USAID/ETHIOPIA'S GLOBAL FOOD SECURITY RESPONSE (GFSR):

UNCLAS ADDIS ABABA 001861

SIPDIS

USAID FOR AFR CTHOMPSON, GANDERS, TDALTON
EGAT FOR JTURK, JYAZMAN
SD FOR JHILL, THOBGOOD
DCHA/OFDA PMORRIS, KCHANNELL
DCHA/FFP JDWORKEN, PMOHAN, PBERTOLIN
NAIROBI FOR CBUZZARD, PEWELL, SERVES, KSUNDSMO, WKNAUSENBERGER

E.O. 12958: N/A
TAGS: EAID PHUM SENV EAGR PGOV ET
SUBJECT: USAID/ETHIOPIA'S GLOBAL FOOD SECURITY RESPONSE (GFSR):
LIVESTOCK SECTOR IN ETHIOPIA

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Summary
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1. USAID/Ethiopia inaugurates a series of background pieces
profiling livestock, food security, Comprehensive Agriculture Africa
Agriculture Development Program (CAADP) status, private sector and
other topics related to GFSR. We hope these information sharing
cables will be useful in keeping the GFSR Washington, Nairobi and
other teams abreast of USAID/Ethiopia's progress on GFSR and be an
opportunity for the teams to raise questions on our strategy
development process.


2. This cable focuses on the livestock sector in Ethiopia and makes
initial recommendations on its role in USAID/Ethiopia's GFSR
strategy. The Global Food Security Response (GFSR),includes
livestock and livestock products as staple foods. Ethiopia has the
largest livestock population in Africa. In Ethiopia, livestock
products for consumption and sale form a significant part of the
household nutrition intake, and their sale constitutes a major
proportion of the household income.


3. USAID/Ethiopia supports a combination of livestock programs
aimed at improving productivity, processing, marketing, and private
sector involvement in the livestock sector. GFSR will provide
USAID/Ethiopia with the opportunity to build upon successes by
scaling up and implementing new and innovative livestock programs to
address ongoing constraints in the sector.

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Role of Livestock in Ethiopia's Economic Development
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4. Ethiopia has the largest livestock population in Africa.
According to the Government of Ethiopia's (GoE) Central Statistical
Agency (CSA),there are approximately 40.4 million cattle, 20.7
million sheep, 16.3 million goats, 2.5 million camels, and 32.2
million poultry. They are a major part of the country's
agricultural production and consumption systems. Livestock play a
significant role in food security by providing milk, meat, butter,
eggs, blood, draught power, manure (fertilizer),and transport.
Livestock also play a vital social and cultural role and act as a
form of 'savings' since animals are seen as a moving capital base
and the returns on livestock production are far greater than saving
cash in a bank.


5. Livestock and livestock products contribute at least 40 percent
of Ethiopia's agricultural Gross Domestic Product (GDP) and 20
percent of the total GDP. The value of livestock is estimated to
constitute 9 - 12 percent of formal export revenue, but much higher
with non-formal trade included.


6. Pastoral areas, which predominate in eastern and southern
Ethiopia, account for almost 40 percent of the total livestock
population and there is significant cross-border livestock trade
between Kenya, Ethiopia, Djibouti, Sudan, Somalia and the Middle
East. Most of the inter-regional trade is informal but research
conducted by the Common Market of Eastern and Southern Africa
(COMESA) estimates that the value of this livestock trade exceeds
$60 million per annum.




7. In most parts of the rural highlands in Ethiopia which practice
mixed crop-livestock farming, the relationship between livestock and
crop production is immense with the oxen plow driving crop
production. Data from the GoE's CSA and the International Food
Policy and Research Institute indicate that 44 percent of small
scale agricultural holders use oxen plow. Additionally, livestock
manure is most commonly used as fertilizer and fuel energy.


8. Due to its importance in agricultural production, food security,
and the national economy, livestock, if given the appropriate policy
and financial support, can contribute significantly towards the
attainment of Millennium Development Goal One that strives to halve
hunger and poverty.

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USAID/Ethiopia's Support to the Livestock Sector
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9. USAID-Ethiopia supports livestock programs and activities that
increase livestock productivity, marketing and processing of
livestock products. Some examples follow:


- Through the sheep and goat productivity program,
USAID supports the introduction of better producing exotic breeds of
sheep (dorper) and goat (boer) from South Africa. The project is
cross-breeding the exotic breeds with local breeds, which will
benefit over 40,000 households. A best-practice breeding and
nutrition handbook has been developed and is widely used by
producers and government officials.

- USAID supports a private sector-led dairy
industry built on private investment that generates employment and
income for smallholder families. It uses a value chain approach that
includes milkshed development, supporting business development
services, strengthening market linkages and supporting co-operatives
and dairy processing plans. Dairy sales by assisted producer groups
are over $4 million, double the target.

- In order to increase meat and livestock exports USAID supports
strengthening sanitary and phyto-sanitary standards (SPS). SPS
certification and


quality management systems have been developed with training
provided to veterinarians, government officials, and exporters, and
trade delegations have been supported.

- Leather and leather products constitute
Ethiopia's fourth largest export revenue stream of the country.
USAID/Ethiopia, through the Agribusiness and Trade Enterprise
Program (ATEP),supports tanneries to compete more effectively in
the global marketplace, and in turn expand more purchases of raw
materials from rural producers and increase rural household incomes
from the sale of hides and skins. The project has attracted huge
attention from the GOE and been successful in securing orders of
leather products to the U.S.

- In the pastoral areas, through the Pastoralist
Livelihood Initiative (PLI) project, USAID supports the expansion of
community-based animal health services, improvement in
rangeland/water resource management techniques and establishment of
livestock market infrastructure to improve access to fair markets
and improve benefits accrued for producers.

