtheningȱ fieldȱ veterinaryȱ servicesȱ byȱ doublingȱ theȱ numberȱ ofȱveterinaryȱclinicsȱtoȱ3,600ȱalongȱwithȱmobileȱserviceȱdeliveryȱunits;ȱ

• improvingȱ theȱ supplyȱ andȱ qualityȱ ofȱ 16ȱ typesȱ ofȱ vaccinesȱ throughȱsignificantȱexpansion;ȱ

• controllingȱandȱpreventingȱfiveȱeconomicallyȱimportantȱTADS;ȱ• establishingȱȱaȱlivestockȱearlyȱwarningȱsystem;ȱ• Expandingȱbasicȱanimalȱhealthȱserviceȱ trainingȱ fromȱ theȱcurrentȱ levelȱ

ofȱ5%ȱtoȱ50%;ȱ• producingȱ significantȱ dosesȱ forȱ sevenȱ typesȱ ofȱ vaccinesȱ thatȱ areȱ notȱ

producedȱinȱtheȱcountryȱcurrently;ȱ• investigatingȱandȱcontrollingȱnewlyȱemergingȱdiseasesȱ (suchȱasȱavianȱ

flu);ȱ• establishingȱthreeȱDFZs;ȱȱ• investigatingȱandȱcontrollingȱtheȱnewȱcamelȱdisease.ȱȱ

Otherȱ plannedȱ interventionsȱ includeȱ strengtheningȱ theȱ quarantineȱ andȱinspectionȱ serviceȱ withȱ plansȱ toȱ buildȱ eightȱ newȱ quarantineȱ stationsȱ andȱincreasingȱtheȱnumberȱofȱdomesticȱabattoirsȱfromȱtheȱcurrentȱ140ȱtoȱ321.ȱThereȱisȱaȱplanȱ toȱbuildȱoneȱqualityȱcontrolȱ laboratoryȱ forȱanimalȱproductsȱandȱanȱadditionalȱ fiveȱ animalȱ healthȱ postsȱ toȱ enforceȱ controlȱ onȱ animalȱ productȱstandards.ȱ Inȱ addition,ȱ theȱ planȱ envisagesȱ strengtheningȱ diagnosticȱ andȱsurveillanceȱ capacityȱ ofȱ laboratoriesȱ byȱ increasingȱ theȱ numberȱ ofȱ diseasesȱsurveyedȱ toȱ sixȱwithȱaȱ substantialȱ increaseȱ inȱ theȱnumberȱofȱ samplesȱ testedȱperȱannum.ȱCoverageȱofȱdiseaseȱreportingȱrateȱisȱtoȱbeȱincreasedȱtoȱ80ȱpercent.ȱȱȱRegardingȱ humanȱ resourceȱ development,ȱ theȱ fiveȬyearȱ planȱ foreseesȱincreasingȱ theȱ numberȱ ofȱ animalȱ healthȱ professionalsȱ asȱ follows:ȱ animalȱ

15

healthȱassistantsȱtoȱ6,000;ȱmeatȱinspectorsȱtoȱ684;ȱassistantȱmeatȱinspectorsȱtoȱ519;ȱandȱgraduateȱveterinariansȱtoȱ50022.ȱȱȱȱTheȱplanȱprovidesȱlimitedȱinformationȱonȱpublic–privateȱpartnershipsȱandȱorȱtheȱ sustainabilityȱ ofȱ allȱ theseȱ activitiesȱ overȱ theȱ longȱ run.ȱ Thereȱ areȱ alsoȱdoubtsȱ ifȱ adequateȱ resourcesȱ haveȱ beenȱ allocatedȱ (exceptȱ forȱ manpowerȱdevelopment)ȱ toȱ undertakeȱ theȱ tasksȱ outlinedȱ inȱ theȱ fiveȬyearȱ plan.ȱ Itȱ isȱunrealisticȱ toȱ thinkȱ thatȱ theȱproposedȱDFZsȱwillȱbeȱ implementedȱwithinȱ theȱplannedȱfiveȱyears,ȱasȱthereȱareȱnoȱinitiativesȱtoȱdateȱindicatingȱcommitment.ȱWhetherȱthereȱisȱaȱneedȱforȱDFZsȱand,ȱifȱso,ȱtheirȱeventualȱmaterializationȱ isȱhighlyȱ doubtful.ȱ Aȱ pragmaticȱ approachȱ involvingȱ aȱ twoȬphaseȱ quarantineȱsystemȱ(atȱpurchaseȱsitesȱandȱfeedlots)ȱproposedȱbyȱtheȱUSAIDȱfundedȱSPSȬLMMȱprogramȱappearsȱ toȱbeȱmoreȱappropriateȱ forȱ theȱpresentȱstatusȱofȱ theȱcountry.ȱ Thisȱ systemȱ couldȱ beȱ putȱ inȱ practiceȱ onceȱ theȱ costȱ elementsȱ areȱknownȱthroughȱaȱtestȬrun23.ȱȱȱTheȱplannedȱincreaseȱinȱvaccineȱproductionȱ(forȱbothȱnewȱandȱoldȱtypes)ȱcanȱonlyȱ beȱ achievedȱ throughȱ substantialȱ upgradingȱ ofȱ theȱ vaccineȱ productionȱcenterȱ atȱ Debreȱ Zeit.ȱ Jointȱ venturingȱ couldȱ beȱ necessaryȱ forȱ capitalȱinvestment,ȱ technologyȱ transferȱ andȱ marketingȱ purposes.ȱ Someȱ initiativesȱwereȱundertakenȱthroughȱtheȱUSAIDȱfundedȱSPSȬLMMȱprogramȱforȱpossibleȱjointȱ venturingȱ withȱ foreignȱ pharmaceuticalȱ companies.ȱ Theȱ resultsȱ areȱmixed,ȱbutȱnotȱyetȱfinalized.ȱȱȱȱThereȱisȱoneȱnationalȱreferralȱlaboratoryȱandȱthirteenȱregionalȱlaboratoriesȱinȱEthiopia.ȱAȱbaselineȱsurveyȱcarriedȱoutȱonȱtheȱstatusȱofȱtheseȱlaboratoriesȱbyȱSPSȬLMMȱ foundȱ theȱ labsȱ toȱ beȱ reasonablyȱ equipped.ȱ However,ȱ theirȱoperationalȱ capacityȱ isȱ constrainedȱ byȱ aȱ lackȱ ofȱ resourcesȱ resultingȱ inȱ anȱirregularȱ supplyȱ ofȱ consumables,ȱ limitedȱ fieldȱ activitiesȱ andȱ highȱ staffȱturnover.ȱAȱ lackȱofȱ technicalȱ skillsȱhasȱ alsoȱ renderedȱ someȱ equipmentȱ idle.ȱCertainȱtestsȱareȱnotȱbeingȱcarriedȱoutȱdueȱtoȱcapacityȱconstraints.ȱInȱaddition,ȱtheȱ assessmentȱ identifiedȱ weakȱ functionalȱ linkagesȱ betweenȱ theȱ regionalȱlaboratoriesȱ andȱ theȱNationalȱ AnimalȱHealthȱ Diagnosticȱ andȱ InvestigationȱCenter.ȱThroughȱ theȱSPSȬLMMȱprogram,ȱ supportȱwasȱprovidedȱ toȱdecisionȱmakersȱtoȱredirectȱtheȱmandateȱofȱNAHDICȱtoȱlead/assistȱtheȱregionalȱlabsȱinȱtheȱ provisionȱ ofȱ diagnosticȱ services,ȱ theȱ investigationȱ ofȱ diseaseȱ outbreaksȱandȱ theȱ instigationȱ ofȱ systematicȱ surveillanceȱ inȱ anȱ effortȱ toȱ improveȱ theȱnationalȱdiagnosticȱcapacityȱ levels.ȱEssentialȱ labȱconsumablesȱwereȱsuppliedȱtoȱregionalȱlabsȱthroughȱNAHDIC.ȱTrainingȱwasȱprovidedȱtoȱfederalȱstaffȱonȱ

22 Six universities in the country run veterinary faculties and a number of colleges train animal health assistants and meat inspectors. 23 ILRI’s cost-benefit analysis of this system suggests that the system may not be financially feasible (Rich, et al, 2007). But, a test-run is necessary to confirm/reject the findings.

16

Molecularȱ Diagnosticȱ Testsȱ andȱ onȱ HACCPȱ andȱ SPSȱ requirementsȱ forȱMoARDȱ meatȱ inspectorsȱ andȱ exporters.ȱ Supportȱ wasȱ alsoȱ providedȱ toȱNAHDICȱstaffȱforȱdevelopingȱaȱQualityȱSystemsȱManual.ȱHowever,ȱaȱsystemȱhasȱtoȱbeȱputȱinȱplaceȱtoȱsustainȱtheseȱactivitiesȱinȱtheȱpostȬprojectȱphase.ȱȱȱTheȱ existingȱ quarantineȱ stationsȱ inȱ Ethiopiaȱ areȱ smallȱ inȱ sizeȱ andȱwithoutȱadequateȱ facilitiesȱ andȱ someȱ ofȱ theseȱ areȱ inappropriatelyȱ locatedȱ forȱ liveȱanimalȱexportsȱexceptȱforȱmeatȱprocessing.ȱȱThereȱisȱalsoȱaȱplanȱtoȱsetȱupȱtwoȱnewȱ quarantineȱ stationsȱ ofȱ internationalȱ standardȱ toȱ bypassȱ theȱ Djiboutiȱfacilityȱthatȱisȱincreasinglyȱchargingȱexorbitantȱfeesȱtoȱaȱlevelȱthatȱmakesȱliveȱanimalȱexportsȱalmostȱ impossible.ȱTheȱcertificationȱofȱanimalsȱ inȱDjiboutiȱbyȱveterinariansȱhiredȱbyȱ theȱownerȱofȱ theȱquarantineȱ facilityȱalsoȱ contravenesȱtheȱinternationalȱnorm.ȱȱȱTheȱ Djiboutiȱ quarantineȱ facility,ȱ builtȱwithȱ USAIDȱ fundingȱ andȱ originallyȱplannedȱ toȱ beȱ ownedȱ byȱ theȱ regionalȱ livestockȱ traders’ȱ association,ȱ nowȱbelongsȱ toȱaȱprivateȱcompanyȱcalledȱAbuȱYaserȱ International.ȱTheȱcompanyȱhasȱ lobbiedȱforȱallȱanimalsȱfromȱEthiopiaȱtoȱpassȱthroughȱtheȱfacilityȱbutȱ it’sȱcreation,ȱ toȱ someȱ extent,ȱ hasȱ putȱ Ethiopianȱ liveȱ animalȱ exportersȱ atȱ aȱdisadvantageȱasȱitȱcostsȱthemȱanȱaverageȱofȱ$50ȱperȱheadȱtoȱkeepȱcattleȱinȱtheȱfacility.ȱ Ethiopia’sȱ determinationȱ toȱ buildȱ itsȱ ownȱ internationalȱ quarantineȱcenterȱ is,ȱ therefore,ȱ justifiableȱ fromȱ aȱ numberȱ ofȱ points.ȱ Thisȱ moveȱ willȱhopefullyȱresolveȱtheȱpredicamentȱofȱliveȱanimalȱexporters.ȱȱȱComparedȱ toȱ Kenya,ȱ Ethiopia’sȱ Animalȱ Diseaseȱ Controlȱ Proclamationȱ Noȱ267/2002ȱ isȱ limitedȱ toȱ aȱ fewȱ sectionsȱ incorporatingȱ provisionsȱ (legalȱterminologies),ȱ Preventionȱ andȱ Controlȱ ofȱ Animalȱ Diseases,ȱMovementȱ ofȱAnimals24,ȱ Animalȱ Productsȱ andȱ byȬProductsȱ andȱ Registrationȱ ofȱ AnimalȱHealthȱ Professionalsȱ andȱDeliveryȱ ofȱ Services.ȱ ȱ Theȱ proclamationȱ doesȱ notȱcoverȱotherȱpertinentȱissuesȱsuchȱasȱbreeding,ȱaȱbranding/cattleȱidentificationȱsystem,ȱ theȱmovementȱ ofȱ livestockȱ toȱ terminalȱmarketsȱ etc.ȱNoȱ amountȱ ofȱeffortȱwillȱcomeȱ toȱ fruitionȱ inȱ theȱabsenceȱofȱsuchȱcrucialȱActsȱandȱBillsȱandȱmoreȱ importantlyȱ withoutȱ aȱ mechanismȱ toȱ enforceȱ theȱ Actsȱ andȱ Bills.ȱAPHRD,ȱ therefore,ȱ shouldȱ focusȱ onȱworkingȱwithȱ otherȱ stakeholdersȱ (withȱEthiopianȱ Veterinaryȱ Association/ȱ orȱ theȱ emergingȱ Veterinaryȱ Board,ȱEthiopianȱSocietyȱofȱAnimalȱProduction,ȱetc.)ȱtoȱoriginateȱActsȱthatȱareȱcrucialȱforȱenhancingȱveterinaryȱservices,ȱlivestockȱandȱmeatȱtrade25.ȱȱȱ

24 In times of disease outbreak only 25 In realization of these short comings, guidelines and acts covering some of these pertinent issues, but not all, have been drafted by MoARD and sent to parliament for approval.

