Marketing Chain For Live Animals In Somalia ILRI Discussion Paper No 13

106 Pages·2009·1.88 MB·English

Towards Improving Livestock Export Marketing
Support Services in the Somali Context: Survey Findings
and Implications
Asfaw Negassa, Riccardo Costagli, George Matete, Mohammad Jabbar,
Samuel Okuthe Oyieke, Mohamed Hassan Abdulle and Amos Omore
TERRA NUOVA
Funded by the EC and Danish Government
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project
Discussion Paper No. 13
Improving Market Opportunities
INTERNATIONAL LIVESTOCK RESEARCH INSTITUTE
April 2008
TERRA NUOVA
Funded by the EC and Danish Government
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
Towards Improving Livestock Export
Marketing Support Services in the Somali Context:
Survey Findings and Implications
Improvement and Diversifi cation
of Somali Livestock Trade and Marketing Project

Asfaw Negassa1, Riccardo Costagli2, George Matete2, Mohammad Jabbar1 ,
Samuel Okuthe Oyieke2, Mohamed Hassan Abdulle2 and Amos Omore3
1. International Livestock Research Institute, Addis Ababa, Ethiopia
2. Terra Nuova Eastern Africa, Nairobi Kenya, Box 74916, 00200 Nairobi
3. International Livestock Research Institute, Nairobi Kenya
Discussion Paper No. 13
Improving Market Opportunities
April 2008
TOWARDS IMPROVING LIVESTOCK EXPORT MARKETING SUPPORT SERVICES IN THE SOMALI CONTEXT: SURVEY FINDINGS AND IMPLICATIONS 1
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
Cover picture: The business environment in a typical Somali livestock market
(Photo by Terra Nuova)
Publication Design: Lilian Ohayo
Disclaimer
This report has been produced with the fi nancial assistance of the European Union and the Danish
Government. The contents of this report are the sole responsibility of Terra Nuova and can under
no circumstances be regarded as refl ecting the position of the European Union and/or the Danish
Government.
Citation

Negassa A, Costagli R, Matete G, Jabbar M, Oyieke S. O, Abdulle M. H and Omore A. Towards
Improving Livestock Export Marketing Support Services in the Somali Context. Survey Findings and
Implications. Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project.
Discussion Paper No. 13. Improving Market Opportunities., ILRI PO Box 30709, Nairobi 00100, Kenya.
© ILRI 2008
2 TOWARDS IMPROVING LIVESTOCK EXPORT MARKETING SUPPORT SERVICES IN THE SOMALI CONTEXT: SURVEY FINDINGS AND IMPLICATIONS
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
Table of Contents
List of Tables 5
List of Figures 6
Acknowledgements 7
Executive Summary 9
1 Introduction 14
1.1 Background and Justifi cation 14
1.2 Objectives of the Study 15
1.3 Research Questions 16
2 Research Methodology 17
2.1 Selection of Market Chains and Secondary Markets 17
2.2 Selection of Types of Respondents and Samples 20
2.3 Development of Survey Instruments and Conducting the Surveys 21
2.4 Method of Data Analyses 22
3 Survey Results and Discussions 24
3.1 Marketing Activities and Requirements along the Market Chains 24
3.2 Personal and Business Profi les of Livestock Traders 24
3.3 Livestock Trading Practices 30
3.4 Sources of Market Information on Supply, Demand and Prices 34
3.5 Traders’ Knowledge of Live Animal Quality Requirements
for Export Markets and Grading System 40
3.5.1 Traders’ knowledge of live animal quality
requirements for export markets 41
3.5.2 Grading System practiced in selected markets 50
TOWARDS IMPROVING LIVESTOCK EXPORT MARKETING SUPPORT SERVICES IN THE SOMALI CONTEXT: SURVEY FINDINGS AND IMPLICATIONS 3
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
3.6 Relative Importance of Live Animal Quality Attributes 55
3.7 Determinants of Relative Importance Rankings of Live
Animal Quality Attributes 63
3.8 Relationship between Live Animal Quality Attributes
and Their Prices 63
3.9 Marketing Costs, Margins, and Gross Profi ts 67
3.10 Livestock Marketing Constraints 80
4 Conclusions and Recommendations 85
4.1 Livestock products grades and standards 85
4.2 Market information fl ow 86
4.3 Human capacity development 87
4.4 Development of physical infrastructure to reduce marketing costs 88