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Lessons Learned
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10. The program outcomes and deliverables show that by adding value
to animal products sold by smallholder farmers, they receive better
prices and thus have a higher income. The estimated economic
benefits far outweigh the USAID annual investments.


11. Striking a balance between household livestock numbers and the
available land spaces is important. For example, in the highland
areas of Ethiopia, farmers have small land holding size and
livestock mobility is not feasible therefore increased livestock
numbers are not appropriate. Instead, farmers should focus on
increasing livestock productivity to achieve higher milk yields and
faster weight gain. This can be achieved through forage production,
use of improved genetics and farmer training.


12. USAID supported diversification of markets for pastoralists'
livestock has helped to re-establish strong livelihoods in program
areas. Traditional markets for sheep and goats through Somalia and
cattle through Kenya have been supplemented by access to formerly
remote domestic livestock markets in Ethiopia as well as chilled
meat and live animal exports. This has improved the bargaining
power of pastoralists, and therefore increased prices and improved
livestock based livelihoods.


13. Supporting the livestock economy in pastoral areas reduces
vulnerability and also spurs economic growth. Through a combination
of early de-stocking and maintenance of breeding herds in program
areas,
pastoralists have been able to better feed themselves during
droughts and more quickly recover viable herd sizes for economic
growth. These activities have now been adopted as best practices by
the GOE and can be expanded to all pastoral areas. Impact
assessments of USAID supported activities have already demonstrated
the effectiveness of early emergency response in maintaining
pastoralist livelihoods and reducing dependency on food assistance
(with cost benefit as high as 1:44). (Further details will be
provided in a subsequent cable on pastoralism and the GFSR.)

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Livestock and Climate Change Adaptation

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14. Early indications of the impact of climate change on Ethiopia
and the potential impact on agriculture are very worrying, arguing
for strengthened livestock development. FEWSNET forecasts that
within 10 - 15 years, one of Ethiopia's two harvest seasons will
drastically decline. The seasonal rains for the second harvest have
at least partially failed in eight of the last twelve years, and if
the long term prospects are for the disappearance of these rains, it
will have an enormous impact on Ethiopia's agricultural production.


15. Improved livestock production is one of the solutions to
balancing livelihoods. Livestock can help farmers in marginal areas
to manage risks and protect savings. Although vulnerable to long
term rainfall reduction and droughts, pasture and water supply are
more resilient to seasonal changes than crops. As lowlands
potentially become drier, pastoralist livelihoods will have to
adapt, with fewer, or more drought resistant, livestock in some
areas and the potential expansion of pastoralism to areas that can
no longer support crop production. For example, the Borena
pastoralists that used to keep cattle are now trying to change to
camels due to their ability to cope better in dry conditions.

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Livestock and Pastoralism in CAADP
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16. USAID/East Africa, through the Regional Enhanced Livelihoods in
the Pastoral Areas (RELPA) program, is supporting the Ethiopia
Comprehensive Africa Agriculture Development Program (CAADP) process
and USAID/Ethiopia has been an active participant in the CAADP
roundtable meetings and discussions. (Further details will be
provided in a subsequent cable on Ethiopian CAADP process and
content.)

-------------- Conclusions: Challenges
and Opportunities
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17. Despite the potential of Ethiopia's livestock sector as
USAID/Ethiopia's programs demonstrate (see paras 9-10 above),a
variety of constraints hinder livestock production, productivity and
marketing. These include, but are not limited to, inadequate and
low quality of animal feed, inadequate animal health services, land
degradation, unimproved animal breeds, policy and institutional
challenges such as excessive regulation, marketing and processing
constraints. USAID/Ethiopia's programs address many of these
constraints, but need to scale up its successes to begin to unblock
the bottlenecks.


18. The livestock and pastoralist sectors in Ethiopia are poised
for dramatic growth. The market demand for livestock products is
robust and growing, in Ethiopia, across the East Africa region and
the Middle East, due to population growth, urbanization, and
increased disposable incomes. Ethiopia's proximity to Middle East
markets, with their preference for natural rangeland livestock, has
potential to increase livestock exports and earnings.


19. The GFSR provides an opportunity for USAID to link livestock to
CAADP and Climate Change umbrella activities, both in the highland
areas and in pastoralist and agro-pastoralist areas. GFSR also
provides an opportunity to link the experience already gained by
USAID/Ethiopia in the fields of dairy development, meat and
livestock exports, value chain analysis, and breed enhancement to
multi-agency initiatives with the GOE on agricultural growth.


20. Under GFSR, USAID/Ethiopia plans to build on and scale up
successful models such as the Ethiopian Dairy Development, the Sheep
and Goat Productivity and Support to Livestock and Meat exports. The
concept of value chain analysis, value addition and processing of
the livestock and livestock products will form the basis of future
programming. The involvement of the private sector will be given
priority.


21. USAID/Ethiopia will also explore new opportunities that will
improve and increase livestock feed production systems, animal
health services delivery and coverage in the country. Opportunities
for improving camel production and processing of camel milk and meat
will be explored and scaled up.


22. USAID/Ethiopia will continue to support livestock meat exports
through new and innovative approaches, such as commodity-based
export systems that supply processed livestock products at
internationally recognized standards to importing nations as being
advocated by the Common Market for East and Southern Africa


(COMESA).


23. Specific livestock policy and institutional constraints will be
addressed through the Livestock Policy Forum of the Ministry of
Agriculture and Rural Development building upon pastoralist's
livelihood initiatives lessons learned on policy and institutional
changes that are supported by evidence base such as the
participatory impact assessments and cost benefit analysis.

GONZALES