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3.3ȱ InadequacyȱofȱResourceȱAllocationsȱȱInȱKenya,ȱ theȱ livestockȱ sectorȱ contributesȱaboutȱ10%ȱofȱ theȱentireȱGDPȱandȱaboutȱ 42%ȱ ofȱ theȱ agriculturalȱGDP.ȱ Itȱ accountsȱ forȱ aboutȱ 30%ȱ ofȱmarketedȱagriculturalȱproducts.ȱȱYet,ȱtheȱtotalȱagriculturalȱsectorȱusedȱtoȱreceiveȱ10%ȱofȱtheȱ totalȱgovernmentȱbudgetȱ inȱ theȱ1960s,ȱwasȱreducedȱ toȱ7.5%ȱ inȱ theȱ1980sȱandȱtoȱaȱtriflingȱ3%ȱinȱtheȱ1990s.ȱInȱ2002/03,ȱlivestockȱaccountedȱforȱonlyȱ1%ȱofȱtheȱ proportionȱ (orȱ 0.25%ȱ ofȱ theȱ nationalȱ GDP).ȱ ȱ Inȱ Ethiopia,ȱ theȱ livestockȱsectorȱ contributesȱaboutȱ20%ȱofȱ theȱ totalȱGDP.ȱ Itȱ isȱnotȱpossibleȱ toȱ tallyȱ theȱtotalȱ resourceȱallocationȱ inȱEthiopiaȱasȱ theȱsubȬsectorȱ resourceȱallocationȱ forȱtheȱregionsȱisȱdeterminedȱbyȱtheȱrespectiveȱregionalȱgovernments.ȱȱHowever,ȱcircumstantialȱ evidenceȱ indicatesȱ thatȱ theȱ resourceȱ allocationȱ mayȱ notȱ beȱbetterȱ thanȱ inȱ Kenyaȱ (Tambiȱ andȱ Maina,ȱ 2002).ȱ Theȱ failureȱ ofȱ bothȱgovernmentsȱ inȱallocatingȱproportionallyȱadequateȱresourcesȱforȱsuchȱaȱvitalȱsubȬsectorȱ remainsȱpuzzling.ȱWhatȱ isȱmoreȱworrisomeȱ isȱ thatȱbothȱEthiopiaȱandȱ Kenyaȱ relyȱ onȱ externalȱ fundingȱ (loansȱ orȱ grants)ȱ forȱ revampingȱ orȱupgradingȱtheirȱveterinaryȱservicesȱdespiteȱtheȱrespectiveȱgovernments’ȱwishȱtoȱ exportȱmoreȱ liveȱ animalsȱ andȱmeatȱ inȱ orderȱ toȱ collectȱ exportȱ revenues.ȱWhileȱ theȱ needȱ forȱ externalȱ technicalȱ assistanceȱ isȱ apparent,ȱ runningȱ theȱveterinaryȱ serviceȱ deliveryȱ systemsȱ throughȱ shortȬtermȱ financialȱ grantsȱ orȱloansȱ isȱaȱquestionableȱapproach.ȱDependenceȱonȱexternalȱfundingȱemanatesȱpartlyȱ fromȱ theȱageȬoldȱadherenceȱ toȱrunningȱeverythingȱ throughȱ theȱpublicȱsectorȱand,ȱatȱtheȱsameȱtime,ȱfromȱtheȱnonȬcommittalȱattitudeȱofȱtheȱrespectiveȱgovernmentsȱdueȱtoȱ‘other’ȱpriorities.ȱPublicȬprivateȱpartnershipȱisȱcriticalȱnotȱonlyȱ toȱ relieveȱ theȱ financialȱ burdenȱ onȱ governmentsȱ butȱ alsoȱ toȱ bringȱ inȱefficiencyȱandȱqualityȱserviceȱintoȱtheȱsystem.ȱAtȱtheȱsameȱtime,ȱgovernmentsȱshouldȱknowȱbetterȱthanȱtoȱtryȱtoȱcollectȱlocalȱtaxesȱandȱexportȱrevenuesȱfromȱtheȱsectorȱwithoutȱinvestingȱinȱit.ȱȱȱȱȱȱ4.ȱ INFRASTRUCTUREȱȱInadequateȱinfrastructureȱhasȱbeenȱcitedȱinȱmanyȱpapersȱandȱpresentationsȱasȱcontributingȱ toȱ theȱ inefficiencyȱofȱ livestockȱmarketing.ȱ Inȱ fact,ȱsomeȱ formȱofȱinfrastructureȱdidȱexistȱ inȱbothȱcountriesȱ inȱ theȱpastȱ (holdingȱgrounds,ȱstockȱroutes,ȱwaterȱpoints,ȱquarantineȱstationsȱetc.)ȱmainlyȱdueȱtoȱWorldȱBankȱandȱADBȱ loans.ȱ But,ȱ mostȱ ofȱ theȱ infrastructureȱ isȱ dilapidatedȱ orȱ nonȬexistentȱbecauseȱ noȱ systemȱ wasȱ putȱ inȱ placeȱ toȱ makeȱ themȱ selfȬfinancingȱ forȱmaintenanceȱ orȱ upgrading.ȱ Inȱ someȱ cases,ȱ theirȱ demiseȱ wasȱ causedȱ byȱregionalȱinstabilityȱ(theȱEthioȬSomaliȱwarȱofȱ1977,ȱforȱexample)ȱorȱwasȱdueȱtoȱinternalȱethnicȱconflictsȱorȱcommunitiesȱthatȱdidȱnotȱseeȱanyȱbenefitȱinȱcaringȱforȱthem.ȱȱȱ

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Onceȱagain,ȱbothȱ theȱMoLFDȱandȱALRMPȱpolicyȱpapersȱ inȱKenyaȱ considerȱtheȱ developmentȱ ofȱ infrastructureȱ (roads,ȱ stockȱ routes,ȱ holdingȱ grounds,ȱcommunications)ȱasȱoneȱofȱtheȱpriorityȱareas.ȱObviously,ȱsurfacedȱroadsȱcouldȱincreaseȱ efficiencyȱ whileȱ decreasingȱ transportationȱ costs.ȱ Communicationȱfacilitiesȱ couldȱ simplifyȱ andȱ facilitateȱ transactions.ȱ ȱLivestockȱmarketȱ yardsȱcouldȱgradeȱ stock,ȱmonitorȱvolumeȱofȱ trade,ȱprice,ȱetc.ȱalthoughȱ theyȱ couldȱalsoȱsimplifyȱthingsȱforȱcouncilȱtaxȱcollectors,ȱbringingȱanȱunintendedȱburdenȱtoȱ pastoralists.ȱ Holdingȱ groundsȱ andȱ stockȱ routesȱ areȱ criticalȱ forȱ theȱmovementȱofȱlivestockȱtoȱtheirȱfinalȱdestinationsȱandȱforȱtrackingȱpurposes.ȱInȱKenya,ȱtheȱALLPROȱprojectȱinfrastructuralȱactivitiesȱincludeȱtheȱrehabilitationȱofȱ tenȱ ruralȱmarketsȱ andȱ stockȱ routes,ȱ renovationȱ ofȱ theȱ leatherȱ tanneryȱ atȱKabete,ȱ constructionȱ ofȱ fourȱ slaughterhouses,ȱ rehabilitationȱ ofȱ quarantineȱstationsȱ andȱ theȱMeatȱTrainingȱ Institute.ȱTheseȱ activitiesȱ areȱunderȱ variousȱstagesȱ ofȱ implementationȱ withȱ slightȱ changesȱ inȱ someȱ ofȱ theirȱ activitiesȱfollowingȱ theȱ midȬtermȱ review.ȱ ȱ Howeverȱ usefulȱ theseȱ areȱ forȱ livestockȱdevelopmentȱandȱmarketingȱefficiency,ȱaȱsystemȱshouldȱbeȱdevisedȱtoȱoperateȱthemȱ profitablyȱ orȱ atȱ leastȱ onȱ aȱ costȬrecoveryȱ basisȱ inȱ orderȱ toȱ sustainȱ theȱservicesȱtheyȱprovide.ȱInȱfact,ȱtheȱMoLFDȱpolicyȱdocumentȱrecommendsȱthatȱpartȱofȱtheȱcess26ȱcollectedȱbyȱ localȱcouncilsȱfromȱruralȱmarketsȱshouldȱbeȱsetȱasideȱ forȱmaintenanceȱ andȱ upgradingȱ purposes.ȱ Thisȱ approachȱ shouldȱ beȱextendedȱ toȱ quarantineȱ stations,ȱ holdingȱ grounds,ȱmobileȱ laboratoriesȱ andȱotherȱserviceȱprovidingȱinfrastructureȱfacilities.ȱȱȱInfrastructureȱ developmentȱ inȱ Ethiopiaȱ isȱ plannedȱ andȱ executedȱ byȱ theȱrelevantȱ federalȱ andȱ regionalȱ authoritiesȱ (roads,ȱ telecommunications,ȱwaterȱetc).ȱSuchȱactivitiesȱ takeȱplaceȱasȱpartȱofȱ theȱnationalȱdevelopmentȱplanȱandȱareȱ notȱ specificallyȱ tiedȱ toȱ livestockȱ developmentȱ althoughȱ theȱ subȬsectorȱbenefitsȱfromȱtheȱwholeȱdevelopmentȱprocess.ȱTheȱMoFEDȱfiveȬyearȱplanȱonȱinfrastructureȱ relatedȱ activitiesȱ forȱ theȱ livestockȱ subȬsectorȱ envisagesȱincreasingȱquarantineȱpostsȱfromȱthreeȱtoȱeight27,ȱcheckȱpostsȱfromȱthreeȱtoȱ12ȱandȱdomesticȱabattoirsȱfromȱ140ȱtoȱ321.ȱOneȱhopesȱthatȱthisȱinfrastructureȱwillȱoperateȱprofitablyȱorȱatȱleastȱonȱaȱcostȬrecoveryȱbasis.ȱȱAnotherȱ developmentȱ thatȱ tookȱ placeȱ duringȱ theȱ lastȱ threeȱ yearsȱwasȱ theȱconstructionȱofȱ25ȱmarketȱyardsȱinȱpastoralȱareasȱthroughȱtheȱUSAIDȬfundedȱPLIȱ program.ȱ Althoughȱ theȱ marketȱ yardsȱ includeȱ someȱ facilitiesȱ suchȱ asȱloadingȱrampsȱandȱwateringȱpoints,ȱtheyȱlackȱsomeȱcrucialȱattributesȱsuchȱasȱholdingȱgroundsȱforȱpurchasedȱanimals.ȱItȱseemsȱpossibleȱthatȱbuildingȱfewerȱmarketȱ yardsȱwithȱ completeȱ facilitiesȱ inȱ vibrantȱ secondaryȱmarketsȱmightȱhaveȱ beenȱ moreȱ effectiveȱ thanȱ buildingȱ toȱ theȱ sameȱ standardȱ inȱ lessȱ 26 Local council tax. 27 In view of the decision taken to build two international quarantine centers, the original plan of building three to eight quarantine centers in different locations of the country could be put on hold.

19

important,ȱ andȱ inȱ someȱ cases,ȱ nonȬfunctionalȱ markets.ȱ Moreȱ importantly,ȱinsufficientȱthoughtȱwentȱintoȱplanningȱtheȱmanagementȱofȱtheȱmarketȱyards.ȱThisȱ effectivelyȱ placedȱ themȱ underȱ theȱ ownershipȱ ofȱ theȱ localȱ councils,ȱwithoutȱ provisionȱ toȱ useȱ someȱ ofȱ theȱ revenueȱ forȱ maintainingȱ and/orȱupgradingȱ theȱyards.ȱ ȱThisȱ castsȱdoubtȱaboutȱ theȱ functionalityȱofȱ theȱyardsȱoverȱ aȱ longȱ periodȱ ofȱ timeȱ unlessȱ thisȱ statusȱ isȱ revisedȱ byȱ theȱ concernedȱstakeholders.ȱȱȱTheȱ privatelyȬownedȱ Djiboutiȱ quarantineȱ centerȱ remainsȱ aȱ challengeȱ toȱEthiopiaȱandȱSomalia.ȱOwnedȱbyȱAbuȱYaserȱInternational,ȱ itȱproclaimsȱ itselfȱtoȱ beȱ aȱ regionalȱ quarantineȱ centerȱ coveringȱ suchȱ countriesȱ asȱ Ethiopia,ȱSomaliaȱandȱevenȱKenya,ȱandȱ lobbiesȱactivelyȱ toȱpersuadeȱmajorȱ importingȱcountriesȱ andȱ internationalȱ agenciesȱ thatȱ itȱ isȱ theȱ onlyȱquarantineȱ centerȱ ofȱacceptableȱ standardȱ inȱ theȱ region.ȱ Moreȱ positively,ȱ theȱ facilityȱ mayȱ haveȱtriggeredȱ theȱ settingȱ upȱ ofȱ similarȱ quarantineȱ facilitiesȱ byȱ twoȱ competingȱSaudiȱ companiesȱ inȱ Bosasoȱ andȱ Berbera.ȱ Thisȱmoveȱ hasȱ inȱ turnȱ promptedȱSomaliȱlivestockȱexportersȱtoȱputȱtheirȱownȱquarantineȱfacilitiesȱinȱbothȱportsȱtoȱ counteractȱ theȱ threatȱ posedȱ byȱ theȱ Saudiȱ companiesȱ toȱmonopolizeȱ theȱexportȱ trade.ȱWithȱ Ethiopiaȱ planningȱ toȱ buildȱ twoȱ newȱ quarantineȱ centersȱwithinȱitsȱborders,ȱtheȱregionȱisȱheadingȱforȱaȱfierceȱcompetitionȱinȱpersuadingȱimportersȱthatȱoneȱestablishmentȱfulfillsȱtheȱrequirementsȱbetterȱthanȱanother,ȱandȱ thatȱ theȱprivateȱDjiboutiȱ facilityȱdoesȱnotȱrepresentȱ theȱregion.ȱPerhaps,ȱoneȱunintendedȱeffectȱofȱtheȱDjiboutiȱquarantineȱcenterȱhasȱbeenȱtoȱpersuadeȱEthiopia,ȱ Somalilandȱ andȱ Puntlandȱ toȱ setȱ upȱ theirȱ ownȱ quarantineȱ centersȱwhichȱ shouldȱhaveȱbeenȱ inȱplaceȱaȱ longȱ timeȱago.ȱHowever,ȱ settingȱupȱ theȱquarantineȱ centerȱ inȱ Djiboutiȱ inȱ theȱ firstȱ place,ȱ againstȱ theȱ wishesȱ ofȱ theȱprincipalȱstakeholderȱcountriesȱ (EthiopiaȱandȱSomalia),ȱremainsȱ theȱcauseȱofȱmuchȱofȱ theȱcontroversyȱ thatȱ followed.ȱ Itsȱ likelyȱ impact,ȱ inȱviewȱofȱ theȱnewȱinitiativesȱinȱEthiopia,ȱPuntlandȱandȱSomaliland,ȱremainsȱtoȱbeȱseen.ȱȱȱȱȱ5.ȱ MEATȱEXPORTSȱȱ5.1ȱ IssuesȱinȱKenyaȱȱȱThereȱ areȱ threeȱ exportȬstandardȱ abattoirsȱ inȱKenyaȱ (KMC,ȱ FarmersȱChoiceȱandȱ Hurlingham),ȱ andȱ thereȱ areȱ plansȱ toȱ buildȱ fourȱ moreȱ throughȱ theȱALLPROȱproject,ȱofȱwhichȱtwoȱhaveȱbeenȱtenderedȱforȱGarissaȱandȱIsiolo.ȱTheȱrecentlyȱ refurbishedȱKMC,ȱ theȱoldestȱandȱ theȱ largestȱabattoirȱ inȱKenya,ȱhasȱtheȱcapacityȱtoȱthroughputȱ1,000ȱheadȱofȱcattleȱandȱsomeȱ2,000ȱshoatsȱaȱday.ȱKMC’sȱsupplyȱsourcesȱincludeȱtheȱNortheasternȱandȱNorthernȱprovinces,ȱtheȱsameȱ sourceȱ areasȱ beingȱ targetedȱ byȱ theȱ plannedȱ abattoirsȱ inȱ Garisaȱ andȱIsiolo.ȱȱȱȱ

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KMCȱfacesȱfourȱmajorȱproblemsȱinȱrunningȱitsȱoperation:ȱȱ• erraticȱorȱ seasonallyȱboundȱ suppliesȱ (evenȱbeforeȱ theȱGarissaȱ andȱ Isioloȱ

abattoirsȱbecomeȱoperational),ȱparticularlyȱbetweenȱAugustȱandȱDecemberȱwhenȱthereȱisȱenoughȱpastureȱinȱpastoralȱareas;ȱȱ