4.5 Observing rules that govern livestock export trade 88
4.6 Genetic characterization of breeds 89
4.7 Other supportive key interventions 89
References 91
Appendix
Appendix 1
Activities, Arrangements and Requirements along the
Somalia Marketing Chains (2006) 94
Appendix 2
Catchment areas/satellite markets for various secondary
livestock markets investigated in Somalia 96
Appendix 3
Relationship between Age, Grade and Price of Animals in selected
Markets in Somalia and Kenya: Results of Rapid Appraisal with Brokers 99
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Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
List of Tables
Table 3.1 Personal and Business Profi le of Livestock Traders in Somali 29
Table 3.2 Trading Practices of Livestock Traders in Somalia 33
Table 3.3 Frequency of Exporters Reporting their Sources of Information
on Prices, Supply and Demand Conditions in their Purchase Markets
in Somalia and Export Markets Abroad 35
Table 3.4 Frequency of Agents of Exporters Reporting Sources of
Information on Supply, Demand and Prices of Livestock in
Purchase Markets and Export Countries 37
Table 3.5 Frequency of Small Scale Traders Reporting Sources of Information
on Supply, Demand and Prices of Livestock in Purchase Markets
and Export Countries 39
Table 3.6 Frequency of Brokers Reporting Sources of Information on Supply,
Demand and Prices of Livestock in Purchase Markets and Export
Countries 40
Table 3.7 Percentage of Traders Aware of Live Animal Quality Attribute
Specifi cation Requirements in the Importing Countries 53
Table 3.8 Preferred Ages (years) of Animals in the Exporting Countries
According to the Surveyed Livestock Traders in Somali 54
Table 3.9 Preferred Weights (Kg) of Animals in the Exporting Countries
According to the Surveyed Livestock Traders in Somali 55
Table 3.10 Results of Non-Parametric Kruskal-Wallis and Mann-Whitney
Tests of Relative Importance Rankings for Live Animal Quality
Atributes 58
Table 3.11 The effects of Market Chain and Trader Types on the Relative
Importance Rankings of Live Animal Quality Attributes 59
Table 3.12 Results of Ordered-Probit Model Estimations of Factors Affecting
Relative Importance Rankings for Live Animals Quality Attributes 64
Table 3.13 Results of Hedonic Price Estimations for Selected Cattle
Quality Atributes 68
Table 3.14 Results of Hedonic Price Estimations for Selected Shoats
Quality Atributes 69
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Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
Table 3.15 Components of Cattle Marketing Costs by Market Chains in
Somalia (US $/ Animal) 75
Table 3.16 Livestock Taxes and Fees from Somaliland (Berbera), July 2001 76
Table 3.17 Livestock Taxes and Fees at export from Puntland (Bossaso) July 76
Table 3.18 Summary Statistics of Prices, Marketing Margins, Costs, and
Profi ts for Cattle by Market Chains and Trader Types
in Somalia (US $/ Animal) 77
Table 3.19 Summary Statistics of Prices, Marketing Margins, Costs, and
Profi ts for Shoats by Market Chains and Trader Types
in Somalia (US $/ Animal) 78
Table 3.20 Determinants of Cattle and Shoats Marketing Margins
in Somalia 79
Table 3.21 Percentage of Traders in Somali Reporting Problems in
Livestock Marketing 84
List of Figures
Figure 2.1 Somali Livestock and Livestock Product Marketing Chains 19
Figure 2.2 Distribution of Survey Sample Respondents along
Selected market Chains 22
Figure 3.1 Traders’ Relative Importance Rankings of Live Animal
Quality Attributes by Marketing Chain in Somalia 60
Figure 3.2 Major Constraints Identifi ed along the Livestock Marketing
Chains in Somalia 81
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Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
Acknowledgements
The International Livestock Research Institute (ILRI) and Terra Nuova are grateful to the
European Commission and the Danish Government for funding this study. ILRI and Terra
Nuova are also grateful and highly appreciate the efforts of the various institutions and
individuals who made this survey possible under diffi cult conditions.
