Livestock Marketing in Kenya and Ethiopia

John McPeak

Department of Public Administration

Syracuse University

336 Eggers Hall

Syracuse, NY 13244

e-mail: jomcpeak@maxwell.syr.edu

Office Phone: (315) 443-6146

Fax: (315) 443-9721

January 15, 2003

1) Summary

Livestock marketing is critical to development of arid and semi-arid lands in Kenya and Ethiopia. Donors are showing renewed interest in funding livestock marketing activities. Livestock market improvement offers the potential to reduce poverty in areas that are identified as the poorest in these countries. Such activities also allow donors to move from a “relief” mode to a “development” mode in dryland areas, as there is growing frustration with dryland activities being in permanent “relief” mode. However, the research community is not currently able to provide donors with clear and specific information to use in designing livestock marketing activities. It is not at all clear how research findings at the macro, meso, and micro levels are to be reconciled and used in program design. It is also not clear how markets should be designed to meet marketing needs in both “normal” and “crisis” periods. At this point in time, it is difficult to provide specific recommendations based on research to donors. The objective of this project is to bring together researchers knowledgeable about livestock marketing in this area in order to integrate information about livestock marketing at different levels. The outcome will be the publication of these various insights, and the provision of a set of recommendations to donors interested in livestock market development.

2) Abstract

The project begins by conducting a review of research on livestock marketing in Kenya and Ethiopia. A census of researchers and research ouputs is gathered. This is used to define a participant list for a workshop to be held in Nairobi in 2003. At this two day workshop, researchers active in this area present their findings to their peers. Insights developed by working at a particular level (micro, meso, macro) or context (crisis period, normal period, geographic area, cultural group) are shared with others who have expertise at other levels and contexts. Participants will also be asked to identify gaps in current knowledge. Research funds for this project will be allocated to research on identified gaps that are feasible given funding and time constraints. The proceedings of the workshop and the findings of these commissioned studies will be provided to interested donors by the end of 2003. This will take the form of either a special issue of a journal or an edited volume.

Participants will benefit from this workshop by gaining insights into issues and areas that are outside of their area of expertise. Donors will benefit from this project by having a readily accessible document that outlines current understanding of livestock marketing in this area, and highlights the practical implications of research for intervention design. Residents of semi arid and arid areas will benefit from this project if these insights allow improved design of interventions to improve livestock marketing and reduce poverty.

3) Narrative

A. Project Rationale

Areas where livestock raising is the main agricultural activity have the highest incidence of poverty in east Africa (Thornton et al. 2002). These areas are also subject to a high degree of production risk (Coppock et al 1997; McPeak and Barrett 2000). Recently among the donor community, there has been increasing concern that available funds are being allocated almost entirely to relief efforts. While relief effort address humanitarian needs in the immediate term, the do little to address underlying poverty, and provide little hope of preventing future crises. Frustration with this situation has led major donors in this region, including USAID, to begin rethinking their strategy for arid and semi-arid lands (USAID 2002).

Arid and semi-arid lands are often limited in their resource diversity. The resource base in these areas is for the most part only suitable for raising livestock (Range Management Handbook Series, 1991-1992; UNESCO, 1984). Improvements to the livestock sector offer the most promising opportunity to move donor funded interventions from “relief” mode to “development” mode. First, livestock raising employs the majority of people in these areas, and is by far the largest source of revenue generation in these areas (Thornton et al. 2002). Second, beneficial income diversification, which is a stated goal of USAID in pastoral areas (USAID 2002), is likely to be based on initial capital generated by livestock sales (Little et al. 2000). Overall, targeted interventions in the livestock sector present the opportunity to reduce poverty, encourage economic growth, and generate capital for use in alternative income generating strategies.

Efforts to improve livestock markets are an example of targeted interventions in the livestock sector. However, given the current state of knowledge, it is not at all clear what type of interventions should be designed and at what level. Current research tends to find the interventions most appropriate to the level at which the analysis is conducted. For example, working at the micro level, McPeak (2002) finds Gabra herders in northern Kenya will increase market participation if policies to decrease the risk of herd loss are implemented. Working at the meso level, The Range Management Handbook series in Kenya identify district level policies that could increase market participation (1991-1992). At the national level, Barrett et al. (2002) identify the influence of national quarantine policies have on livestock prices, and suggest that such policies need to be rethought. At the international level, Aklilu et al (2001) identify how increased export promotion and removal of import restrictions in the Arabian Peninsula will increase livestock marketing from east Africa.