• theȱsupplyȱproblemȱisȱexacerbatedȱbyȱsecurityȱproblems,ȱincludingȱrecentȱpostȬelectionȱconflicts;ȱȱ

• aȱ pricingȱ policyȱ basedȱ onȱ grades,ȱ puttingȱ KMCȱ atȱ aȱ disadvantageȱcomparedȱtoȱotherȱlocalȱabattoirs;ȱȱ

• financialȱ limitationsȱdueȱ toȱ excessiveȱ focusȱonȱ rehabilitatingȱ theȱplantȱatȱAthiȱ andȱ itsȱ subsidiaryȱ inȱMombasa,ȱwithoutȱ providingȱ forȱ operationalȱcosts.ȱȱ

ȱAtȱ theȱ timeȱofȱ theȱauthor’sȱvisitȱ inȱMarchȱ2008,ȱKMCȱwasȱslaughteringȱonlyȱ200ȱ headȱ ofȱ cattleȱ perȱ dayȱ andȱ aboutȱ 400ȱ goatsȱ everyȱ twoȱ daysȱ i.e.ȱ itȱwasȱrunningȱatȱonlyȱaroundȱ20%ȱcapacity.ȱȱKMCȱusesȱ fiveȱ typesȱofȱgradesȱ forȱ cattleȱwithȱaȱ fixedȱpriceȱ ceilingȱ forȱ eachȱgrade:ȱȱ• primeȱgradeȱ(15ȱmmȱfat)ȱandȱnotȱmoreȱthanȱ3ȱyearsȱofȱageȱatȱ165ȱKSh/Kgȱ

(USDȱ$ȱ2.05)ȱcarcassȱweight;ȱ• choiceȱgradeȱ(20ȱmmȱfat)ȱatȱ155ȱKSh/Kgȱ(USDȱ$ȱ1.94)ȱcarcassȱweightȱ• fairȱaverageȱquality,ȱnoȱageȱlimit,ȱwithȱgoodȱfatȱcoverȱatȱ142.56KSh/carcassȱ

weightȱ(USDȱ$ȱ1.78);ȱ• standardȱgradeȱatȱ135ȱKsh/Kgȱ (USDȱ$ȱ1.68)ȱcarcassȱweightȱ (mainlyȱ fromȱ

pastoralȱareas);ȱ• commercialȱgradeȱorȱcullȱcowsȱatȱ95ȱKSh/Kgȱ(USDȱ$ȱ1.19)ȱcarcassȱweight;ȱ

someȱ25%ȱofȱtheȱlivestockȱcomingȱfromȱpastoralȱareasȱofȱWajirȱandȱMoyaleȱfallȱintoȱthisȱgroup.ȱ

ȱ ȱKMCȱ effectsȱ paymentsȱ fiveȱ daysȱ afterȱ purchase.ȱ Eachȱ traderȱ isȱ requiredȱ toȱbringȱaȱminimumȱofȱfiveȱanimals;ȱindividualsȱbringȱaȱminimumȱofȱ22ȱanimals;ȱandȱfarmersȱorȱranchersȱaȱminimumȱofȱ40ȱhead.ȱMostȱranchersȱ(suchȱasȱthoseȱinȱLakipia)ȱdoȱnotȱsellȱtoȱKMCȱbecauseȱofȱtheȱlowȱprice.ȱOtherȱranchesȱcloseȱtoȱAthiȱoccasionallyȱsellȱcattleȱtoȱKMCȱatȱaȱpriceȱofȱ70Ȭ85ȱKSh/Kgȱ(USDȱ$ȱ0.87ȱ–ȱ1.05)ȱliveȱweight.ȱȱȱKMC’sȱ majorȱ competitorsȱ areȱ privatelyȬownedȱ abattoirsȱ supplyingȱ theȱsupermarketsȱandȱtheȱbigȱhotels.ȱManyȱofȱtheseȱprivatelyȬownedȱabattoirsȱpayȱimmediatelyȱtoȱtradersȱwhereasȱKMCȱhasȱtoȱfollowȱaȱprocess.ȱKMCȱstatesȱthatȱtheȱpricingȱpolicyȱmustȱchangeȱandȱthatȱtheȱGradeȱActȱneedsȱtoȱbeȱrevisedȱasȱitȱ isȱ notȱ easyȱ forȱ ordinaryȱ Kenyansȱ toȱ attainȱ theȱ gradeȱ underȱ theȱ Act.ȱUnfortunately,ȱ theȱ Boardȱ doesȱ notȱ meetȱ toȱ makeȱ timelyȱ decisionsȱ asȱfrequentlyȱ asȱ theȱmarketȱdynamicsȱ change.ȱMostȱ animalsȱ comingȱ fromȱ theȱ

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NortheastȱandȱMoyaleȱalsoȱ sufferȱ fromȱ theȱpoorȱconditionsȱofȱ theȱ roadȱandȱarriveȱatȱtheȱplantȱinȱbadȱshape.ȱTradersȱalsoȱcomplainȱofȱhighȱtransportȱcostsȱandȱ roadblocksȱ enȱ routeȱ toȱ theȱ Athiȱ plant.ȱ Theȱ meatȱ fromȱ suchȱ areasȱ isȱrejectedȱ inȱsomeȱcases.ȱNonetheless,ȱKMCȱstatesȱthatȱ itȱ isȱcontributingȱtoȱtheȱwelfareȱofȱpastoralists.ȱȱKMC’sȱmainȱmarketȱ isȱNairobi.ȱ Itȱ hasȱ licensedȱ fourȱ franchisesȱ inȱNairobiȱalthoughȱ theyȱ don’tȱ stockȱ theȱ franchisesȱ onȱ aȱ regularȱ basisȱ dueȱ toȱ erraticȱsupplies.ȱȱThisȱhasȱconstrainedȱthemȱfromȱopeningȱsimilarȱfranchisesȱinȱotherȱbigȱcities.ȱKMCȱproducesȱcornedȱbeefȱ forȱ theȱKenyanȱarmyȱ inȱaȱ300ȱgmȱcanȱ(dueȱ toȱshortagesȱofȱ theȱstandardȱ340ȱgmȱcan)ȱatȱaȱpriceȱofȱ115ȱKShȱ (USDȱ$ȱ1.43)ȱperȱcanȱandȱalsoȱsuppliesȱ theȱUgandanȱArmyȱwithȱ190–200ȱgmȱcornedȱbeef.ȱKMCȱplansȱ toȱproduceȱ burgers,ȱ sausagesȱ andȱ oxȱ tongueȱ forȱ theȱ localȱmarket.ȱȱKMCȱexportsȱwholeȱcarcassesȱtoȱDubaiȱatȱaȱpriceȱofȱ165KSh/Kgȱ(USDȱ$2.0628.ȱTheyȱhaveȱalsoȱexportedȱsomeȱbeefȱtoȱSouthȱSudan.ȱNegotiationsȱhaveȱstartedȱwithȱEgypt,ȱandȱMalaysiaȱhasȱagreedȱtoȱimportȱmeatȱbyȱair.ȱKMCȱalsoȱplansȱtoȱexportȱgoatȱcarcassesȱtoȱDubaiȱalthoughȱtheȱtypeȱofȱgoatȱcarcassesȱrequiredȱinȱDubaiȱ(smallȱones)ȱareȱnotȱavailableȱinȱbulk.ȱȱȱSupplyȱproblemsȱandȱworldȱmeatȱmarketȱpricesȱ (unlessȱ theyȱgoȱupȱ sharplyȱdueȱtoȱtheȱglobalȱfoodȱshortage)ȱwillȱaffectȱtheȱperformanceȱofȱKMC.ȱTheȱtwoȱabattoirsȱatȱIsioloȱandȱGarissaȱareȱlikelyȱtoȱaffectȱtheȱsupplyȱofȱcattleȱ(howeverȱseasonal)ȱtoȱKMCȱfromȱMoyaleȱandȱtheȱNortheasternȱprovinceȱleavingȱKMCȱtoȱrelyȱonȱTaita,ȱtheȱTanzanianȱborder,ȱandȱsomeȱranchesȱalongȱtheȱMombasaȱroad,ȱusuallyȱrentedȱbyȱSomalis.ȱCoupledȱwithȱthisȱ isȱtheȱ littleȱorȱnoȱmarginȱKMCȱ isȱ obtainingȱ fromȱ itsȱ exportsȱ toȱDubai.ȱAnȱ FOBȱ priceȱ ofȱKShȱ 165/Kgȱ(USDȱ$2.06)ȱtoȱDubaiȱisȱequivalentȱtoȱwhatȱKMCȱpaysȱforȱprimeȱgradeȱcattleȱlocally,ȱ andȱ thisȱ isȱwithoutȱ addingȱ theȱ overheadȱ costsȱ atȱ theȱ plant.ȱ KMCȱshouldȱ lookȱ intoȱ theȱ feasibilityȱ ofȱmakingȱ aȱ profitȱ byȱ exportingȱmeatȱ cutsȱratherȱ thanȱwholeȱ carcassesȱ andȱ shouldȱ alsoȱ investigateȱ theȱ possibilityȱ ofȱexportingȱmeatȱ toȱMauritius.ȱAsȱ aȱ parastatalȱ agency,ȱKMCȱ isȱ besiegedȱ byȱfinancialȱandȱmanagementȱproblems.ȱȱTheȱprivateȱcompanyȱFarmersȱChoiceȱ isȱmainlyȱ involvedȱ inȱporkȱprocessingȱ(aȱ nonȬpastoralȱ product)ȱ forȱ theȱ localȱ marketȱ withȱ limitedȱ exportsȱ toȱ theȱMiddleȱEastȱ andȱMauritius.ȱTheȱmainȱmarketȱ forȱHurlinghamȱbutcheriesȱ isȱalsoȱtheȱ localȱmarket.ȱThereȱareȱrumorsȱthatȱFarmersȱChoiceȱandȱAlphaȱFineȱFoodsȱ planȱ toȱ buildȱ theirȱ ownȱ abattoirsȱ (theȱ latterȱ isȱ thinkingȱ insteadȱ ofȱ

28 This is less than the meat price in Nairobi.

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rentingȱ theȱ newȱ abattoirsȱ inȱ Garissaȱ andȱ Isiolo)29.ȱWhateverȱ theȱ case,ȱ theȱcompaniesȱshouldȱtakeȱstockȱofȱtheȱsupplyȱsituation,ȱtheȱlocalȱandȱworldȱmeatȱmarketȱ pricesȱ (unlessȱ theyȱ getȱ premiumȱ pricesȱ forȱ ranchȱ animalsȱ aroundȱLakipia)ȱbeforeȱinvestingȱinȱaȱnewȱabattoir.ȱObviously,ȱrentingȱoutȱtheȱGarissaȱandȱ Isioloȱabattoirsȱwouldȱbeȱ theȱbetterȱoptionȱ ratherȱ thanȱ runningȱ themȱasȱgovernmentȱentities.ȱȱȱȱ5.2ȱ IssuesȱinȱEthiopiaȱȱȱThereȱ areȱ someȱnineȱprivatelyȬownedȱ exportȱ abattoirsȱ inȱEthiopia30.ȱFiveȱofȱtheseȱhaveȱbeenȱoperatingȱforȱtheȱlastȱsixȱorȱsevenȱyears,ȱexportingȱaȱweeklyȱaverageȱ ofȱ 150ȱMTȱ ofȱ goatȱ andȱ sheepȱ carcassesȱ toȱ theȱMiddleȱ East.ȱ Theseȱabattoirsȱareȱsmallȱinȱsizeȱwithȱaȱdailyȱthroughputȱcapacityȱofȱbetweenȱ1,500ȱandȱ2000ȱshoats.ȱOneȱorȱtwoȱofȱthemȱalsoȱhaveȱsomeȱcapacityȱforȱslaughteringȱcattleȱ andȱ occasionallyȱ theyȱ exportȱ beefȱ toȱ someȱ Africanȱ countriesȱ byȱ air.ȱTheseȱabattoirsȱalsoȱfaceȱseasonalȱsupplyȱshortages.ȱHighȱtransportȱcostsȱandȱinaccessibilityȱ toȱ someȱ surplusȱ areasȱ inȱ theȱ countryȱ alsoȱ contributeȱ toȱshortagesȱofȱsupplies.ȱȱThereȱ areȱ threeȱ newȱ abattoirsȱ underȱ constructionȱ (oneȱ isȱ nearȱ completion)ȱwithȱcapacitiesȱtoȱslaughterȱbothȱcattleȱandȱshoats,ȱandȱtheyȱincludeȱfacilitiesȱforȱ vacuumȱ packaging.ȱ Oneȱ ofȱ theseȱ anticipatesȱ exportingȱ beefȱ toȱ Dubaiȱshortly.ȱItȱwillȱtakeȱaȱyearȱorȱtwoȱforȱtheȱotherȱtwoȱabattoirsȱtoȱstartȱoperation.ȱȱȱWhetherȱ theseȱabattoirsȱwillȱbeȱcompetitiveȱ toȱexportȱbeefȱcarcassesȱremainsȱtoȱ beȱ seenȱ givenȱ theȱ everȬescalatingȱ priceȱ ofȱmeatȱ inȱ theȱ localȱmarket.ȱ InȱAddis,ȱtheȱpriceȱofȱmeatȱvariesȱbetweenȱ$4/kgȱandȱ$6/kg,ȱwhichȱ isȱfarȱaboveȱtheȱ worldȱ marketȱ priceȱ andȱ isȱ likelyȱ toȱ impactȱ theȱ performanceȱ ofȱ theseȱabattoirs.ȱWhetherȱthisȱpriceȱhikeȱisȱdueȱtoȱsupplyȱshortagesȱorȱisȱtheȱresultȱofȱaȱcartelȬtypeȱcontrolȱneedsȱ toȱbeȱassessedȱ inȱviewȱofȱ theȱabundantȱ livestockȱresourcesȱ inȱ theȱcountry.ȱMeanwhile,ȱ theȱabattoirsȱmayȱbenefitȱbyȱswitchingȱtoȱ seaȱ freightȱ (forȱ vacuumȱ packedȱ meat)ȱ givenȱ theyȱ meetȱ theȱ stringentȱlogisticalȱrequirements.ȱOnȱtheȱotherȱhand,ȱtheȱcurrentlyȱoperationalȱabattoirsȱ(plusȱ theȱ onesȱ underȱ construction)ȱ areȱ capableȱ ofȱ cateringȱ forȱ theȱ currentȱvolumeȱofȱlivestockȱsuppliesȱexceptȱinȱtheȱEasternȱpartsȱofȱtheȱcountry,ȱwhereȱanȱ abattoirȱ inȱ Jigjigaȱ couldȱ provideȱ aȱmarketȱ forȱ suppliesȱ fromȱ theȱ Somaliȱregion.ȱȱȱ

29 Personal communication with Alpha Fine Foods manager. 30 Excluding the old government-owned four industrial abattoirs sold to the Midroc Group, which are more or less obsolete.

