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Economics and Marketing of the Communally Managed Indigenous Farm Animal Genetic Resources in Ethiopia. Girma Tesfahun Kassie Supervisory team: Professor Dr. Clemens Wollny Georg-August University Göttingen, Germany Professor Dr. Awudu Abdulai University of Kiel, Germany
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Economics and Marketing of the Communally Managed Indigenous Farm Animal Genetic Resources in Ethiopia Girma Tesfahun Kassie Supervisory team: Professor Dr. Clemens Wollny Georg-August University Göttingen, Germany Professor Dr. Awudu Abdulai University of Kiel, Germany Dr. Adam Drucker International Livestock Research Institute, Addis Ababa, Ethiopia
Introduction • Livestock diversity plays a crucial role in the livelihoods of poor farmers in developing countries. • The diversity of farm animal genetic resources (AnGR) [1] significantly contributes towards achieving food security at the household level. • Despite their importance, indigenous breed livestock production, marketing and policy research and development in Ethiopia has not been consumerate with the actual and potential contribution. • [1] The term animal genetic resources (AnGR) is used to include all animal species, breeds and strains (and their wild relatives) that are of economic, scientific and cultural interest to humankind in terms of food and agricultural production for the present or in the future (Rege and Gibson, 2003).
Livestock supply some 30% of total human requirements for food and agriculture. • 70% of the world’s rural poor depend on livestock as an important component of their livelihoods. • Livestock also contribute on average 35% and up to 80% of agricultural GDP in (SSA) countries. • Ethiopia has the largest livestock population and the highest draft animal population on the continent.
Despite this, performance in the production of the major food commodities of livestock origin in Ethiopia has been poor. • Major Constraints: • Inadequate feed and nutrition, • Widespread diseases and poor health, and • Inadequate livestock policies with respect to credit, extension, marketing and infrastructure.
Efforts have been exerted towards improving the productivity of livestock in Ethiopia. The focus has been through the introduction of exotic livestock and their crosses, with a narrow focus on commercial traits. • However, these breeds are frequently unable to sustain high production in the less hospitable production environments of Africa.
Statement of the Problem • Genetic erosion of domestic animal diversity has placed over a quarter of the world’s breeds at risk of extinction. • Africa is home to 145 cattle breeds/strains. • Some 22% of the original breeds have become extinct in the last 100 years. • 27% of the remainder is at varying degrees of risk • Major factors contributing to the loss of diversity are market and intervention failures that affect AnGR in livelihood and market oriented agricultural systems.
Genetic erosion within livestock species, including their wild ancestors, is of particular concern because of its implications for the sustainability of locally adapted agricultural practices and the consequent impact on food supply and . • When a breed becomes extinct an already narrow genetic base shrinks irreversibly. • The implication is clear and needs to be addressed in a way that makes the available animal genetic resources used and managed in an effective and sustainable manner.
However, the past and present neglect of local knowledge regarding AnGR and traditional breeding practices causes major difficulties. • Key reasons for the failure to effectively use and conserve include: • Lack of knowledge by policy-makers regarding the important contribution of AnGR to the livelihoods of the poor; • Ineffectual institutional arrangements to enable livestock-keepers to manage these resources; and • Lack of policies and incentives supporting their use and conservation, and • Inadequate attention to the economic valuation of AnGR.
Decisions concerning the management of AnGR would be facilitated by the availability of information on the economic value of populations (e.g. breeds), traits and processes (e.g. alternative breeding and/or conservation programmes). • Valuation is also essential for the development of ’benefit-sharing’ frameworks. • It is also required as an input into the development of incentive schemes for in-situ conservation programmes.
Methodologies for placing economic values on genetic resources have until recently been limited to plant (including forest) genetic resources. • Over the last few years a number of valuation techniques for AnGR have been shown to perform well. • These include the development of non-market valuation techniques for AnGR.
Improved understanding of the market value of AnGR can therefore serve to improve the overall management of these essential resources. • Economic valuation can play an important role in ensuring an appropriate focus for conservation efforts. • Nonetheless, hardly any studies exist related to the economics and marketing of indigenous AnGR in Africa, in general, and in Ethiopia in particular.