In addition, there is a growing understanding of how markets can be used in crisis periods to reduce pastoral risk exposure (Hogg 1997; Aklilu and Wekesa, 2001; Aklilu and Wekesa, 2002). However, it is not yet clear how to integrate into market design transitions between “normal” marketing and “crisis” marketing.

What is missing is an overall sense of how interventions at different levels and for different states of the world fit together, how they should be prioritized, and how they should be sequenced. While changes at all levels are needed, where should we start? How will changes at one level influence changes at a different level? Are any types of interventions pre-conditions for success of other interventions? Most specifically, can we be sure that changes in the market structure at higher levels will lead to poverty reduction at the household level? Can we be sure that potential benefits to changed market conditions at the local level will not be unobtainable due to blockages at higher levels? Can we identify policies at the international level that will encourage trade, or are currently inhibiting trade? Can we be sure that market interventions designed for normal times are flexible enough to address needs in crisis periods? The goal of this program is to gather together researchers working on livestock marketing in Kenyan and Ethiopian marketsheds to begin developing an understanding of these issues, and how these marketsheds are influenced by larger regional and international factors.

B. Implementation Plan

The first objective of gathering individuals who have studied livestock marketing in Kenya and Ethiopia together is to identify what answers we already have from existing studies. This would be accomplished in two steps. The first step, which is already underway, is an informal census of people who have studied livestock marketing issues in this area to find out who has done work on this topic. This involves reviewing the literature, contacting people by e-mail, and setting up conference calls to discuss particular issues.

The second step is to gather individuals who have particular insights into livestock marketing in this area for a 2 ½ day workshop in Nairobi in March, 2003. The proposed dates are from the 13^th through the 15^th of March. The first day will be devoted to international and national level issues of livestock trade. The second day will identify and discuss issues at the sub-national and household level. The third (half) day will be devoted to issues of crisis period marketing.

Researchers working on livestock marketing issues in east Africa and groups working on livestock marketing issues would be invited to attend. The focus of this meeting would be on marketing of live animals raised in arid and semi-arid areas, leaving issues of the marketing of livestock products (milk, manure, hides,…) as topics for separate meetings.

Provisional workshop topics:

· Marketing behavior at the household and individual level

· Market structure and operation at the meso level (Locations, Districts, PA’s, Zones, Regions)

· Market structure and operation within the countries of Kenya and Ethiopia

· The regional livestock market and the prospects for international trade

· The role of markets in crisis periods

· Linking our analysis of livestock markets at different levels and during different time periods (crisis versus normal).

For these topics, the goal of the workshop is to specify what we already know, and outline what we need to investigate in the future.

From the preliminary work undertaken for the first step described above, a list of possible attendees includes:

· John McPeak, Syracuse University

· Chris Barrett, Cornell University

· Peter Little, University of Kentucky

· Jerry Stuth, Texas A&M

· Getachew Gebru, Utah State University

· Patti Kristjanson, Simeon Ehui, and Tom Randolph, ILRI

· Julius Kilungo and Elliot Mghenyi, Tegemeo

· Francis Chabari, CORDAID

· Yakob Aklilu and Chip Stem, OAU-IBAR

· Gabremadhi Elani, IFPRI

· Chris Delgado, IFPRI

· Jean Ensminger, Caltech

· Winnie Luseno, RTI

· Were Omamo, not sure at the moment

· Stephen Mbogoh, Drylands Research

· Fred Zaal and Ton Dietz, University of Amsterdam

· John Morton, NRI

· Nick Maudner, FEWS-NET

· Abdirizak Arale, African Studies Center – University of Amsterdam

· ministry reps Kenya and Ethiopia,

· Kevin Smith, Diana Putnam, Meg Brown, USAID

A second objective of the workshop is to identify gaps in knowledge that are research priorities. By the end of the workshop, topics needing further study will be identified. Proposals to research these topics will be solicited in the two months following the workshop. By the end of June, sub-contracts will be allocated to the proposals that best address the research gaps identified in the workshop. By the end of September, these commissioned studies will be completed.

Workshop participants will be asked if they are willing to contribute a 10 to 20 page brief that describes the current state of knowledge in their area of expertise. These will be used to develop chapters in the final report of this project. In addition, the commissioned studies will be summarized in chapter form. A final output of the project will be an edited volume that presents an overall view of livestock marketing in east Africa, with an emphasis on identifying priority interventions at different levels, and describing the connections between interventions taken at different levels. Work on producing this edited volume will be conducted in the second half of 2002, and be completed by the end of the year.