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ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱCarcassesȱforȱexportȱfromȱoneȱofȱtheȱprivateȱabattoirsȱinȱEthiopiaȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ6.ȱȱ LIVEȱANIMALȱEXPORTSȱȱKenyaȱ exportedȱ liveȱ animalsȱ toȱ theȱMiddleȱ Eastȱ inȱ theȱ 1980s31.ȱ However,ȱbeginningȱinȱtheȱ1990’s,ȱitsȱliveȱanimalȱexportȱbusinessȱdeclinedȱsignificantly.ȱAboutȱfiveȱorȱsixȱyearsȱago,ȱsomeȱcamelsȱwereȱexportedȱtoȱEgyptȱandȱrecentȱtrendsȱincludeȱanȱirregularȱexportȱofȱsmallȱnumbersȱofȱcattleȱ(uncastrated)ȱtoȱMauritius32.ȱ ȱ Mauritiusȱ alsoȱ importsȱ beefȱ andȱ lambȱ carcassesȱ fromȱ otherȱsources,ȱ andȱ thisȱ providesȱ anȱ opportunityȱ forȱKenyaȱ toȱ diversifyȱ intoȱ thatȱmeatȱmarketȱasȱwell.ȱȱInȱ relativeȱ terms,ȱ Ethiopiaȱ hasȱ beenȱ exportingȱ largeȱ numbersȱ ofȱ animalsȱ(aboutȱ150,000ȱperȱannum)ȱconsistingȱofȱcamels,ȱcattleȱandȱshoatsȱ toȱYemen,ȱJordan,ȱ Egyptȱ andȱ otherȱ destinationsȱ throughȱDjibouti.ȱ Theȱ officialȱ exportȱfigureȱ isȱ insignificantȱcomparedȱ toȱ theȱvolumeȱofȱ informalȱexportsȱ thatȱ takeȱplaceȱthroughȱcrossȬborderȱtradeȱtoȱSudan,ȱKenya,ȱSomaliaȱandȱDjibouti.33ȱȱInȱ anyȱ case,ȱ theȱ potentialȱ toȱ increaseȱ liveȱ animalȱ exportsȱ fromȱ Ethiopiaȱ orȱKenyaȱisȱconstrainedȱbyȱaȱnumberȱofȱinternalȱweaknessesȱvaryingȱfromȱpoorȱinfrastructureȱ toȱ SPSȱ standardsȱ andȱ theȱ recurrentȱ banȱ imposedȱ byȱ theȱimportingȱ countriesȱofȱ theȱMiddleȱEast.ȱ ȱOnȱ theȱotherȱhand,ȱbothȱ countriesȱneedȱ toȱ realizeȱ that,ȱ forȱ aȱ numberȱ ofȱ reasons,ȱ theirȱ futureȱ potentialȱ liesȱ inȱexpandingȱmeatȱexports.ȱȱFirst,ȱliveȱanimalȱtradeȱisȱbyȱandȱlargeȱlimitedȱtoȱoneȱspeciesȱ–ȱsheepȱ(duringȱtheȱHajȱseason,ȱwhichȱisȱtimeȬbound),ȱandȱtheȱmarketȱpotentialȱ forȱ otherȱ speciesȱ (cattle,ȱ camel,ȱ goats)ȱ isȱ limited.ȱ Second,ȱ theȱ

31 Largely due to the effort of one exporter, Idrisii. 32 About 8,000 head of cattle in 2006/7. 33 The cross-border trade deprives Ethiopia from accessing export revenues – the reason why Ethiopian authorities are not keen on cross-border trade.

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increasinglyȱ stringentȱ SPSȱ requirementsȱ forȱ liveȱ animalȱ exportsȱ goȱ wayȱbeyondȱ theȱ prevailingȱ standardsȱ inȱ Ethiopiaȱ andȱKenyaȱ toȱ accessȱ lucrativeȱmarkets.ȱ Third,ȱ lessȱ stringentȱmeatȱ exportȱ requirementsȱ canȱ beȱmetȱ easilyȱwithȱ theȱaddedȱbenefitsȱofȱvalueȱaddingȱandȱemploymentȱcreation.ȱThereȱ isȱalsoȱ aȱ remoteȱ possibilityȱ ofȱ enteringȱ intoȱ lucrativeȱ exportȱmarketsȱ asȱ andȱwhenȱ theȱ ‘commodityȬbasedȱ certificationȱ system’ȱ isȱ ratifiedȱ byȱ theȱ OIEȱsometimeȱ inȱ theȱ future.ȱTheȱbottomȱ lineȱ isȱ thatȱ althoughȱ theȱ exportȱ ofȱ liveȱanimalsȱcanȱbeȱcontinuedȱasȱtheȱsituationȱpermits,ȱtheȱstrategicȱfocusȱshouldȱbeȱ onȱ expandingȱ meatȱ exports,ȱ notwithstandingȱ theȱ prevailingȱ logisticalȱdifficultiesȱandȱSPSȱstandards,ȱforȱbetterȱeconomicȱandȱfinancialȱreturns.ȱȱȱ

ȱȱ ȱ KenyanȱbullsȱinȱaȱfeedlotȱinȱMauritius,ȱmainlyȱfedȱonȱbaggasȱȱ7.ȱȱ MARKETȱSTRATIFICATIONȱȱKenya’sȱmarketȱstratificationȱsystemȱisȱlargelyȱranchȬbased.ȱAccordingȱtoȱtheȱRangeȱManagementȱDivisionȱofȱtheȱMoARD,ȱthereȱwereȱ454ȱranchesȱinȱKenyaȱasȱofȱDecemberȱ2000.ȱȱOfȱthese:ȱȱ

• 321ȱwereȱgroupȱranches;ȱȱ• 84ȱwereȱprivateȱcompanyȱranches;ȱȱ• 27ȱwereȱdistrictȱagriculturalȱcompanyȱranches;ȱȱ• 17ȱwereȱcooperativeȱranches;ȱȱ• whileȱ threeȱ andȱ twoȱ wereȱ Agriculturalȱ Developmentȱ Corporationȱ

(ADC)ȱandȱPublicȱCompanyȱranchesȱrespectively.ȱȱȱOfȱtheȱabove,ȱinȱ2000:ȱ

• 77ȱwereȱdormant;ȱȱ• 84ȱwereȱoperational;ȱȱ• 2ȱwereȱnewlyȱproposed;ȱȱ• 106ȱwereȱsubȬdivided;ȱȱ• 109ȱwereȱtoȱbeȱsubȬdivided;ȱ

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• 76ȱwereȱofȱunidentifiedȱstatus.ȱȱ

Mostȱofȱ theȱsubȬdividedȱranchesȱbelongȱ toȱ theȱcategoryȱofȱgroupȱranches.ȱAȱgoodȱ proportionȱ ofȱ companyȱ andȱ cooperativeȱ ranchesȱ areȱ stillȱ functionalȱalbeitȱwithȱvaryingȱdegreesȱofȱsuccess.ȱManyȱofȱtheȱcompanyȱandȱsomeȱofȱtheȱcooperativeȱ ranchesȱ haveȱ diversifiedȱ intoȱ ecoȬtourismȱ asȱ well.ȱ Companyȱranchesȱuse,ȱownȱorȱpurchaseȱstocksȱfromȱpastoralȱareasȱforȱvalueȱaddingȱandȱusuallyȱsellȱ theȱanimalsȱ toȱhighȬendȱ localȱmarketsȱ (highȱclassȱbutcheries,ȱbigȱhotelsȱ etc.).ȱ Cooperativeȱ ranchesȱ usuallyȱ rentȱ outȱ theȱ ranchesȱ toȱ livestockȱtradersȱ(mainlyȱSomalis)ȱwhoȱmoveȱinȱimmatureȱmaleȱanimalsȱatȱ120–150ȱkgȱliveȱweightȱandȱfinishȱthemȱatȱaboutȱ300ȱtoȱ320ȱKgȱliveȱweightȱinȱaȱperiodȱofȱsomeȱ sixȱ months.ȱ Theseȱ tradersȱ grazeȱ theirȱ animalsȱ onȱ freeȱ rangeȱ inȱ theȱranchesȱwhileȱcompanyȱ ranchesȱandȱdairyȱ farmersȱ relyȱonȱconcentratesȱandȱotherȱfeedȱformulae.ȱȱFeedlotȱoperationsȱareȱrareȱinȱKenya.ȱȱByȱ contrast,ȱmarketȱ stratificationȱ inȱEthiopiaȱ isȱ largelyȱ feedlotȬbased.ȱThereȱareȱ someȱ 200ȱ feedlotsȱ scatteredȱwithinȱ aȱ radiusȱ ofȱ 250ȱ kmȱ ofȱAddisȱwhichȱmanageȱbetweenȱ100ȱandȱ500ȱheadȱofȱcattleȱatȱaȱgivenȱtime.ȱFeedlotȱoperatorsȱsourceȱ cattleȱmainlyȱ fromȱpastoralȱ areasȱ andȱ feedȱ themȱonȱ concentrateȱ andȱroughageȱ forȱaȱperiodȱofȱ threeȱ toȱ fourȱmonths,ȱrecordingȱanȱaverageȱweightȱgainȱofȱ1ȱKgȱorȱmoreȱperȱday.ȱFinishedȱanimalsȱareȱsoldȱlargelyȱtoȱliveȱanimalȱexportersȱandȱinȱsomeȱcasesȱtoȱhighȬendȱlocalȱmarkets.ȱQuiteȱrecently,ȱfeedlotȱoperatorsȱbecameȱinvolvedȱinȱcommercialȱdeȬstockingȱinȱtimesȱofȱdroughtȱinȱpastoralȱ areas,ȱ attractedȱ byȱ theȱ highȱ profitȱmarginsȱ thatȱ canȱ beȱmadeȱ inȱ aȱrelativelyȱ shortȱ timeȱ byȱ feedingȱ droughtȱ strickenȱ animals.ȱ PLIȱ playedȱ aȱpivotalȱ roleȱ inȱ initiatingȱ thisȱ approachȱ whichȱ isȱ nowȱ endorsedȱ byȱ theȱgovernmentȱ (Abebeȱ etȱ al.,ȱ2008).ȱ ȱUnlikeȱKenya,ȱEthiopiaȱhasȱ fewerȱ ranchesȱthatȱremainȱdormant.ȱSomeȱofȱtheseȱareȱsubȬdividedȱforȱotherȱuses.ȱȱȱEscalatingȱ feedȱ costs,ȱ inȱ viewȱ ofȱ risingȱ fuelȱ andȱ grainȱprices,ȱ remainȱmajorȱimpedimentsȱ toȱvalueȱ addingȱ forȱ livestock.ȱ InȱEthiopia,ȱ theȱ averageȱ costȱofȱfeedȱ(fatteningȱration)ȱhasȱrisenȱfromȱBirrȱ8ȱtoȱBirrȱ20/dayȱ(USDȱ$0.93ȱ–ȱ2.08)ȱperȱheadȱinȱtheȱfeedlots,ȱandȱtransportȱcostsȱfromȱCentralȱEthiopiaȱtoȱMoyaleȱhaveȱrecentlyȱexceededȱactualȱfeedȱcostsȱbyȱsomeȱ45%.ȱȱAȱstudyȱonȱlivestockȱfeedȱ alsoȱ showsȱ thatȱ 80%ȱ ofȱ theȱ traditionalȱ feedȱ providedȱ toȱ cattleȱ atȱ theȱsmallholderȱ levelȱ (inȱ farmingȱ communities)ȱ isȱ usedȱ forȱ bodyȱmaintenanceȱonlyȱ (Tolera,ȱ2007).ȱ InȱKenya,ȱ theȱMoARDȱ estimatesȱ thatȱbetweenȱ60%ȱandȱ80%ȱ ofȱ theȱ costsȱ associatedȱwithȱ animalȱ productionȱ goȱ toȱ theȱ purchaseȱ ofȱfeeds.ȱȱȱȱȱȱMostȱofȱ theȱprocessedȱ feedȱ typesȱ inȱKenyaȱandȱEthiopiaȱdependȱ largelyȱonȱfoodȱ cropȱ grainsȱ andȱ residuesȱ thatȱ areȱ primarilyȱ producedȱ forȱ humanȱconsumption,ȱtherebyȱresultingȱinȱincreasesȱinȱfeedȱpricesȱasȱfoodȱpricesȱrise.ȱ

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Theȱ absenceȱ ofȱ largeȬscaleȱ fodderȱproduction,ȱdespiteȱ theȱpotentialȱ inȱ bothȱcountriesȱ (throughȱ irrigationȱ schemes,ȱ forȱ example),ȱ hasȱ contributedȱ toȱ theȱperpetualȱdependencyȱonȱfoodȱcropsȱforȱlivestockȱuse.ȱInȱaddition,ȱtheȱexportȱofȱoilȱcropsȱ(particularlyȱfromȱEthiopia)ȱandȱtheȱuseȱofȱcropȱresiduesȱforȱotherȱpurposesȱ(forȱconstructionȱofȱhuts,ȱfencesȱetc)ȱhindersȱtheȱfullȱexploitationȱofȱavailableȱ resourcesȱ atȱ hand.ȱ Theȱ problemȱ isȱ compoundedȱ byȱ shrinkageȱ ofȱcommunalȱgrazingȱareasȱ inȱmixedȱ farmingȱsystemsȱandȱ theȱ lackȱofȱ traditionȱbyȱsmallholdersȱtoȱgrowȱfodderȱalongsideȱfoodȱcrops.ȱȱȱUnderȱ theȱ currentȱmodeȱ ofȱ production,ȱ livestockȱ cannotȱ easilyȱ beȱ fattenedȱpastoralȱ areas,ȱ atȱ leastȱ toȱ aȱ levelȱ requiredȱ byȱ someȱ highȬendȱ markets.ȱHowever,ȱriverineȱareasȱalongȱtheȱTana,ȱDawa,ȱGanale,ȱShebelle,ȱAwashȱandȱOmoȱRiversȱareȱcapableȱofȱsupportingȱirrigatedȱfodderȱproductionȱnotȱonlyȱtoȱenhanceȱfeedȱavailabilityȱbutȱalsoȱtoȱencourageȱaȱmoreȱextensiveȱshiftȱtowardsȱmarketȱ orientation.ȱ Becauseȱ supplementaryȱ orȱ alternativeȱ typesȱ ofȱ feedȱ(exceptȱ naturalȱ pasture)ȱ areȱ notȱ availableȱ inȱ pastoralȱ areas,ȱ NGOsȱ haveȱincreasinglyȱbegunȱ toȱ transportȱ feedȱ (hayȱbales,ȱ concentrates,ȱpelletsȱ etc)ȱ toȱpastoralȱ areasȱ toȱ saveȱ coreȱ breedingȱ herdsȱ inȱ timesȱ ofȱ drought.ȱ Suchȱinterventionsȱhave,ȱinadvertently,ȱexposedȱpastoralistsȱtoȱalternativeȱtypesȱofȱfeedsȱotherȱthanȱnaturalȱpastureȱandȱmanyȱhaveȱbeenȱnotedȱasȱwillingȱtoȱbuyȱsuchȱ feeds—ȱ atȱ leastȱ inȱ timesȱ ofȱ droughtȱ (Bekeleȱ andȱ Tsehay,ȱ 2008).ȱ Thisȱexposureȱmayȱultimatelyȱleadȱthemȱtoȱprovidingȱsupplementaryȱfeedsȱtoȱtheirȱlivestockȱevenȱinȱnormalȱtimesȱcreatingȱtheȱpossibilityȱthatȱtheyȱmay,ȱinȱtime,ȱswitchȱtoȱaȱmoreȱmarketȱdrivenȱmodeȱofȱproduction.ȱȱȱGivenȱ theȱ currentȱ statusȱ ofȱ feedȱ availability,ȱvalueȱ addingȱmayȱnotȱbeȱ thatȱfeasibleȱ inȱ pastoralȱ areasȱ inȱ theȱ shortȬterm.ȱ However,ȱ thereȱ isȱ aȱ greatȱopportunityȱ forȱ stratificationȱ whereinȱ immaturesȱ orȱ youngȱ steersȱ fromȱpastoralȱareasȱcouldȱbeȱfinishedȱbyȱsmallȱfarmersȱinȱhighȱpotentialȱareas.ȱThisȱcouldȱbeȱdoneȱthroughȱstallȱfeeding/zeroȱgrazingȱonlyȱorȱinȱcombinationȱwithȱnaturalȱ grazingȱ whereȱ theȱ situationȱ permits34.ȱ Smallȱ farmersȱ inȱ bothȱ theȱhighlandsȱofȱHarargheȱandȱWolaytaȱinȱEthiopiaȱandȱinȱtheȱCentralȱhighlandsȱofȱKenyaȱareȱusedȱ toȱ thisȱpractice.ȱFinancialȱconstraintsȱ limitȱ theȱnumberȱofȱimmaturesȱ and/orȱ theȱ amountȱ ofȱ supplementaryȱ feedȱ thatȱ theyȱ canȱ buy.ȱTherefore,ȱ theyȱoperateȱunderȱ limitedȱ capacity,ȱ inȱmostȱ casesȱhandlingȱoneȱheadȱofȱcattleȱatȱaȱtime.ȱComplementingȱtheȱincomeȱofȱsmallȱfarmersȱthroughȱlivestockȱvalueȱaddingȱwhileȱprovidingȱmarketȱopportunitiesȱforȱpastoralistsȱ(throughȱ theȱ purchaseȱ ofȱ steers)ȱ couldȱ contributeȱ immenselyȱ toȱ povertyȱalleviationȱgoals.ȱManyȱsmallȱfarmersȱinȱEthiopiaȱwereȱbeneficiariesȱofȱsuchȱaȱschemeȱ underȱ theȱ Thirdȱ Livestockȱ Developmentȱ Projectȱ whereȱ steersȱ

