Ethiopia – Pastoralist Livelihoods Initiative-Livestock Marketing (PLI-LM)

Strengthening the Value Chains of Pastoralist Communities

With an estimated 41 million cattle, 26 million sheep, 23 million goats and 2 million camels, Ethiopia has the largest livestock population in Africa. These animals are concentrated in pastoralist areas of the country. Pastoralism is a cultural and economic system that incorporates and defines social structure, resource management, productivity, trade, and social and welfare mechanisms in communities founded on livestock rearing as the primary economic activity. Pastoralist communities hold the intangible resource of strong local knowledge of livestock rearing, which has helped these communities subsist largely from their animal wealth for generations. However, this livelihood is highly vulnerable to drought, animal disease outbreaks or other shocks. The 8 to 9 million pastoralists in Ethiopia subsist on an annual income of around $92, of which approximately 85 percent is derived from the sale of livestock and livestock products.

The Pastoralist Livelihoods Initiative (PLI) is a two-year project, funded by USAID’s Famine Fund, that aims to increase pastoralists’ food security by strengthening their resiliency against drought and other economic hardships, while laying the foundation for long-term economic growth in the livestock subsector. ACDI/VOCA is implementing the Livestock Marketing component of PLI (PLI-LM) through a strategy that links value chain and livelihoods approaches. This strategy recognizes that pastoralism is inherently not market oriented—that pastoralists are focused on minimizing risk and vulnerability rather than maximizing profits—but aims to assist them in achieving both areas by creating access to more profitable markets. This is based on the premise that strengthening the competitiveness of the Ethiopian livestock industry is instrumental to sustainably improving pastoralist livelihoods and increasing their economic resilience.

There are three components of the PLI-LM project. The third component was added in 2006 as a result of the severe two-year drought in Somali and southern Oromia regions.

Export market development and value chain integration

PLI increases pastoralists’ profits from livestock sales to stimulate a more supportive enabling environment for livestock industry development, particularly in support of pastoralist market access, and to strengthen performance, integration and coordination throughout the Ethiopian livestock subsector as a platform for long-term industry growth and competitiveness.

Key market infrastructure construction and operation

ACDI/VOCA establishes operationally sustainable marketing facilities that enable pastoralists to sell their livestock for fair prices. ACDI/VOCA, in collaboration with partners, identified 25 sites for the construction of livestock markets. In the selection process, pastoralists, traders, concerned government officials, PLI partners and other stakeholders were involved.

Emergency response

ACDI/VOCA is piloting market-oriented interventions to support drought-affected pastoralists and their livestock. This strategy enables pastoralists to sell livestock commercially to reduce the number of animals in advance of collapsing prices and animal deterioration caused by drought. It is in line with one of the underlying philosophies of the famine fund—to find improved ways of addressing root causes of poverty. ACDI/VOCA accomplishes this through two main activities: emergency credit provision, with loan schemes based on livestock off-take business plans rather than collateral, and the dissemination of livestock market information.

Under the first loan scheme, ACDI/VOCA staff has appraised loan applications from livestock traders and cooperatives that purchase livestock from drought-affected areas in southern Ethiopia and made 12 loans, totaling $150,000. Under the second, ACDI/VOCA has provided $250,000 in guarantee funds for a commercial loan scheme with the Bank of Abyssinia.

In conjunction with this credit provision, ACDI/VOCA has compiled and disseminated a market information bulletin designed to accelerate commercial off-take of livestock as well as increase coordination among NGOs. This bulletin has been disseminated on a weekly basis to traders, NGOs, government officials and other stakeholders.

Market data collected in selected secondary markets of Oromia, Somali and Afar is compiled, analyzed and distributed via the Livestock Marketing Bulletin to over 264 recipients at various levels of the livestock marketing chain on a weekly basis (during the emergency) and then on a bi-weekly basis. Several of the livestock marketing bulletins were translated into Amharic, Oromiffa and Somali in order to reach a wider readership.

Other PLI-LM interventions designed to increase off-take have included the organization of trader trips to drought-affected areas and the facilitation of direct marketing linkages among pastoralist groups and traders, cooperatives and exporters. Local government bodies and pastoralists have been pleased to see buyers in their villages and have taken the opportunity to sell their drought-affected animals for cash. During these encounters, seller groups have obtained information on buyers’ requirements and market timing. This information exchange—and the relationships developed—will enable pastoralists to obtain higher and more reliable prices. Some of these meetings have resulted in the initiation of contract buying for traders who are short on capital. The traders have expressed interest in formalizing and expanding the system.

For more information, contact Maziar Sassanpour at msassanpour@acdivoca.org.

Updated: 1/08

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