C. Summary of Timeline:

· December 2002 budget and proposal finalized with GL-CRSP

· January 2002- Graduate Assistant at SU identifies participants not listed on the original proposal working on livestock marketing issues in Kenya and Ethiopia, gathers together studies done by researchers on this topic

· January 2002 – work continues identifying individuals and groups, resulting in review of the literature document available by February / March 2003 (before or at the workshop)

· January 2003 – workshop date, venue, and purpose mailed to individuals who are potentially interested in attending

· February – April 2003 – receive and organize list of attendees. Finalize literature review document. Work with in country (Kenya and Ethiopia) assistants to formalize arrangements

· March 2003 – workshop in Nairobi

· April 2003 - a research agenda generated by the workshop provided to the GL-CRSP management entity. This includes a summary of the findings of the workshop, an agenda for further follow on study proposals, and the outlines of an overall research agenda on livestock marketing in Kenya and Ethiopia

· April -May 2003 – select follow on study proposals

· May 2003 – August 2003 – implement follow on studies. These will be reviewed during a visit to East Africa in August 2003.

· September 2003 – conclude follow on studies and begin modifying final reports into book chapter form.

· By end of calendar year 2003 – produce draft of an edited volume.

4) Team Function

For this short project, John McPeak will serve as the only team member. McPeak is an economist who has conducted extensive research in pastoral areas. McPeak recently returned from three years working in northern Kenya with the GL-CRSP PARIMA project, and has also been involved with GL-CRSP LEWS collaboration. He is currently an assistant professor in the Department of Public Administration at Syracuse University.

5) Developmental Relevance

Development of livestock marketing in pastoral areas has been identified as a priority by donors (USAID 2002). Currently, there is no reference document that collects information on research findings on livestock marketing on which to base these interventions. Further, until such a collection of information takes place, it is not possible to identify where there are research gaps. Defining livestock marketing interventions that will succeed requires they be designed with the best information possible. The impact of this project will be measured by the extent to which policy makers utilize the collected insights of researchers active in this field in their program design.

6) Biographical Sketch

available on request.

7) Bibliography

Aklilu, Y. and M. Wekesa (2002) Kenya – Livestock and livelihoods in emergencies. Reliefweb: Field Exchange. Emergency Nutrition Network.

Aklilu, Y. (2001) Presentation to the Pastoral Coordination Workshop, November 27, Safari Park Hotel, Nairobi.

Aklilu, Y. and M. Wekesa. (2001) Livestock and Livelihoods in Emergencies: Lessons learnt from the 1999-2001 emergency response in the pastoral sector of Kenya. OAU-IBAR, Feinstein International Famine Center, School of Nutritional Science and Policy, Tufts University.

Barrett,C. F. Chabari, D. Bailey, D. L. Coppock and P. Little (2002) Livestock Pricing in the Northern Kenyan Rangelands. Mimeo. Cornell University

Coppock, L., P. Little, C. Barrett, A. Aboud. (1997) Pastoral Risk Management Project Proposal. GL-CRSP.

Little, P., K. Smith, B. Cellarius, D. Coppock, and C. Barrett. (2001) Avoiding Disaster: Diversification and Risk Management among East African Herders in Development and Change. 32(3)

McPeak, J. (2002) Contrasting Income Shocks with Asset Shocks: Livestock Sales in Northern Kenya. Mimeo. Cornell University.

McPeak, J. and C. Barrett. (2001) Differential Risk Exposure and Stochastic Poverty Traps Among East African Herders in The American Journal of Agricultural Economics, 83(3) 674-679

Range Management Handbook of Kenya Series (1991 – 1992) Republic of Kenya – Ministry of Agriculture, Livestock Development, and Marketing.

Thornton, P., R.L.Kruska, N.Henninger, P.M.Kristjanson,R.S.Reid, F.Atieno, A.N.Odero and T.Ndegwa (2002) Mapping Poverty and Livestock in Developing Countries. IRLI: Nairobi.

UNESCO (1984). Integrated Project In Arid Lands. Technical Report A-6, Part 1, Integrated Resource Assessment. UNESCO: Nairobi

USAID (2002) Pastoral Coordination Workshop Cable – Final.