34 Potential feed sources in smallholder areas include grain stalks, cane tops, sweet potato and other root crop vines, vegetables, alfalfa and fodder beet (if cultivated) in addition to supplementary feed.

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purchasedȱfromȱ lowlandȱareasȱwereȱdistributedȱonȱ loanȱtoȱhighlandȱfarmersȱforȱfinishing.ȱTheȱloanȱandȱtheȱinterestȱwereȱrepaidȱtoȱtheȱprojectȱuponȱsellingȱtheȱ finishedȱ animals35.ȱUnfortunately,ȱ theȱprogrammeȱwasȱphasedȱoutȱwithȱtheȱprojectȱdespiteȱtheȱsuccessȱofȱtheȱscheme.ȱȱȱȱȱ

ȱȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱFarmerȱtakingȱstallȱfedȱbullsȱtoȱmarketȱinȱWesternȱEthiopiaȱȱȱTheȱsignificanceȱofȱdevelopingȱtheȱfeedsȱindustryȱcanȱnotȱbeȱoverȬemphasizedȱinȱ lightȱ ofȱ theȱ recentȱ driveȱ toȱmaximizeȱ returnsȱ fromȱ theȱ livestockȱ sectorȱthroughȱexportȱrevenuesȱand/orȱdomesticȱmarketing.ȱGivenȱtheȱgeneticȱmakeȱupȱ ofȱ theȱ livestockȱ speciesȱ foundȱ inȱ bothȱ countries,ȱ notedȱ forȱ enduringȱhardshipȱbutȱnotȱforȱproductivity,ȱcompetingȱinȱinternationalȱmarketsȱwithoutȱadequateȱfeedȱandȱhealthȱprovisionsȱisȱnotȱlikelyȱtoȱpayȱoff.ȱNotȱsurprisingly,ȱtheȱ authoritiesȱ inȱ bothȱ countriesȱ understandȱ theȱ limitationsȱ imposedȱ onȱlivestockȱproductivityȱarisingȱfromȱfeedȱshortagesȱandȱrisingȱcosts.ȱȱȱȱȱTheȱKenyanȱpolicyȱdocumentȱgoesȱintoȱsomeȱdetailȱinȱassessingȱtheȱsituationȱofȱfeedȱquality,ȱavailabilityȱandȱaffordabilityȱinȱtheȱcountry.ȱȱItȱstatesȱthatȱ‘theȱgreatestȱproportionȱofȱdietȱforȱruminantsȱisȱroughagesȱthatȱincludesȱgrassȱandȱbrowse…withȱminimalȱsupplementationȱofȱconcentratesȱandȱmineralsȱinȱlowȱrainfallȱ areas,ȱ whereȱ extensiveȱ livestockȱ keepingȱ isȱ practiced,ȱ whereasȱconcentratesȱmakeȱaȱsignificantȱproportionȱofȱtheȱlivestockȱdietȱinȱhighȱrainfallȱareas.’ȱ ȱ Itȱ acknowledgesȱ thatȱ feedȱ qualityȱ andȱ quantityȱ isȱ affectedȱ byȱ theȱ‘seasonalityȱofȱ rawȱmaterialȱ suppliesȱ (maize,ȱwheat,ȱbarley,ȱmillet,ȱ legumesȱetc.)ȱ coupledȱwithȱ anȱ inconsistentȱ supplyȱ ofȱ importedȱ ingredientsȱ suchȱ asȱoilseedȱcakes,ȱmealsȱandȱmineralsȱplusȱsubȬstandardȱprocessing,ȱhandlingȱandȱ

35 The ‘stalker-feeder’ programme, as it was known then, provided steers on loan to thousands of small farmers in the then Sidamo, Bale and Hararghe provinces for finishing. Farmers were insured for cattle deaths occurring due to causes beyond their control, which had to be substantiated.

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storageȱofȱmixedȱfeeds’.ȱTheȱhighȱcostȱofȱingredients,ȱlackȱofȱstandardizationȱandȱpoorȱtrainingȱofȱfeedȱmanufacturersȱalsoȱcontributesȱtoȱtheȱlowȱqualityȱofȱfeed.ȱ Itȱ isȱreportedȱ thatȱ ‘Napierȱgrass,ȱ theȱ fodderȱcropȱofȱchoiceȱ inȱhighȱandȱmediumȱ potentialȱ areas,ȱ isȱ threatenedȱ withȱ Napierȱ Smutȱ andȱ Napierȱstunting’.ȱȱȱTheȱMoLFDȱpolicyȱdocumentȱaimsȱatȱ improvingȱ feedȱquality,ȱquantityȱandȱavailabilityȱthroughȱaȱseriesȱofȱmeasures.ȱTheseȱinclude:ȱ

• diversificationȱofȱtheȱfeedȱbaseȱthroughȱtheȱuseȱofȱalternativeȱsourcesȱofȱbothȱenergyȱandȱproteinȱrequirements;ȱȱ

• encouragingȱcooperativesȱandȱsimilarȱsocietiesȱtoȱestablishȱfeedȱmills;ȱȱ• takingȱ theȱ necessaryȱ measuresȱ toȱ standardizeȱ feedȱ ingredientsȱ andȱ

feedsȱforȱallȱclassesȱofȱlivestock;ȱȱ• puttingȱ inȱ placeȱ theȱ necessaryȱ institutionalȱ frameworkȱ toȱ ensureȱ theȱ

productionȱ andȱmarketingȱ ofȱ qualityȱ feedsȱ throughȱ aȱ reviewȱ ofȱ theȱexistingȱFertilizerȱ andȱAnimalȱFoodstuffsȱActȱ toȱ allowȱ forȱ aȱ separateȱAnimalȱFoodstuffsȱAct;ȱȱ

• establishingȱ anȱ Animalȱ Feedȱ Inspectorateȱ Serviceȱ toȱ ensureȱ thatȱstandardsȱ areȱmetȱandȱ toȱ safeguardȱ consumersȱ fromȱhazardous/poorȱqualityȱfeeds;ȱȱ

• identifyingȱ aȱwideȱ rangeȱ ofȱ forageȱ typesȱ forȱ variousȱ agroȬecologicalȱzones;ȱand,ȱ

• fodderȱ andȱ pastureȱ conservationȱ inȱ theȱ rangelandsȱ includingȱpromotingȱ soundȱ rangeȱ managementȱ practicesȱ withȱ ASALȱcommunities.ȱȱȱȱ

ȱTheȱ Ethiopianȱ fiveȬyearȱ planȱ foreseesȱ increasedȱ forageȱ productionȱ throughȱtheȱ distributionȱ ofȱ seeds,ȱ forageȱ plantsȱ andȱ cuts,ȱ improvementȱ ofȱ naturalȱpastureȱ throughȱ bushȱ clearing,ȱ constructionȱ ofȱmolassesȱdepotsȱ inȱ strategicȱlocationsȱ andȱ theȱ establishmentȱ ofȱ forageȱ banks.ȱ Asȱ aȱ fiveȬyearȱ plan,ȱ theȱdocumentȱdoesȱnotȱ giveȱ aȱdetailedȱ assessmentȱ ofȱ theȱ currentȱ shortcomingsȱaffectingȱfeedȱquality,ȱavailabilityȱandȱaffordability.ȱMoreȱimportantly,ȱitȱdoesȱnotȱ addressȱ issuesȱ relatedȱ toȱ institutionalȱ frameworkȱ asȱ regardsȱstandardization,ȱ qualityȱ controlȱ andȱ inspections,ȱ perhaps,ȱ thisȱ beingȱ theȱmandateȱofȱMoARD.ȱȱȱHowever,ȱ aȱ comprehensiveȱ assessmentȱwasȱmadeȱ byȱ theȱ Texasȱ SPSȬLMMȱprogramȱregardingȱfeedȱquality,ȱquantityȱandȱavailabilityȱinȱEthiopiaȱ(Tolera,ȱ2007).ȱTheȱ assessmentȱ findingsȱ areȱ similarȱ toȱ thoseȱ ofȱKenyaȱ –ȱ suchȱ asȱ theȱseasonalityȱofȱsupplies,ȱhighȱcostȱofȱrawȱmaterials,ȱtheȱuseȱofȱnaturalȱpastureȱinȱ traditionalȱ productionȱ systemsȱ andȱmoreȱ useȱ ofȱ concentratesȱ inȱ feedlotsȱandȱ highȱ potentialȱ areas.ȱ Specificȱ factorsȱ contributingȱ toȱ feedȱ supplyȱshortagesȱinȱEthiopiaȱincludeȱtheȱexportȱofȱoilȱcropsȱ(withoutȱvalueȱaddingȱ–ȱ

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reducingȱaȱhugeȱpotentialȱtoȱproduceȱoilȱseedȱcakes)ȱandȱlivestockȱfeedȱ(whichȱhasȱ beenȱ recentlyȱ banned).ȱ ȱ Meanwhile,ȱ theȱ SPSȬLMMȱ programȱ hasȱformulatedȱ aȱ costȬeffectiveȱ rationȱ systemȱ forȱ feedlots.ȱ Onȱ theȱ otherȱ hand,ȱEthiopiaȱ needsȱ toȱ learnȱ fromȱ Kenyaȱ whenȱ settingȱ upȱ theȱ institutionalȱframeworkȱ thatȱ promotes,ȱ guidesȱ andȱ regulatesȱ theȱ feedȱ industry.ȱ Inȱconclusion,ȱbothȱcountriesȱneedȱ toȱattractȱandȱsupportȱpotentialȱ investorsȱ inȱfeedȱproductionȱandȱprocessingȱwhileȱprovidingȱsupportȱtoȱsmallȱholdersȱ toȱproduceȱqualityȱfeed.ȱȱ8.ȱȱ COMMERCIALȱPRODUCTIONȱANDȱBREEDINGȱISSUESȱȱBothȱcountriesȱrelyȱlargelyȱonȱsurplusȱpastoralȱareasȱforȱmeatȱandȱliveȱanimalȱexportsȱ despiteȱ theȱ inherentȱ lowȱ productivityȱ ofȱ livestockȱ breedsȱ foundȱ inȱsuchȱareas.ȱ ȱForȱexample,ȱ itȱusuallyȱ takesȱ fiveȱ toȱsevenȱyearsȱ toȱ reachȱaȱ liveȱweightȱofȱ300–350ȱkgȱ(evenȱforȱtheȱmuchȱcovetedȱBoranȱbull)ȱifȱfedȱonȱnaturalȱpastureȱunderȱnormalȱ conditions.ȱ Ifȱ itȱwereȱnotȱ forȱ theȱpastoralȱproductionȱsystemȱ thatȱ doesȱ notȱ necessarilyȱ takeȱ intoȱ accountȱ theȱ productionȱ costsȱ ofȱlabor,ȱpastureȱandȱwater,ȱ theȱcompetitivenessȱ (profitability)ȱofȱsuchȱanimalsȱ(orȱ theirȱ products)ȱ inȱ internationalȱ marketsȱ wouldȱ becomeȱ questionable.ȱBasically,ȱ bothȱ countriesȱ aimȱ toȱ competeȱ inȱ internationalȱ marketsȱ againstȱsophisticatedȱcommercialȱproducersȱ(ofȱBrazil,ȱArgentinaȱandȱtheȱ like)ȱwhileȱrelyingȱonȱ aȱ subsistentȱproductionȱ systemȱ andȱ cattleȱbreedsȱ thatȱ areȱnotȱ soȱproductive.ȱ Thisȱ isȱ notȱ toȱ understateȱ theȱ specificȱ meritsȱ ofȱ droughtȱ andȱdiseaseȱ toleranceȱ inherentȱ inȱ suchȱ breeds.ȱ Itȱ isȱ ratherȱ toȱ suggestȱ theȱpossibilitiesȱ ofȱ combiningȱ suchȱ meritsȱ withȱ productivity.ȱ Theȱ ‘improvedȱBoran’ȱbull,ȱbredȱ inȱKenyanȱranches,ȱ isȱnotȱcommonȱ inȱ theȱpastoralȱareasȱofȱKenyaȱorȱEthiopiaȱwhereasȱitȱisȱcommonȱinȱAustralianȱandȱTexasȱranches.ȱTheȱ‘Beefȱ Master’ȱ breedȱ introducedȱ fromȱ Texasȱ toȱ Southernȱ Africaȱ closeȱ toȱ aȱhundredȱ yearsȱ agoȱ isȱ alreadyȱ indigenizedȱ andȱ capableȱ ofȱ reachingȱ aȱ liveȱweightȱofȱ700Ȭ800ȱKgȱinȱaȱspaceȱofȱfourȱyearsȱonȱnaturalȱpastureȱalone36.ȱThisȱbreedȱ performsȱwellȱ evenȱ underȱ theȱ harshestȱ conditionsȱ inȱ Botswanaȱ andȱNamibiaȱ andȱprovidesȱmostȱofȱ theȱmeatȱ exportedȱ toȱEurope.ȱ Ifȱ itȱperformsȱwellȱ inȱ aȱ relativelyȱ shorterȱ timeȱ inȱ Botswanaȱ andȱ Namibiaȱ underȱ lessȱfavourableȱconditionsȱ thanȱKenyaȱorȱEthiopia,ȱ thenȱ theȱ introductionȱofȱsuchȱbreedsȱisȱworthȱconsidering.ȱForȱthatȱmatter,ȱtheȱBaggaraȱcattleȱandȱSaharawiȱsheepȱ ofȱWesternȱ Sudanȱ areȱmuchȱmoreȱ productive,ȱ evenȱ underȱ extremeȱconditions,ȱcomparedȱtoȱtheirȱequivalentsȱinȱtheȱHorn.ȱȱȱBasically,ȱtheȱconcernȱforȱgeneticȱconservationȱisȱunderstandable,ȱbutȱitȱmakesȱsenseȱ ifȱ theȱ conservationȱ processȱ isȱ aimedȱ atȱ keepingȱ theȱ desiredȱcharacteristics/traitsȱ ofȱ indigenousȱ animalsȱ whileȱ increasingȱ theirȱ

