Market Assessment

Ethiopian Borena and Southern Somali Areas - Livestock Value Chain Development Report, 2006

    This report describes and analyzes the livestock value chain in the Borena and Southern Somali areas, and then sets out a series of recommendations based on the following outline:

    1. Value chain analysis
    a. Overview of the Ethiopian livestock value chain with discussion on the major
    market channels in the Borena area of the Oromia Region and the Southern
    Somali Region
    b. Overview of the key actors, or participants involved in transactions resulting in direct ownership of livestock during the process of moving the product from conception to end consumer.
    c. Discussion of the key factors of end markets, enabling environment, inter-firm linkages, supporting markets and upgrading effecting value chain dynamics and success.
    d. Discussion of the relationships between the actors in the value chain, including power dynamics, the transfer of learning and benefi

    Summary of results
    The characteristics and trends of the livestock industry identified by the study include the following:

    1. Extreme fractionalization of the value chain: the value chain is characterized by multiple transactions between traders of different sizes occurred with no value addition in the process, and weak relationships between value chain actors.
    2. Lack of a clear and coordinated effort by the various levels of the Government of Ethiopia in investing in the livestock sector: The lack of
    coordination and investment extends to a) a lack of appropriate veterinary and extension service coverage in pastoral areas, b) a lack of appropriate funding levels for livestock industry related activities, and c) a lack of livestock market information management and distribution to interested industry stakeholders.
    3. Weak supporting service markets, including a) significant need for commercial veterinary services, b) lack of appropriate livestock transportation trucks, c) complete lack formal financial services available pastoralists, traders, and livestock cooperatives, d) complete lack of insurance products
    4. The lack of easily accessible market information, such as end market quality and quantity requirements and delivery timing needs, available to all actors, but particularly those at the lower levels, is a result of mistrust and weak relationships along the chain and decreases the efficiency of the transactions.
    5. The Southern Somali Region is characterized by high levels of unofficial cross border livestock trade to Kenya and Somalia.