Market structure, trader behaviour and performance of small ruminants marketing in Benin, West Africa

AbstractLivestock markets are characterised by imperfections, distortions, and efficiency problems that impact livestock marketing. The purpose of this research was to analyse the sheep and goat marketing system in Benin using the structure-conduct-performance (SCP) approach. Primary data were collected from 215 small ruminant traders selected from 21 markets to calculate the market concentration degree, marketing margin, and efficiency. The four largest traders’ concentration ratio (CR4) and Hirschman Herfindahl Index (HHI) show that small ruminant markets have an effective competition structure. These markets were unconcentrated, and barriers to entry were nonexistent, except for trading capital. Small ruminants sold in markets differed according to the animal’s body condition, ecotype, age, sex, and coat colour. These attributes and periods of sale are the main factors that influence pricing. Transport costs, animal feed and care costs, transport, and market taxes were the main transaction costs faced by the traders. The total transaction costs per sheep and goats were estimated at 742.7 ± 530.7 XOF and 663.2 ± 463.6 XOF respectively (XOF is a common and official currency of the eight member states of the West African Economic and Monetary Union. 1 USD = 612,38 XOF). Average marketing margin was 5,869.2 ± 4,357.7 XOF per sheep and 3,851.2 ± 1,597.8 XOF per goat. The marketing efficiency was 78.8% for sheep and 78.9% for goats. This depended significantly on the type of trader, whereby wholesalers were the least efficient. Efficiency, including transaction costs and marketing margins, did not vary significantly between sheep and goats. To improve the efficiency of small ruminant marketing, attention needs to be given to improving the road infrastructure that serves markets and formulating new marketing policies on taxes.