36 Interview with Botswana ranchers.

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productivity.ȱGeneticȱpreservationȱforȱtheȱsakeȱofȱpreservationȱaloneȱmayȱbeȱimportantȱ forȱmaintainingȱ biodiversityȱ butȱ doesȱ notȱ necessarilyȱ guaranteeȱprofitability.ȱRegardless,ȱ theȱpreservationȱprocessȱ canȱbeȱmaintainedȱ inȱ situȱwithȱtheȱcollaborationȱofȱgovernmentȱandȱcommunities.ȱHowever,ȱthisȱshouldȱnotȱ precludeȱ theȱ importationȱ ofȱ improvedȱ breedsȱ evenȱ forȱ theȱ pastoralȱproductionȱ systemȱ ifȱ theyȱ areȱ capableȱ ofȱ performingȱ underȱ theȱ prevailingȱlocalȱ situations.ȱ Suchȱ breedsȱ canȱ beȱmanagedȱ inȱ isolationȱ toȱ preserveȱ localȱgeneticȱresources.ȱCompetingȱinȱinternationalȱmarketsȱnecessitatesȱimprovingȱoutputsȱ perȱwhateverȱ unitȱ ofȱmeasurementȱ forȱ costȱ effectiveness.ȱ LessonsȱshouldȱbeȱdrawnȱfromȱBotswanaȱandȱNamibia.ȱȱȱOfȱ note,ȱ exportȱ abattoirsȱ areȱ facingȱ supplyȱ shortagesȱ (especiallyȱ ofȱ shoats)ȱfromȱtimeȱtoȱtime.ȱThisȱisȱunderstandable,ȱgivenȱtheȱcurrentȱpastoralȱmodeȱofȱproductionȱwhereȱtheȱmotiveȱforȱsellingȱlivestockȱisȱpromptedȱbyȱimmediateȱcashȱ needsȱ ratherȱ thanȱ profit,ȱ andȱwhereȱ theȱ flowȱ ofȱ livestockȱ toȱ terminalȱabattoirsȱ isȱconstrainedȱbyȱ theȱ lengthyȱprocessȱofȱpurchasing,ȱcollectingȱandȱassemblingȱ livestockȱ fromȱ individuals.ȱ Besidesȱmarketȱ inefficiencyȱ andȱ theȱreluctanceȱofȱherdersȱ toȱsellȱmarketableȱanimalsȱ inȱoneȱgo,ȱsupplyȱ levelsȱareȱaffectedȱ byȱ aȱ highȱ levelȱ ofȱ abortionȱ andȱ mortalityȱ ratesȱ inȱ theȱ pastoralȱproductionȱ system.ȱ Bekele’sȱ (2006)ȱ findingsȱ inȱ theȱ Doloȱ areaȱ (closeȱ toȱ theȱȱManderaȱborderȱonȱ theȱEthiopianȱside)ȱestablishesȱanȱabortionȱrateȱofȱ12.5%ȱforȱcamels,ȱ8.5%ȱforȱcattle,ȱ27%ȱforȱgoatsȱandȱ9%ȱforȱsheep.ȱMortalityȱratesȱforȱtheȱsameȱareaȱwereȱfoundȱtoȱbeȱ12%ȱforȱcamels,ȱ14.5%ȱforȱcattle,ȱ10%ȱforȱgoatsȱandȱ 20%ȱ forȱ sheep.ȱ ȱ Coupledȱwithȱ supplyȱ anomaliesȱ causedȱ byȱ drought,ȱfloods,ȱRVF,ȱ FMDȱ andȱ theȱ likeȱ underȱ theȱ existingȱ productionȱ system,ȱ itȱ isȱperhapsȱ timeȱ toȱ considerȱwaysȱofȱ increasingȱproductivityȱperȱ livestockȱunitȱthroughȱ theȱ importationȱ ofȱ appropriateȱ andȱ adaptableȱ breeds.ȱ However,ȱgivenȱ theȱ lowerȱ diseaseȱ resistanceȱ ofȱ suchȱ breeds,ȱ thereȱ isȱ theȱ needȱ forȱsimultaneousȱstrengtheningȱofȱpreventiveȱandȱclinicalȱservices.ȱAfterȱall,ȱthisȱhasȱbeenȱachieved,ȱ throughȱpublicȱandȱprivateȱveterinaryȱserviceȱproviders,ȱforȱ theȱvibrantȱdairyȱ industryȱ inȱKenya,ȱ consistingȱ ofȱ someȱ 3ȱmillionȱdairyȱanimals.ȱ Extendingȱ similarȱ servicesȱ toȱ pastoralȱ areasȱ shouldȱ thereforeȱ beȱpossibleȱwithȱaȱlittleȱextraȱeffort.ȱȱȱȱTheȱKenyanȱpolicyȱdocumentȱputsȱemphasisȱonȱpreservingȱgeneticȱresourcesȱwhileȱrecognizingȱtheȱfactȱthatȱvaluableȱgenesȱcontainedȱinȱlocalȱbreedsȱhaveȱneitherȱbeenȱ identifiedȱnorȱhaveȱ theirȱcharacteristicsȱbeenȱdocumented.ȱ ȱTheȱdocumentȱ citesȱ pastȱ effortsȱ inȱ whichȱ theȱ focusȱ hasȱ beenȱ onȱ upȬgradingȱindigenousȱ animalsȱ towardsȱ exoticȱwesternȱ breedsȱ resultingȱ inȱ theȱ lossȱ ofȱoriginalȱgeneticȱmaterial,ȱparticularlyȱ inȱ theȱpoultryȱ sector.ȱ ȱAsȱaȱ result,ȱ theȱpolicyȱ objectiveȱ statesȱ thatȱ itȱ isȱ necessaryȱ toȱ formulateȱ superiorȱ breedingȱprogramsȱ forȱ indigenousȱanimals.ȱTheȱMoLFDȱbelievesȱ inȱ theȱnecessityȱofȱaȱregulatoryȱ frameworkȱ forȱ aȱ centrallyȱ managedȱ andȱ coordinatedȱ breedingȱ

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strategy.ȱAtȱ theȱmoment,ȱ decisionsȱ onȱ ‘whatȱ animalsȱ areȱ toȱ parentȱ futureȱanimals’ȱareȱtakenȱbyȱmanyȱactorsȱ(farmers,ȱpastoralists,ȱCBOs,ȱNGOs,ȱBreedȱAssociationsȱ andȱ theȱ government).ȱThisȱ regulatoryȱ frameworkȱwillȱ allowȱ aȱ‘centralȱ organizationȱ toȱ formulateȱ appropriateȱ policyȱ andȱ legalȱ framework,ȱencourageȱothersȱ toȱ investȱ inȱbreedingȱservices,ȱsupportȱ theȱKenyaȱ livestockȱbreedersȱassociations,ȱencourageȱfarmersȱinȱprogenyȱtestingȱandȱserveȱasȱtheȱnationalȱ focalȱpointȱ toȱ coȬordinateȱ animalȱgeneticȱ resources’.ȱHowever,ȱ thisȱstanceȱ onȱ preservingȱ domesticȱ geneticȱ resourcesȱ understatesȱ theȱ immenseȱbenefitsȱ Kenyaȱ gainedȱ asȱ aȱmajorȱ producerȱ ofȱ surplusȱmilkȱ inȱ theȱ regionȱthroughȱtheȱcrossȬbreedingȱofȱdairyȱherds.ȱAȱbalanceȱhasȱtoȱbeȱkeptȱbetweenȱpreservingȱ geneticȱ resourcesȱ andȱ makingȱ economicȱ gainsȱ throughȱ theȱintroductionȱofȱproductiveȱbreeds.ȱEthiopia’sȱbreedingȱprogramȱ isȱ limitedȱtoȱdairyȱherdsȱandȱpoultryȱandȱ theȱpreservationȱofȱBoranȱbreeds.ȱThereȱareȱnoȱindicationsȱwithȱregardȱtoȱimprovingȱbeefȱbreedsȱeitherȱfromȱlocalȱsourcesȱorȱthroughȱimportsȱfromȱabroad.ȱȱ9.ȱ PROVISIONȱOFȱFINANCIALȱSERVICESȱTOȱPASTORALȱAREASȱȱPoorȱ financialȱ services,ȱ includingȱ theȱ provisionȱ ofȱ credit,ȱ areȱ commonlyȱregardedȱasȱaȱmajorȱimpedimentȱbothȱtoȱtheȱdevelopmentȱofȱpastoralȱareasȱinȱgeneralȱandȱlivestockȱmarketingȱinȱparticular.ȱThisȱassertionȱisȱusuallyȱmadeȱonȱtheȱassumptionȱthatȱpastoralȱcommunitiesȱhaveȱnoȱaccessȱtoȱcreditȱorȱotherȱformsȱ ofȱ financialȱ services.ȱ Whileȱ thisȱ remainsȱ aȱ fact,ȱ itȱ isȱ unlikelyȱ thatȱpastoralȱcommunitiesȱ(i.e.ȱfullȱtimeȱherders)ȱareȱkeenȱtoȱaccessȱsuchȱservices.ȱToȱbeginȱwith,ȱpastoralistsȱoperateȱonȱaȱmovingȱcapitalȱbaseȱ (livestock)ȱandȱreturnsȱ fromȱ livestockȱ reproductionȱ areȱ farȱ greaterȱ thanȱ bankȱ interestȱ ratesȱ(exceptȱinȱdroughtȱandȱotherȱhazardousȱtimes).ȱPutȱsimply,ȱitȱdoesȱnotȱmakeȱsenseȱforȱaȱpastoralȱhouseholdȱtoȱsaveȱcashȱinȱaȱbankȱandȱlessȱsoȱtoȱtakeȱaȱloanȱwithȱinterestȱattached.ȱTheȱfactȱthatȱfullȱtimeȱherdersȱrelyȱentirelyȱonȱbrokersȱ(kinsmenȱinȱtowns)ȱevenȱinȱsimpleȱtransactionsȱinvolvingȱtheȱsaleȱofȱanimalsȱindicatesȱ thatȱ theyȱ areȱ notȱ yetȱ readyȱ toȱ useȱ theȱ complicatedȱ servicesȱ ofȱfinancialȱ institutions.ȱTheȱmodeȱofȱ theirȱproductionȱ system,ȱwhichȱ reliesȱonȱmobilityȱ awayȱ fromȱ majorȱ settlementȱ centers,ȱ alsoȱ doesȱ notȱ makeȱ themȱaccessibleȱtoȱuseȱsuchȱservicesȱforȱmostȱpartsȱofȱtheȱyear.ȱȱȱThisȱisȱnotȱtoȱsayȱthatȱcreditȱprovisionȱisȱnotȱatȱallȱnecessaryȱinȱpastoralȱareas.ȱThereȱareȱthoseȱwhoȱcanȱbenefitȱfromȱtheȱprovisionȱofȱsuchȱservices,ȱbutȱtheyȱareȱnotȱnecessarilyȱ fullȱ timeȱherders.ȱMakingȱaȱdistinctionȱbetweenȱ theȱ twoȱgroupsȱisȱnecessaryȱbeforeȱdevisingȱanȱappropriateȱstrategy.ȱThoseȱwhoȱhaveȱmovedȱ outȱ ofȱ pastoralism,ȱ andȱ nowȱ resideȱ inȱ majorȱ settlementsȱ orȱ whoȱrequireȱ alternativeȱ orȱ complementaryȱ livelihoods,ȱ mayȱ requireȱ cashȱprovisionsȱ toȱ setȱ upȱ pettyȱ tradesȱ involvingȱ serviceȱ provisions,ȱ commodityȱtrade,ȱ valueȱ addingȱ orȱ otherȱ incomeȱ generatingȱ activities.ȱWomenȬheadedȱ

