Value chain analysis of sheep in Horro district of Oromia Region, Ethiopia

G. Duguma, K. Degefa, T. Jembere, W. Temesgen, A. Haile and G. LegeseMulti-stakeholder Workshop for Targeting Action Research on Small

Ruminant Value Chains in Ethiopia

Addis Ababa, 14th-15th March 2013

Objectives

To identify major constraints and

opportunities that influence development

of sheep value chain

To suggest key intervention areas for

intervention

To document important elements and

modalities of market strategies to

develop sheep value chain

Major findings – map of core functions

Input supply Production Marketing Processing Consumptions

Supply of:

Breeding

stock

Veterinary

services

Feeding

Herding

Housing

Breeding

Collection

Transporting

Feeding

Selling

Slaughtering

Frying / cooking

Meat retailing

Chilling

Treating

Packing

Consumption

Hotels, butch

eries,

E. abattoirs

DLHA, B

ARC, ICR

DA, ILRI

Traders

Smallholder

Framers

Farmers,

Collectors,

Traders

E. abattoirs

Consumers

Foreign

Domestic

10 %

H. Shoxi

15 %

10 %10 %

20 %

15 %

10 %

80 %

10 %

50 %

25 %

20 %

10 %

30 %

Sheboka

Major findings – market routes

Gaba

Sanbata

Saqala

Bahirdar

Fincha’a sugar

factory

Shambu

Harato

Baqale

Dongoro

Jare

Bako

Addis

Ababa

Nekmete

Anger

Gute

Sire

Export

abattoirs

Fincha’a

town

Hig

h w

ay to

B

ah

ird

ar

Major findings – market channels and volume of

animals flowing through the different channels

Major findings – major channels

• Six major sheep marketing channels identified:

– Channel 1: Sheep slaughtered at hotels

– Channel 2: Sheep slaughtered at butcheries

– Channel 3: Sheep purchased by individual consumers

– Channel 4: Sheep purchased to Addis Ababa markets

– Channel 5: Sheep purchased by other farmers for

breeding purposes

– Channel 6: Sheep slaughtered at export abattoirs

Major findings – market margins

Marketing

cost

Marketing

margin

Net margin Producer’s

share of

final price %

Proportion

of value

added (%)

Channel 1 292.2 531.75 239.55 55.0 27.8

Channel 2 190.95 223.0 32.05 70.0 4.9

Channel 4 16.45 250.0 233.55 60.0 21.2

Channel 6 87.5 256.9 169.4 57.0 25.2

Different animals are required by the different market actors:

• Channel 1 & 2 mature barren ewes and some times

castrates

• Channel 4 mostly castrates

• Channel 6 young with good body condition

Major findings – constraints

Input supply

Shortage of veterinary drugs

Shortage of skilled technicians (6)

Lack of transportation facilities

Production constraints

Feed shortage (seasonality of feeds) (1)

Poor/traditional housing

High incidence of liver fluke and lice infestation (2)

Knowledge /skill on market oriented sheep production and management (4)

Market constraints

Transportation problems – road problem

Limited access to market information and low bargaining power (3)

Animal theft and gaps in the law to penalize the criminals

Shortage of consistent supply of quality sheep and multiple taxation (5)

Lack of vertical linkage (8)

Weak horizontal linkages (7)

Seasonality of demand for sheep

Major findings – opportunities

– Population size and the ecological niche /geographical

locations the breed inhabited

– Market access and conduciveness of the areas for

sheep, other livestock species and various crops

– Production & reproduction performances of the breed under

good managemnt– respond well to supplementary feeds

(150-200g/h/d)

– An increasing demand for live sheep and sheep meat

– CBSBP and the possibility of scaling up CBSBP to wider

areas

– Gov’ts commitment and support to increase export of meat

– The involvement of international institutions

(ICARDA, ILRI, BOKU, etc)

– The presence of higher learning institutions in the areas

– Skilled and enthusiastic research staff

Conclusion

• Both domestic and export markets prefer young and fattened animals

• However, due to the following factors producers are not benefited

from the huge sheep population

– The existing production system is not market oriented – poor

quality animals, supply is inconsistent

– Shortage of feeds particularly during dry seasons

– Animal health problems (liver fluke, lice infestation, etc.)

– Lack of flexible credit system

– Seasonality of demand for sheep

Source: Duguma et al. (2012, unpublished)

Recommendation

• Strengthening and scaling up of the CBSBP – to ensure

continuous supply of quality animals

• Use of fattening technologies

• Provision of training to producers and extension

workers on market oriented sheep production and

management

Strengthening of breeding and marketing coops

Training community-health workers

• Strengthening horizontal linkage among farmers to

improve their exchange of breeding stock and their

market supply

• Conservation and wise utilization of crop residues

• Assigning skilled manpower

Provision of transportation facilities

Future plan

• Interventions based on recommendations

resulting from the study

– e.g. well conditioned/fattened animals are

needed both for domestic and export

– Seasonality of feed and market

• Strengthening, scale up & scale out the

CBSBP

• Strengthening of the breeding and marketing

coops

Acknowledgment

• USAID for the financial support through the

Africa RISING Program

• BARC – for financing the project in terms of

staff time

• ILRI (Dr. Alan Duncan) for the support and

collaboration

• To the smallholder farmers, hotel

owners, butcheries, traders, export abattoirs

and others for their cooperation in providing

necessary information