Objective of the study • Generally: to contribute to the economic valuation and marketing efforts of indigenous farm animal genetic resources in Central Ethiopia. • Specifically to: • Describe the mechanisms by which breeds are differentiated and the values (both market and non-market) which are attributed to indigenous animals by the farmers and communities in the study area. • Analyze the determinants of supply of, and demand for, indigenous livestock and livestock products, including assessment of any potential niche markets, existing marketing channels (including transaction costs), and opportunities for livestock keepers to access these markets.
Main Research Questions • What are current practices and future opportunities for the conservation and sustainable utilization of AnGR in Central Ethiopia? • What are the main economic and market factors that need to be considered in establishing a successful community – based management program for AnGR? • To what degree is the livelihood contribution of indigenous livestock breed keeping constrained by production, market and policy factors? • In the context of defining appropriate conservation and sustainable use strategies, which breeds of threatened indigenous livestock have a potential to be economically competitive?
Hypotheses: • 1) The livelihood contribution of indigenous breed livestock is at least as good as that of exotics and their crosses in the production systems under consideration in the study area, particularly once non-market values have been accounted for (e.g. adaptive traits, socio-cultural functions). • 2) Management and marketing opportunities to improve the contribution of indigenous breeds to poor farmer livelihoods can be identified and quantified
Expected Outputs • Market opportunities for indigenous livestock quantified and institutional constraints to commercialization and marketing identified, • Producer and consumer preferences for alternative livestock genotypes (and associated products) quantified, and cost benefit analysis of alternatives conducted and results used to inform policy discussions and development. • Recommendations for improved management interventions and marketing of indigenous breed livestock
Methodology • The research will be carried out as part of the ILRI-BMZ project “Improving the Livelihoods of Poor Livestock-keepers in Africa through Community-Based Management of Indigenous Farm Animal Genetic Resources” and in collaboration OARI (Ethiopian NARS), as well as ILRI. • Near Bako Agricultural Research Center, Central Ethiopia. • Horro sheep will provide an initial focus with regard to the livestock species/breed as they are one of the main livestock breeds in the study area. • Other species/breeds will be considered for comparative purposes.
Output 1 • Economic analysis of production system surveys. • Gather information on priority species, genotypes, products, utilization, ownership, off-take/sales, and decision making and household consumption disaggregated by gender. • Common production technologies, producers’ practices, profitability and technological needs of the producing households will be identified through a survey of about 5% of the households.
Producer preferences and the value they place on non-marketed traits (e.g. disease resistance, heat tolerance, foraging capability and sociocultural functions) will also be identified for different genotypes. • The survey and subsequent analysis will identify levels and determinants of production and marketed surplus and the current contribution of priority indigenous breeds (versus other genotypes) to household income, nutrition, investment, and other social functions.
Output (2) • Market and consumer surveys. These • Will be conducted in rural, urban and peri-urban markets to assess the potential for improved marketing strategies and opportunities for the household. • A minimum of 25 temporally distributed observations from each of the markets will be used to identify factors affecting market demand and supply, identify the mechanisms that determine market prices, and estimate income and price elasticities of demand.
Four levels of analysis will be pursued: • analysis of structure-conduct-performance of the marketing channels; • price integration analysis to asses degree of competitiveness; • Traders’ individual margins and costs will be used in a transactions costs analysis; and • Market modeling to assess impact of policy and institutional options
b. A contingent valuation survey of about a maximum of 200 rural, peri-urban and urban households (consumers), stratified by income, will be undertaken in order to identify “willingness to pay” (WTP) for the priority species and breeds. • Hedonic pricing approach will also be used to complement the results of the contingent valuation survey, where sufficient market data exists.
Data Analysis (Output 1 and 2) • Methodologies for determining to what extent market values of genetic resources predict the real value of genetic resources are less well developed. • Employment of a mix of analytical tools is strongly suggested.
Analytical tools for potential use in this study include: • Econometric approaches such as basic random utility, variance heterogeneity, and mixed logit estimation, bio-economic modeling, composite trait valuation models, and the like. • Other statistical and mathematical programming models may also be considered. • Any type of computer software, such as SPSS, @RISK, and LINDO may be used to facilitate data analysis.
