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 Africa’s largest livestock population, which is largely 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.
The overall objective of the USAID-funded Pastoralist Livelihoods Initiative-Livestock Marketing (PLI-LM) project was to reduce poverty, hunger, and vulnerability to droughts and other shocks in pastoralist communities by sustainably improving livelihoods and incomes of pastoralists through enhanced market opportunities. The project’s key interventions focused on strengthening the commercial orientation and capacity to respond to market demand of pastoralists and other actors in the value chain and on constructing the infrastructure needed to enable market players to conduct efficient, fair, and secure transactions. The project, implemented by ACDI/VOCA in Afar, Somali, and the lowland pastoralist areas of Oromia, began in October 2005. The project was originally intended to run for two years but was extended for three additional years. All the extensions were approved and agreed upon between USAID/Ethiopia and ACDI/VOCA.
ACDI/VOCA’s approach to the PLI-LM project was based on three main methodologies—a livelihoods approach to pastoralists’ economic activities, a value chain approach to increase the efficiency of transactions throughout the Ethiopian livestock subsector and a business-performance approach to develop the capacity of individual enterprises within the livestock industry.
The PLI-LM project was implemented through three main program components:
- Export market development and value chain integration
- Key market infrastructure construction and operation
- Emergency response—this component was added in the second quarter of year one to respond to the severe drought in the Somali and Southern Oromia Regions.
Component 1: Export Market Development and Value Chain Integration
The objectives of component 1 were to increase pastoralists’ profits from livestock sales; stimulate a more supportive and enabling environment for livestock industry development, particularly in support of market access by pastoralists; and strengthen performance, integration and coordination throughout the Ethiopian livestock subsector as a platform for long-term industry growth and competitiveness.
Technical Supports and Workshops:
Through workshops and trainings, ACDI/VOCA developed the business skills of pastoralists, livestock traders, exporters and abattoir owners. This has resulted in an increase in pastoralists’ profits from livestock sales and has stimulated a more supportive enabling environment for the livestock industry. It has, in particular, improved pastoralists’ market access, and strengthened performance, integration and coordination throughout the Ethiopian livestock subsector as a platform for long-term industry growth and competitiveness.
ACDI/VOCA trained 1371 pastoralists, livestock traders, cooperative members and government experts in business skills development. The course modules covered a variety of topics such as business planning, livestock marketing, market information, marketing contract administration, bookkeeping, animal fattening, feedlot management, veterinary care, pricing, animal nutrition, sustainable market operation and maintenance. Over the life of the project, a total of 2,442 beneficiaries took part in different in-country trainings, technical supports and workshops organized and given by ACDI/VOCA.
Local Exchange Visits and Foreign Study Tour:
ACDI/VOCA has also conducted local exchange visits and a foreign study tour to create direct market linkages; expand contract sales among abattoirs, exporters, pastoralists and cooperative members; and learn how livestock marketing systems are being managed in other countries. Five Live-animal and meat exporters participated in a trip to Israel, and 92 pastoralists and livestock marketing cooperative members took part in local exchange visits. The study tour in Israel covered livestock production, processing, and marketing of meat and meat products. The objective of the study tour was to allow participants to visit livestock (live-animal and meat) marketing organizations; observe enhanced marketing systems and strategies; and create market linkages between the counterparts.
Market Information Collection and Dissemination:
ACDI/VOCA made tremendous efforts to analyze, interpret, and disseminate updated and reliable livestock market information to livestock traders, PLI partners, livestock-marketing cooperatives/unions, NGOs, and concerned government organizations via the Weekly Livestock Market Monitoring Bulletin. The bulletin was disseminated in electronic and hard copies and is translated into four local languages (Amharic, Afan Oromo, Somali and Afar). The information contained in the Bulletin included weather forecasts; pasture and water conditions; livestock market information; livestock conditions; news and information updates; types and breeds of animals; numbers of animals supplied to the market and sold; and price ranges and average price per animal.
Livestock Value Chain Analysis in PLI-LM Targeted Regions:
Livestock value chain analyses were conducted in all PLI-LM targeted regions. The purpose of conducting the VCA was (1) to train ACDI/VOCA and other PLI implementers in value chain analysis methodology and to increase their understanding of the framework; and (2) to complete a study of the livestock market chains from the Afar, Somali, and Oromia pastoralist regions of Ethiopia, which would serve as a guide for targeting project interventions. The study combined classroom-based training in Addis Ababa and field visits led by the consultants for the application of the methodology in field setting.
Component 2: Key Market Infrastructure Construction and Operation
The objective of component 2 was to establish operationally sustainable market facilities that would enable pastoralists to conduct economically optimal market transactions. Throughout Year I, ACDI/VOCA conducted extensive consultations on livestock market design plans and site selection at local, woreda, regional and national levels, together with USAID and PLI partners. Results of these multilevel stakeholders’ consultations were major inputs for the preparation of final infrastructure plans, bill of quantities and drawings. Following the preparatory activities, the construction of the livestock markets was completed in 2007 and the markets were handed over to the respective governmental entities. Thus, under the PLI-LM project, ACDI/VOCA made 25 modern livestock markets.
ACDI/VOCA provided trainings to all those who are responsible for operating and managing the markets before officially handing over the ownership and management of the markets to woreda administrations and municipalities. The trainings included basic performance monitoring and development of recording systems for livestock markets; business planning and development of small businesses, including staffing and management restructuring; and management and operations of effective markets. Many of these markets have increased business activity, both in terms of livestock trade and in terms of supporting markets in the adjacent areas.
Component 3: Emergency Response
The objective of component 3 was to enable pastoralists to sell livestock commercially to reduce the number of animals in advance of drought-caused shocks. ACDI/VOCA piloted market-oriented interventions to support drought-affected pastoralists and their livestock. This strategy enabled pastoralists to sell livestock commercially to reduce the number of animals in advance of collapsing prices and animal deterioration caused by drought. The strategy supported one of the objectives of USAID’s Famine Fund—to find improved ways of addressing root causes of poverty.
ACDI/VOCA accomplished 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 appraised loan applications from livestock traders and cooperatives that purchased livestock from drought-affected areas in southern Ethiopia. They then made 12 loans, totaling $150,000. Under the second, ACDI/VOCA provided $250,000 in guarantee funds for a commercial loan scheme with the Bank of Abyssinia. During the drought period the loans supported and enabled them to de-stock 7,551 drought-affected livestock commercially.
ACDI/VOCA exerted substantial effort for monitoring and loan collection programs, and it has recovered $290,450 (71 percent cooperative loans and 75 percent of the trader loans). Overall ACDI/VOCA used the collected loan funds to implement supplementary activities and to accomplish the overall objective of the project.
ACDI/VOCA has also facilitated the private sector purchase of drought-affected livestock has also strived to ensure an effective asset-to-cash transfer system for pastoralist livestock keepers. Finally these were achieved through the establishment of correct environment for the linkage of private sectors with pastoralists.
