An audit of the livestock marketing status in Kenya, Ethiopia and Sudan: Volume I

This paper is the first volume in a comparative study of how livestock markets function in Kenya, Ethiopia and Sudan. The study’s aim is to identify the key constraints and potentials in the systems operating in these countries and to develop a regional livestock marketing program to redress some of the key constraints identified. This volume provides a simple descriptive account of how livestock and related products are marketed focusing on similar marketing issues in each country. The findings, where possible, are presented in the same order for each country so that comparisons can be made.Key findings for the report are as follows:Whilst livestock prices drop down during droughts, and peak up during holidays, the price of meat has remained more or less constant in the major cities of Sudan, Kenya and Ethiopia in the last five years. This implies that butchery owners control the meat market. In fact, they are the most powerful group in the livestock marketing chain followed by Middlemen. The two groups control the price of livestock at major domestic markets and by extension the volume of the national red meat consumption in the three countries.The producer’s share of the retail price shows a declining trend over time particularly for cattle. Factors attributed for this state of affairs include the following the consumption level of red meat has not increased per capita or proportionally to the human and livestock populationthe domestic livestock markets have become increasingly supply driven due to the decline in live animals and meat exports.Transport constitutes a major cost factor in livestock trading and as a result, transport costs determine the level of profits accrued by livestock traders. Those traders with their own means of transport accrue the highest profit margin.Livestock are the most repeatedly (and perhaps the most highly) taxed agricultural commodity in the region. Available evidences do not support the perception that cross-border livestock trade takes place as a result of better price offers than the home markets. Cross-border markets occur:because of the excess number of livestock in the source because of proximity to the border rather than to the domestic marketsThe gradual integration into the cash economy and the recurrence of droughts at short intervals are increasingly pushing pastoralists to sell more animals than before. However, the intent to sell more animals has not been matched by a corresponding growth in per capita consumption and, more importantly, Kenya’s and Ethiopia’s near exclusion from the export markets has effectively limited the pastoralists’ ability to sell more livestock than is currently the case. Sudan, on the other hand, is actively engaged in the export market generating some $170 million annually from livestock and meat exports.Tannery and leather industries find themselves in precarious situations in all the three Countries due to there not being enough locally available volume of raw hides and skins. This situation which is exacerbated in Kenya and Sudan due to the export of raw hides and skins despite the fact that semi-processed skins and hides bring in nearly three times as much in foreign exchange. Cheap and subsidised imports of leather products and articles are also out-competing the local producers.Despite the significant contributions to the national economies of each country, the livestock sector has received only a small proportion of recurrent agricultural expenditures in the three countries. In all cases, resource allocations for livestock and animal health services do not commensurate at all with the revenues generated by the sector.The report recommends that the roles and responsibilities of governments and the private sector need to be reassessed with a view to handing over most trade related activities to the private sector whilst maintaining the regulatory and supervisory roles of governments.