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households,ȱunemployedȱyouthȱandȱotherȱspecificȱgroupsȱresidingȱinȱorȱcloseȱtoȱmajorȱsettlementsȱmayȱrequireȱthisȱtypeȱofȱsupport.ȱEvenȱinȱsuchȱcases,ȱtheȱapparentȱdifferencesȱwithinȱandȱbetweenȱdifferentȱpastoralȱareasȱandȱgroupsȱinȱtermsȱofȱbusinessȱopportunitiesȱandȱlocalȱbusinessȱacumenȱshouldȱbeȱtakenȱintoȱaccount.ȱForȱexample,ȱ theȱprospectȱofȱ settingȱupȱviableȱandȱdiversifiedȱsmallȱ businessesȱ isȱ betterȱ inȱ Somaliȱ inhabitedȱ areasȱ than,ȱ forȱ example,ȱ inȱTurkanaȱorȱAfar.ȱȱȱSoȱ far,ȱ creditȱ provisionsȱ inȱ theȱ ASALȱ areasȱ ofȱ bothȱ countriesȱ haveȱ beenȱlimitedȱtoȱsavingsȱandȱcreditȱgroupsȱmainlyȱthroughȱNGOsȱandȱmicroȬcreditȱinstitutionsȱsuchȱasȱKȬREPȱ(whichȱpulledȱoutȱrecentlyȱfromȱNorthernȱKenya).ȱApparently,ȱthereȱexistȱlimitedȱopportunitiesȱforȱsettingȱupȱdiversifiedȱsmallȬscaleȱbusinessesȱ inȱpastoralȱareasȱbecauseȱofȱ lowȱpurchasingȱpower,ȱ limitedȱ‘wants’ȱofȱtheȱpastoralȱpopulationȱthatȱadheresȱtoȱaȱsimpleȱwayȱofȱlifeȱandȱtheȱgeneralȱ lackȱ ofȱ development.ȱ Asȱ aȱ result,ȱ NGOsȱ involvedȱ inȱmicroȬcreditȱprogramsȱdisburseȱ loansȱ forȱ tooȱmanyȱgroupsȱengagedȱ inȱ theȱ sameȱkindȱofȱbusinessȱactivitiesȱwithinȱtheȱsameȱ localityȱorȱmarketȱshed.ȱForȱexample,ȱtooȱmanyȱ livestockȱmarketingȱgroupsȱorȱ cooperativesȱwereȱ formedȱ inȱ theȱ sameȱmarketȱ shedȱ inȱ SouthernȱEthiopiaȱ resultingȱ inȱdiminishedȱprofitȱ levelsȱ andȱcausingȱmanyȱofȱ theseȱgroupsȱ toȱmoveȱoutȱofȱ livestockȱmarketingȱbusinessȱaltogether.ȱPartȱofȱtheȱproblemȱstemsȱfromȱtheȱNGOȱstaffȱhavingȱnoȱbusinessȱskillsȱ themselvesȱ toȱ guideȱ suchȱ groupsȱ andȱ partlyȱ fromȱ tooȱmanyȱ NGOsȱjumpingȱ onȱ theȱ bandȱwagonȱwithȱ littleȱ orȱ noȱ cooperationȱ betweenȱ them.ȱBusinessesȱ canȱ onlyȱ beȱ viableȱ ifȱ theyȱ reachȱ aȱ volumeȱ ofȱ transactionȱ thatȱenablesȱthemȱtoȱgenerateȱprofits,ȱregardlessȱofȱtheirȱmarketȱshare.ȱȱWhereȱtheȱbusinessȱvolumeȱisȱhigh,ȱfirmsȱcanȱstayȱinȱbusinessȱevenȱwithȱsmallerȱmarketȱshares.ȱWhereȱtheȱvolumeȱisȱlow,ȱasȱinȱpastoralȱareas,ȱaȱfirmȱneedsȱtoȱcaptureȱaȱhigherȱmarketȱshareȱtoȱstayȱ inȱbusiness.ȱTooȱmanyȱfirmsȱprovidingȱsimilarȱservicesȱ toȱ aȱ limitedȱ numberȱ ofȱ clienteleȱwillȱ notȱ survive.ȱWhereȱ businessȱopportunitiesȱ areȱ limitedȱ forȱ diversification,ȱ lendingȱ institutionsȱ orȱ NGOsȱshouldȱlimitȱtheirȱsupportȱtoȱfewerȱgroupsȱtoȱenableȱthemȱtoȱstayȱinȱbusiness.ȱInȱtheȱend,ȱitȱisȱtheȱnumberȱofȱviableȱbusinessesȱthatȱshouldȱcountȱratherȱthanȱtheȱ numberȱ ofȱ loaneesȱ orȱ businessȱ entitiesȱ toȱ whomȱ loansȱ haveȱ beenȱdisbursed.ȱȱȱWithinȱ pastoralȱ areas,ȱ theȱ groupȱ thatȱ seeksȱ relativelyȱ significantȱ loanȱprovisionȱ isȱ liveȱ animalȱ (andȱ otherȱ majorȱ commodity)ȱ traders.ȱ Withȱ fewȱexceptions,ȱsmallȱandȱbigȬscaleȱliveȱanimalȱtradersȱoperateȱgenerallyȱwithoutȱaccessȱ toȱ creditȱ provisions.ȱ Theȱ trustȬbasedȱ livestockȱ transactionȱ system,ȱcommonȱ inȱ theȱASALȱ regionsȱ ofȱ bothȱ countries,ȱ inȱwhichȱ immediateȱ cashȱpaymentȱisȱdeferredȱuntilȱanimalsȱareȱsoldȱinȱterminalȱmarkets,ȱstemsȱmainlyȱfromȱ theȱshortageȱofȱworkingȱcapitalȱalthoughȱ theȱsavvyȱnatureȱofȱ livestockȱtradersȱinȱpassingȱtheȱriskȱtoȱtheȱprimaryȱproducerȱorȱtheȱmiddlemanȱcan’tȱbeȱ

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ruledȱ out.ȱ Inȱ suchȱ aȱ system,ȱ itȱ isȱ theȱ herderȱwhoȱ financesȱ theȱ bigȱ traderȱthroughȱ intermediariesȱwhereȱnoȱ interestȱ isȱ chargedȱ forȱdelayedȱpayments.ȱMoreȱ importantly,ȱ thereȱ areȱ timesȱ whenȱ primaryȱ producersȱ andȱ theȱmiddlemenȱinȱtheȱchainȱfailȱtoȱreceiveȱpaymentsȱbecauseȱtheȱbigȱtradersȱhaveȱgoneȱbankruptȱorȱdefaultedȱforȱanyȱnumberȱofȱreasons.ȱȱȱConventionalȱ banksȱ doȱ notȱ regardȱ livestockȱ asȱ equitableȱ assets.ȱ Thisȱnecessitatesȱ aȱ nonȬconventionalȱ bankingȱ systemȱ forȱ pastoralȱ areasȱ withȱ aȱprovisoȱ forȱ accommodationȱ toȱ thoseȱ requiringȱ relativelyȱ largerȱ amountsȱ ofȱloansȱ(suchȱasȱlivestockȱtraders,ȱfeedlotȱoperators,ȱranchersȱetc).ȱInȱSudan,ȱtheȱ‘Livestockȱ Resourcesȱ Bank’ȱ catersȱ specificallyȱ toȱ livestockȱ tradersȱ andȱexportersȱ byȱ providingȱ themȱ withȱ shortȬtermȱ workingȱ capitalȱ loansȱ onȱ aȱ‘profitȱsharing’ȱbasisȱ–ȱaȱsystemȱthatȱhasȱnotȱbeenȱtriedȱinȱKenyaȱorȱEthiopiaȱbutȱwhichȱcanȱbeȱexplored.ȱȱȱPerhaps,ȱtheȱbiggestȱobstacleȱforȱexpandingȱcreditȱprovisionsȱinȱpastoralȱareasȱisȱ theȱ lackȱofȱcollateral.ȱTheȱ lifestyleȱofȱ theȱpopulationȱresidingȱorȱ tradingȱ inȱpastoralȱsystemsȱdoesȱnotȱprovideȱtheȱkindȱofȱconventionalȱcollateralȱ(suchȱasȱproperties)ȱlendingȱinstitutionsȱareȱusedȱtoȱ(saveȱforȱfewȱexceptionsȱinȱmajorȱsettlementȱ areas).ȱ However,ȱ thisȱ doesȱ notȱ meanȱ thatȱ allȱ trade,ȱ andȱ inȱparticularȱ livestockȱtrade,ȱ isȱtransactedȱonȱstrictlyȱcashȱterms.ȱMostȱ livestockȱtransactionsȱtakeȱplaceȱinȱaȱclanȱorȱkinshipȬbasedȱtrustȱsystem.ȱAsȱisȱtheȱcaseȱwithȱconventionalȱbanks,ȱdefaultsȱalsoȱoccurȱinȱtheȱ‘trustȱlending’ȱsystemȱforȱvariousȱ reasons.ȱ Despiteȱ suchȱ occasionalȱ hiccups,ȱ however,ȱ theȱ systemȱ isȱroutinelyȱpracticedȱwhichȱimpliesȱthatȱtheȱsystemȱfunctionsȱmoreȱorȱlessȱwellȱsinceȱ theȱ kinshipȱ orȱ clanȬbasedȱ guaranteeȱ servesȱ asȱ collateral.ȱ Aȱ properȱunderstandingȱ ofȱ thisȱ systemȱ isȱ criticalȱwhenȱ designingȱ aȱ kinshipȱ orȱ clanȬbasedȱ bankingȱ systemȱ forȱ pastoralȱ areasȱ asȱ anȱ optionȱ toȱ theȱ conventionalȱsystem.ȱȱȱAlternatively,ȱfinancialȱinstitutionsȱthatȱinsistȱonȱconventionalȱcollateralȱcouldȱemployȱ theȱ ‘reverseȱvalueȱchainȱapproach’.ȱThisȱapproachȱentailsȱprovidingȱloansȱtoȱoperatorsȱatȱtheȱhigherȱendȱofȱtheȱvalueȱchainȱ–ȱsuchȱasȱ liveȱanimalȱandȱmeatȱexporters,ȱprocessors,ȱranchers,ȱ feedlotȱoperators,ȱwholesalersȱetc.,ȱwhoȱwouldȱinȱturnȱdisburseȱtheȱloansȱtoȱtheirȱsuppliersȱinȱpastoralȱareas.ȱȱTheȱadvantageȱinȱthisȱsystemȱisȱthatȱborrowersȱatȱthisȱlevelȱofȱtheȱvalueȱchainȱareȱcapableȱofȱprovidingȱtheȱrequiredȱcollateralȱforȱtheȱbanksȱandȱareȱresponsibleȱforȱ theȱ loansȱ theyȱdisburseȱ toȱ theirȱsuppliersȱ (whetherȱonȱkinshipȱorȱpurelyȱbusinessȱ relationships).ȱTheȱdisadvantagesȱ lieȱ inȱ theȱ controlȱ thatȱhighȱvalueȱoperatorsȱcouldȱexertȱonȱsmallȬscaleȱsuppliersȱandȱtheȱpossibilityȱofȱdivertingȱloansȱtoȱbusinessesȱnotȱrelatedȱtoȱpastoralȱareas.ȱThisȱmayȱnecessitateȱhavingȱaȱproperȱ controlȱ mechanismȱ inȱ place.ȱ Regardless,ȱ thisȱ optionȱ isȱ worthȱconsideringȱasȱanȱalternativeȱtoȱtheȱcurrentȱimpasse.ȱȱ

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ȱTheȱCARE–EquityȱBankȱpartnershipȱinȱKenya,ȱinȱthisȱregard,ȱisȱanȱattemptȱtoȱprovideȱ aȱ nonȬconventionalȱ bankingȱ serviceȱ forȱ pastoralȱ areasȱ followingȱwhichȱtheȱlatterȱhasȱsetȱupȱaȱbranchȱofficeȱinȱGarissa.ȱTheȱBankȱprovidesȱthreeȱkindsȱofȱservices:ȱ

• aȱ savingsȱ componentȱ inȱwhichȱ noȱminimumȱ balanceȱ isȱ requiredȱ toȱopenȱanȱaccount,ȱnoȱ limitȱ isȱplacedȱonȱwithdrawalsȱandȱnoȱoverheadȱcostsȱandȱ ledgerȱ feesȱareȱappliedȱ inȱorderȱ toȱencourageȱ theȱcultureȱofȱsavingȱamongȱtheȱpastoralȱpopulation;ȱȱ

• aȱ creditȱ component,ȱ forȱpastoralȱproducerȱgroupsȱ (PPGs)ȱ engagedȱ inȱlivestockȱ fatteningȱ orȱ inȱ anȱ exportȱ businessȱ providesȱ loansȱ toȱ aȱmaximumȱamountȱofȱ5ȱmillionȱ(USDȱ$62,500)ȱatȱaȱ1%ȱcommissionȱperȱmonthȱ (theȱ termȱ commissionȱ isȱ usedȱ toȱ complyȱ withȱ Shariaȱ Law),ȱrepayableȱwithinȱaȱyear.ȱTheȱbankȱ isȱalsoȱexploringȱaȱcombinationȱofȱnonȬconventionalȱ collateralȱ inȱ whichȱ localȱ Sheiksȱ andȱ communityȱleadersȱ couldȱ serveȱ asȱ guarantors,ȱ usingȱ theȱ tradeȱ herdȱ asȱ collateralȱandȱevaluatingȱtheȱcustomer’sȱreputationȱthroughȱwordȱofȱmouthȱandȱotherȱmeans.ȱ ȱKMC’sȱinvoicesȱwillȱalsoȱenableȱPPGsȱtoȱgetȱloansȱfromȱtheȱBank;ȱȱȱ

• theȱ thirdȱ componentȱ ofȱ theȱ serviceȱ isȱ aimedȱ atȱ improvingȱ andȱstrengtheningȱtheȱvalueȱchain,ȱinȱwhichȱCARE,ȱasȱaȱpartner,ȱwillȱplayȱaȱroleȱinȱidentifyingȱPastoralȱProducersȱGroupsȱ(PPGs),ȱtrainingȱthemȱinȱfinancialȱmanagementȱandȱanimalȱhusbandryȱandȱlinkingȱtheȱPPGsȱtoȱtheȱKMCȱandȱotherȱexportersȱthroughȱtheȱKLMC.ȱȱ

ȱTheȱBank’sȱseeminglyȱriskyȱventureȱ isȱcushionedȱbyȱ theȱguaranteeȱprovidedȱbyȱ CAREȱ toȱ counterȱ anyȱ lossesȱ incurred.ȱ Regardless,ȱ thisȱ initiativeȱ couldȱserveȱasȱaȱ ‘lessonȱ learning’ȱexperienceȱ toȱrefineȱmethodologiesȱ inȱ theȱ future,ȱnotȱ onlyȱ inȱKenyaȱ butȱ alsoȱ inȱ Ethiopia.ȱ Theȱ Bankȱ shouldȱ alsoȱ exploreȱ theȱpossibilityȱofȱoperatingȱonȱaȱ‘profitȱsharing’ȱbasisȱasȱMuslimȱcommunitiesȱdoȱnotȱendorseȱ interestȱonȱ loansȱ (evenȱwithȱ theȱeuphemismȱ ‘commission’).ȱOneȱhopesȱthatȱtheȱcreditȱschemeȱalsoȱcoversȱlivestockȱtradersȱinȱadditionȱtoȱPPGs.ȱȱNoȱsimilarȱschemeȱexistsȱ inȱEthiopiaȱforȱpastoralȱareas.ȱAgenciesȱ likeȱVOCAȱhaveȱ beenȱ formingȱ pastoralȱ livestockȱmarketingȱ groupsȱ inȱ someȱ areasȱ butȱwithoutȱ theȱ provisoȱ toȱ supportȱ themȱ financiallyȱ throughȱ creditȱ provision,ȱassumingȱ thatȱ suchȱ cooperativesȱ shouldȱqualifyȱ forȱ loansȱ fromȱmainstreamȱbanks.ȱ Theȱ fewȱ banksȱ thatȱ operateȱ inȱ pastoralȱ areasȱ applyȱ conventionalȱconditionsȱofȱlendingȱand,ȱtherefore,ȱareȱnotȱinȱaȱpositionȱtoȱprovideȱfinancialȱservicesȱ toȱ pastoralȱ marketingȱ groups.ȱ Effortsȱ inȱ theȱ pastȱ includeȱ theȱprovisionȱofȱgrantsȱtoȱpastoralȱ livestockȱmarketingȱgroupsȱbyȱotherȱagenciesȱ(AUȬIBAR,ȱPARIMA)ȱandȱlinkingȱtheseȱgroupsȱwithȱexportersȱ–ȱanȱinitiativeȱthatȱpromptedȱmeatȱ exportersȱ toȱ openȱpurchasingȱ officesȱ inȱpastoralȱ areas.ȱ

