Addis Fortune (Addis Ababa)

12 January 2014

Ethiopia: Time to Resolve the Structural Problems of the Livestock Market - Lags Mean Loss

Having lofty ambitions is not new to the ruling EPRDFites. It has been their modus operandi since the guerrilla years. Liberating the nation from the bloody pseudo-socialist military dictatorship of the time was their ambition in the more than 17 years of guerrilla fighting. Although many have denounced their dream as impossible, they have fought hard to turn the tide in their favour and seize power.

It was only after they officially declared their victory that the world started to lend its ears to their pronouncements. Yet, their ambition did not stop there. Rather, it went further to the consolidation of the economy, the opening-up of the political sphere and the strengthening of foreign relations.

To the dismay of naysayers, many of the ambitions of the Revolutionary Democrats have translated into ground realities. A nation that was once proclaimed to be getting closer to chaos and total collapse has now proved itself to be politically stable, economically resurgent and well placed diplomatically.

If anything, the 24-year journey of the EPRDFites has been all about reversing narratives. It entailed replacing the story of demise with that of hope; painting a new picture of the nation, through infusing a new type of energy.

Of course, the job is yet to be completed. There are still many unfavourable narratives that the ruling Revolutionary Democrats ought to act to change. Whereas some have obtained their attention, others are yet to.

One of the narratives wherein action has started is the one that involves the nation's livestock resource and the pastoralists who command a large proportion of it. Ever since the EPRDFites embarked upon the Pastoral Community Development Program (PCDP) - in close collaboration with the technocrats of the World Bank (WB) - the dominant narration was that pastoralism is a backwards way of life. The gross policy recommendation that used to be made by policy gurus, even within academic corridors, was to turn pastoralists into sedentary agriculturalists.

This was happening while the overriding sentiment towards the low benefits the nation taps from its livestock resource was one of resentment. The fact that the nation stands first in the size of its livestock population, but fails to benefit adequately from it, is a line that almost every Ethiopian could rightly state.

With the introduction of the PCDP, the EPRDFites have infused a new perspective to the debate. However, no new narration has yet appeared to change the popular line. And this has a lot to do with the absence of revolutionary results.

To go back to the numbers, the nation commands a total population of 54 million cattle, 25.5 million sheep, 24 million goats and 916,000 camels. The regional distribution of these resources is hugely uneven. Oromia tops the list in cattle, sheep and goats. Afar leads in camels.

A comparison with the benefits tapped from the resources, however, shows that the road ahead is far more though than simply changing perspectives. The total meat production in the country was only 605,000tns, in 2009/10, while the total milk production was 3.3 million tons. Out of the total 54 million cattle population that the nation commands, only 10pc was found to be an improved breed.

It certainly is dismaying to see such incongruence between the available potential and the rate of utilisation. A tough task lays ahead for the Revolutionary Democrats.

If the last three years could be used as evidence, however, the journey ahead will require a change in policy perspective. It calls for the alignment of policy instruments with problems on the ground.

As it stands, the livestock market of the nation is being governed by a proclamation that was issued 14 years back. The efforts to replace it with a more modern and comprehensive legal instrument have not yet materialised.

Livestock markets across the nation have changed so much, however. Well-informed market actors, constantly changing prices and increasing oligopolistic inclinations have become the orders of the day. Contraband trade has also evolved in its own way, becoming the foremost challenge of the sector.

Confusion reigns on the side of the regulators. Both the Ministry of Trade (MoT) and the Ministry of Agriculture (MoA) claim to have roles in regulating the sector. But none is seen taking bold measures to correct the structural problems in the market. Instead, they are seen pushing their respective bounds with the mere aim of standing tall within the overall regulatory matrix.

It is not clear where the bounds of one ends and that of the other starts. Thus, businesspeople involved in the sector are exposed to a volume of paperwork before making any successful transaction. Some even dare to call the cost they bear 'the cost of confusion'.

Another problem within the sphere that continues to hinder the growth of benefits the nation obtains from its livestock resource is the absence of internationally recognised quatrains. Exporting livestock and livestock products has become all the more costly in the absence of these establishments, which are essential in order to check the health of the animals. What makes the puzzle tricky is that importing nations have strict certification rules on animal and animal products.

Of course, the talk here is not about so many countries. As it stands, livestock export is limited to Saudi Arabia and Yemen. For a nation that used to export canned meat to Israel, Italy, Gibraltar, Malta, Greece and other countries, in 1957, this is nothing but a huge narrowing of the export regime. Revival is timely.

Addressing the various structural challenges of the livestock market will be essential to realise the ambition stated in the Growth & Transformation Plan (GTP). This entails increasing the total export earnings from the sector to around 250 million dollars a year by 2015. Any policy that is designed to realise the ambition is, therefore, expected to resolve these crucial bottlenecks in the sector.

Learning from their experience of realising ambitions, the EPRDFites ought to take decisive action in reformulating the guiding proclamation of the livestock sector in line with the current and future dynamics of the market. They should create a distinct institutional setup, build internationally certified quarantines and expand the export regime.

As much as these decisions require political commitment, the ruling Revolutionary Democrats ought to make sure that they leverage enough of it at the different tiers of the government. No doubt that the gamble in favour of solving the structural problems will play out to the advantage of both the economy and the EPRDFites.

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