In Somaliland, the Minister of Livestock Dr. Idris Ibrahim Abdi kindly granted authorisation to
conduct the study. Institutions which provided assistance for fi eld work include the Ministry
of Livestock, Commerce and Industry and Finance; the municipalities of Hargeisa, Burao
and Gabiley and other public bodies such as the Berbera Port Authority. Private institutions
such as the Chambers of Commerce, Industry and Agriculture of Somaliland and Puntland
also provided signifi cant assistance. The director of veterinary services Dr. Abdullahi Ahmed
Hassan, the Berbera Port Veterinary Offi cer Dr. Ahmed Aibe Warsame, the Gabiley District
Veterinary Offi cer Dr. Ahmed Hassan Bile and the Togdheer Regional Veterinary Coordinator
Dr. Issa Nur Liban are gratefully acknowledged for their valuable assistance in undertaking
the fi eld work.
In Puntland the Minister of Livestock, Agriculture and Environment Dr. Ibrahim Hared Ali
Da’ar kindly granted authorisation to conduct the study. The institutions which provided
assistance for fi eld data collection include the Ministry of Livestock, Agriculture and
Environment, Commerce and Industry, Finance and Ports and Marine Resources; the
municipalities of Galkayo and Las Anod; the Port Authority and the Chamber of Commerce,
Industry and Agriculture. Valuable assistance was provided by the Vice Minister of Livestock,
Agriculture and Environment Dr. Yassin Ali Abdulleh, the director of the Animal Health
Department in the Ministry of Livestock, Agriculture and Environment Dr. Mohamud Hassan
Ismail, the Mudug Regional Veterinary Coordinator Dr. Mohamed Abdiqadir Hussein,
the Galkayo District Veterinary Offi cer Dr. Abdirahman Mohamed Jama, the Bossaso Port
Veterinary Offi cer Dr. Jama Mohamed Ali, the Technical Advisor in the Ministry of Livestock
Agriculture and Environment Mr Abdirahman Geyre and the Chairman of the Puntland
Livestock Traders Association Mr. Mahad Sahid Yusuf.
In central and southern Somalia institutions that provided assistance include the Ministry
of Livestock of the Transitional Federal Government, the Middle Shebelle regional
administration, and the district council in Afmadow. With authorisation granted by the
Minister of Livestock, Forestry and Range Dr. Ibrahim Mohamed Issaq, relevant support in
TOWARDS IMPROVING LIVESTOCK EXPORT MARKETING SUPPORT SERVICES IN THE SOMALI CONTEXT: SURVEY FINDINGS AND IMPLICATIONS 7
Improvement and Diversifi cation of Somali Livestock Trade and Marketing Project Discussion Paper No. 13
the implementation was also provided by the Jowhar livestock market supervisor Mr. Gedi
Malim Ali and the Administrator-Logistician of the Trans-boundary Environmental Project Mr.
Osman Omar Budul.
In Kenya, the Garissa County and Municipal councils, the District Veterinary Offi ce and
Livestock Production Offi ce in the Ministry of Livestock and Fishery Development, the
Kenya Livestock Marketing Council and the Livestock Traders and Marketing Society of
Kenya are sincerely acknowledged. Dr. Ahmed Hassan Ali Field Coordinator of the Trans-
boundary Environmental Project, Mr Madobe Hassan and Mohamed Mohamed Hussein
former Livestock Health Assistants in the Garissa District Veterinary Offi ce ably facilitated the
operations.
Last but not the least, the contribution of the Terra Nuova Somali Zonal fi eld experts’ namely
Ibrahim Omer Osman (Somaliland), Hussein Haji Aden (Southern Somalia) and Ahmed
Abdalle Mohamed (Puntland) in collecting data, and that of ILRI personnel particularly
Francis Wanyoike and Patrick Wanjohi in data management and analysis; and Booker Ouma
Ogutu in production of the survey thematic maps was highly appreciated.
8 TOWARDS IMPROVING LIVESTOCK EXPORT MARKETING SUPPORT SERVICES IN THE SOMALI CONTEXT: SURVEY FINDINGS AND IMPLICATIONS