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Theȱ initialȱ successȱofȱ theȱpastoralȱmarketingȱgroupsȱwasȱ laterȱcompromisedȱbyȱ theȱ formationȱofȱ additionalȱmarketingȱ cooperativesȱbyȱotherȱ agenciesȱ inȱtheȱsameȱmarketȱsheds.ȱȱȱ10.ȱ CROSSȬBORDERȱTRADEȱȱTheȱflowȱofȱlivestockȱthroughȱcrossȬborderȱtradeȱbetweenȱtheȱtwoȱcountriesȱisȱoneȱdimensionalȱi.e.ȱfromȱEthiopiaȱtoȱKenya,ȱalthoughȱsmallȱshoatsȱ(weighingȱlessȱ thanȱ 30ȱkgs)ȱ areȱ tradedȱ inȱ theȱ reverseȱdirectionȱ inȱ limitedȱ cases.ȱManyȱexpectȱ thisȱ tradeȱ toȱ flourishȱ onȱ theȱ basisȱ ofȱ betterȱ priceȱ offersȱ inȱ Kenya.ȱAlthoughȱthisȱcouldȱhaveȱbeenȱtheȱcaseȱinȱtheȱpast,ȱlivestockȱandȱmeatȱpricesȱhaveȱbeenȱsubstantiallyȱhigherȱinȱEthiopiaȱduringȱtheȱlastȱthreeȱyears,ȱandȱyetȱtheȱcrossȬborderȱtradeȱcontinuesȱ toȱfavorȱKenya.ȱThisȱhappensȱbecauseȱmostȱofȱ theȱ domesticȱ beefȱ demandȱ inȱ Ethiopiaȱ isȱ metȱ withȱ suppliesȱ fromȱ theȱhighlands;ȱ therefore,ȱdueȱ toȱ theȱabsenceȱofȱ largeȬscaleȱbeefȱexportsȱ fromȱ theȱcountry,ȱ pastoralȱ livestockȱ areȱ soldȱ acrossȱ theȱ border.ȱ Ofȱ note,ȱ fullȬtimeȱherdersȱ doȱ notȱ chooseȱ betweenȱmarketsȱ onȱ theȱ basisȱ ofȱ betterȱpriceȱ offers.ȱWhatȱ influencesȱ theirȱ decisionȱ isȱ marketȱ proximityȱ andȱ theȱ relianceȱ onȱbrokersȱ theyȱ knowȱ (dueȱ toȱ kinship).ȱ Similarly,ȱ theȱ availabilityȱ ofȱ essentialȱcommodities,ȱ includingȱgrain,ȱ alsoȱ leveragesȱdecisionsȱ concerningȱwhereȱ toȱsellȱ animals.ȱ Forȱ example,ȱ aȱ recentȱ studyȱ showsȱ thatȱ theȱ crossȬborderȱimportationȱofȱmaizeȱ forȱ theȱ firstȱ timeȱ fromȱKenyaȱ toȱSouthernȱEthiopiaȱhasȱincreasedȱ theȱ levelȱofȱ livestockȱ flowȱ towardsȱKenya37.ȱTheȱchoiceȱofȱmarketsȱonȱ theȱbasisȱofȱpriceȱ isȱdoneȱbyȱ livestockȱ tradersȱand,ȱ toȱsomeȱextent,ȱatȱ theȱbrokerȱlevelȱ(thoseȱoperatingȱacrossȱborders).ȱȱApparently,ȱ theȱ governmentsȱ ofȱ Kenyaȱ andȱ Ethiopiaȱ haveȱ differingȱ viewsȱregardingȱ theȱ crossȬborderȱ livestockȱ trade.ȱ Kenyaȱ viewsȱ itȱ asȱ anȱ essentialȱtradeȱ forȱobviousȱ reasons:ȱ itȱhelpsȱmeetȱ theȱ localȱmeatȱdemand,ȱ allowsȱ theȱimportationȱ ofȱ animalsȱwithȱ noȱ foreignȱ exchangeȱ payments,ȱ andȱ generatesȱlocalȱ revenueȱ andȱ possiblyȱ foreignȱ exchangeȱ asȱ wellȱ throughȱ exports.ȱEthiopia’sȱ differingȱ positionȱ comesȱ fromȱ theȱ lossȱ ofȱ localȱ andȱ foreignȱexchangeȱrevenuesȱgivenȱtheȱfactȱthatȱallȱ importsȱfromȱKenyaȱareȱtransactedȱthroughȱ hardȱ currency.ȱ Thisȱ stanceȱ hasȱ promptedȱ borderȱ officials,ȱ onȱ rareȱoccasions,ȱtoȱcontrolȱtheȱflowȱofȱtradeȱherdsȱacrossȱtheȱborderȱbutȱnotȱonȱtheȱscaleȱ exaggeratedȱ byȱ someȱ advocacyȱ groupsȱ andȱ NGOsȱ (ofȱ continuousȱharassmentȱofȱpastoralists).ȱThatȱ theȱ tradeȱ isȱgoingȱonȱsmoothlyȱ forȱmostȱofȱtheȱyearȱ indicatesȱ thatȱ theȱborderȱcontrolȱmeasuresȱareȱ temporaryȱ inȱnature.ȱYet,ȱ livestockȱ tradersȱ areȱ evenȱ moreȱ harassedȱ inȱ Kenyaȱ whenȱ obtainingȱ

37 Bekele and Aklilu (2007) Participatory Impact Assessment of New Livestock Markets in Oromia, Somali and Afar Regions, Feinstein International Center (draft).

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essentialȱmovementȱpermitsȱandȱatȱnumerousȱpoliceȱmannedȱcheckpointsȱenȱrouteȱtoȱterminalȱmarkets.ȱȱSoȱ far,ȱ theȱ crossȬborderȱ tradeȱ hasȱ beenȱ functioningȱ withoutȱ majorȱinterruption.ȱ Inȱ viewȱ ofȱ theȱ parallelȱ stance,ȱ however,ȱ aȱ formalȱ agreementȱbetweenȱtheȱtwoȱcountriesȱisȱnecessaryȱtoȱensureȱitsȱcontinuityȱandȱeliminateȱpotentialȱdisruptionsȱ inȱ theȱ future.ȱSuchȱanȱagreementȱ isȱalsoȱnecessaryȱ forȱcollaborationȱ onȱ animalȱ healthȱ relatedȱ issues,ȱ forȱ instance,ȱ inȱ termsȱ ofȱconductingȱ jointȱ vaccinationȱ operationsȱ acrossȱ theȱ border,ȱ withoutȱ which,ȱeffortsȱ takenȱ byȱ onlyȱ oneȱ countryȱ mayȱ notȱ materialize.ȱ Oneȱ case,ȱ inȱ thisȱregard,ȱ isȱ Kenya’sȱ decisionȱ toȱ vaccinateȱ againstȱ RVFȱ whereasȱ Ethiopiaȱengagesȱ inȱactiveȱsurveillance.ȱSuchȱdifferingȱpositionsȱ inȱaȱporousȱcommonȱborderȱ areaȱ areȱ incompatibleȱ andȱundermineȱunilateralȱ efforts.ȱThisȱ isȱ alsoȱtrueȱ forȱ theȱdiseaseȱPesteȱdesȱpetisȱ ruminants,ȱ asȱvaccinationȱ campaignsȱ inȱbothȱ countriesȱ takeȱ placeȱwithoutȱ anyȱ coordinationȱ andȱ atȱ differentȱ times.ȱHavingȱ aȱ longȱ commonȱ borderȱ necessitatesȱ tacklingȱ crossȬborderȱ issuesȱthroughȱ jointȱeffortsȱandȱ inȱ thisȱ regardȱCOMESA,ȱ IGADȱorȱAU/IBARȱcouldȱplayȱ aȱ significantȱ coordinatingȱ role.ȱAlternatively,ȱ eitherȱEthiopiaȱ orȱKenyaȱcouldȱ takeȱ theȱ initiativeȱ toȱ expandȱ theȱmandateȱ ofȱ theȱEthioȬKenyaȱBorderȱCommissionȱtoȱincorporateȱsuchȱpertinentȱlivelihoodȱissues.ȱȱ11.ȱ CONCLUSIONSȱȱComparedȱ toȱ theȱ 1990sȱ bothȱ Governmentsȱ areȱ increasinglyȱ realizingȱ theȱpotentialsȱofȱpastoralȱ livestockȱresources.ȱToȱsomeȱextent,ȱ thisȱ isȱreflectedȱ inȱnewȱallocationsȱofȱ resourcesȱ (e.g.ȱDFZsȱ inȱKenyaȱandȱquarantineȱstationsȱ inȱEthiopia)ȱandȱinȱtheȱrestructuringȱofȱrelevantȱgovernmentȱinstitutionsȱasȱeachȱcountryȱseesȱfitȱ(e.g.ȱMoLFDȱinȱKenyaȱandȱAPHRDȱinȱEthiopia).ȱInitiativesȱforȱnewȱ (orȱ amendmentȱ ofȱ existing)ȱ Actsȱ andȱ Guidelinesȱ alsoȱ indicateȱ theȱgrowingȱ interestȱ inȱ livestockȱ marketing.ȱ Privateȱ investmentsȱ inȱ feedlots,ȱranches,ȱabattoirsȱandȱliveȱanimalȱtradeȱsignifyȱtheȱconfidenceȱofȱinvestorsȱinȱtheȱsector.ȱȱȱTheȱ strategiesȱdesignedȱ toȱachieveȱ setȱobjectivesȱareȱmoreȱorȱ lessȱ similarȱ inȱbothȱcountries,ȱalthoughȱthereȱareȱapparentȱdifferencesȱowingȱtoȱvariationsȱinȱnaturalȱandȱphysicalȱresources,ȱvalueȱaddingȱmodalities,ȱpriorityȱsetting,ȱetc.ȱTheȱ ultimateȱ goalȱ ofȱ bothȱ countries,ȱ however,ȱ remainsȱ inȱ increasingȱ valueȱaddedȱ exportsȱ (mainlyȱmeatȱ products)ȱ ratherȱ thanȱ liveȱ animals.ȱ Thisȱ isȱ anȱappropriateȱdirectionȱthatȱshouldȱultimatelyȱresultȱinȱtheȱstrengtheningȱofȱtheȱlivestockȱsectorȱinȱbothȱcountries.ȱȱTheȱ tasksȱ requiredȱ toȱachieveȱ theȱultimateȱobjectiveȱareȱvariedȱbutȱcouldȱbeȱsummarizedȱ intoȱ twoȱmainȱ categories.ȱ Theȱ firstȱ involvesȱ establishingȱ andȱ

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maintainingȱ aȱ credibleȱ SPSȱ systemȱ throughȱ robustȱ veterinaryȱ systemsȱconsistingȱofȱbothȱpublicȱandȱprivateȱserviceȱproviders.ȱHowever,ȱsettingȱupȱsuchȱ aȱ systemȱ notȱ onlyȱ requiresȱ additionalȱ resourcesȱ butȱ alsoȱ theȱ enablingȱpolicyȱenvironmentȱ forȱ theȱpracticalȱapplicationȱofȱallȱ rulesȱandȱ regulationsȱthatȱneedȱtoȱbeȱobserved.ȱItȱshouldȱbeȱnotedȱthatȱneitherȱcanȱworkȱinȱisolation.ȱTheȱ secondȱ categoryȱ involvesȱ streamliningȱ theȱ efficiencyȱ ofȱ theȱmarketingȱsystemȱfromȱproductionȱtoȱconsumptionȱandȱ/ȱorȱexportȱlevels.ȱTheȱtasksȱtoȱbeȱcarriedȱ outȱ inȱ thisȱ categoryȱ areȱ numerous:ȱ marketȱ orientedȱ production;ȱinfrastructureȱ andȱ communications;ȱ financeȱ provision;ȱ marketȱ informationȱandȱintelligence;ȱavailingȱappropriateȱproductsȱinȱaȱtimelyȱfashion;ȱpackaging,ȱlabeling;ȱmarketȱpromotion,ȱandȱsoȱon.ȱObviously,ȱallȱ theseȱ tasksȱcanȱnotȱbeȱmetȱinȱoneȱgoȱbutȱratherȱthroughȱphasesȱand/orȱstages.ȱThisȱshould,ȱhowever,ȱbeginȱwithȱanȱunderstandingȱofȱwhatȱtheȱmarketȱdemandsȱandȱworkingȱinȱtheȱ‘reverseȱ valueȱ chain’ȱ orderȱ toȱ improveȱ efficiencyȱ throughȱ aȱ topȱ downȱapproach.ȱOfȱnote,ȱthisȱstrategyȱisȱtheȱprecursorȱforȱeconomyȱofȱscale.ȱȱȱOnȱ theȱ surface,ȱ itȱmayȱappearȱ thatȱ theȱ twoȱ countriesȱareȱ competingȱagainstȱeachȱother.ȱToȱanȱextent,ȱthisȱcouldȱbeȱtrueȱgivenȱtheȱsimilarityȱofȱproductsȱinȱquestion,ȱ targetȱ exportȱ destinations,ȱ andȱ theȱ sourcingȱ ofȱ livestockȱ fromȱ aȱcommonȱporousȱborder.ȱInȱreality,ȱbothȱcountriesȱhaveȱnotȱyetȱscratchedȱtheȱsurfaceȱ ofȱ theirȱ potentialȱ capacities.ȱ Inȱ anyȱ case,ȱ theȱ volumeȱ ofȱ theȱmeatȱdemandȱinȱtheȱMiddleȱEastȱandȱAfricaȱisȱadequateȱtoȱaccommodateȱmoreȱthanȱtheȱ combinedȱ exportsȱ ofȱ bothȱ countries.ȱAtȱ thisȱ particularȱ stageȱ theyȱ haveȱstrongerȱcommonalitiesȱwhenȱitȱcomesȱtoȱcontrollingȱtransboundaryȱdiseases,ȱstreamliningȱ crossȬborderȱ livestockȱ trade,ȱ andȱ preventingȱ cattleȱ theftȱ andȱbanditry.ȱThisȱfactȱunderlinesȱtheȱneedȱforȱcollaborativeȱeffortsȱforȱsolvingȱtheȱcommonȱproblemsȱalongȱtheȱborderȱareasȱofȱtheȱtwoȱcountries.ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱ

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ȱInstitutesȱ visitedȱ forȱ interviewsȱ (variousȱ dates):ȱDVSȱ (Kenyaȱ andȱ Ethiopia);ȱ Equityȱ Bank;ȱKLMC;ȱ KMC;ȱ KMCȱ Board;ȱ LIPFund,ȱ CARE;ȱ Liveȱ Animalsȱ Exportersȱ Association;ȱ MeatȱExportersȱAssociation;ȱMoLFD;ȱotherȱexportȱabattoirs.ȱ