Sheep value chain development in Doyogena District of SNNPR, Ethiopia:

Results of a rapid value chain assessment

Ashanafi MokonenMulti-stakeholder Workshop for Targeting Action Research on Small

Ruminant Value Chains in EthiopiaAddis Ababa, 14th-15th March 2013

Gen Intro …..Description of the study area…

4

Gen Intro …..

1.2. Study subjects

6Figure: FGD

2. Results 2.1. Map of the core functions

7

Processing

Marketing

Production

Feed

supply Veterinary

services Breeding

stock supply

Credit

Local consumption

Transporting

Slaughtering

Buying Selling Transportin

g

Feeds &

feeding Breeding Housing

Input supply

Consumption

Core

func

tions

Activ

ities

Acto

rs

Feed retailers

Producers Traders Veterinaria

ns Credit

institutions Transporte

Producers Extension

workers Traders

Traders Producers Transporte

rs Individuals

Traders Slaughters Transporte

rs Hotels

owners

Hotels Individua

l Producer

s Transpor

ters

Results …..2.2. Description of core functions1) Input supply

a) Feed supply: main source-farmer, also use industrial by products (market). One factory and 9 feed retailers, wheat bran oil seed cake

b) Veterinary service: supplied by both public and private, public trusted, illegal drug retailers. One vet technician serves 3-4 kebeles. Common diseases (ovine pasteurellosis, Pneumonia, black leg, foot and mouth disease, mastitis, anthrax, tenasaginata  and fasciolosis). Licenced by Zonal Agricultural Dep’t

c) Breeding stock: source of breeding stock is farmer/market, limited improved breed, but recently some intervention (Bonga Breed)

d) Credit services: No special credit service for L/stock. There is Omo micro-financea and there was HAB8

Results …..

2) Production: there are three activitiesa) Feeds and Feeding wet season (tethering and cut and

carry), dry season (free grazing and browsing) on grazing lands and crop after math.

• Feeding type depends on purpose of productionE.g. Sheep for fattening purpose fed tethered in the barn

(separated from other flock). More feed with better quality is given for fattening sheep than other flock.

Wheat bran is offered for fattening sheep whereas ‘’Hamicho’’ is given for both twin nursing ewe and fattening sheep.

Major feed types: natural grazing, fresh cut, browses, Amicho (Enset corm), tinny potato tubers and leaves ,Household feed scraps and residues , wheat bran, oil seed cake, oat forage and

local brewery by products. Better feed availability:

From June to September - in Bekafa kebele From October to January - Serara kebele

9

Results …..Figure 5. Average rainfall and feed availability for

both target kebeles

Jan

Feb

Mar

chApr

ilMay

June Ju

lyAug Se

pOct

Nov Dec0

20

40

60

80

100

0

1

2

3

4

5

Enset root Grass StrawBrowsing Bran & Cake GrazingCultivated forage HH feed residue VegetablesRainfall (score 0-5)

Fe

ed

ava

ila

bil

ity (

%)

Ra

infa

ll s

co

re (

0-5

)

10

Results …b) Sheep breeding Purpose : Insurance to secure cattle sell, cash income , for

slaughtering , as source of manureNo introduced breeds, Adilo breed: adaptive, horny, long (thin)

tailed, twin birth, fast growth and attractive coat color. No controlled mating practice Selection practice: Rams with longer height and larger size; ewes

based on their good mothering ability and twining, breeding age (1-2 years).

Lack of improved breeding ram and inbreeding problem

c) Housing No separate house (with in larger dwelling house). Type of house: wall -wood and plastered , roof -grass and some

corrugated iron sheet Lambs and fattening sheep stay in separate barn. Barn is cleaned

daily Less awareness on how shelter type affects productivity11

Results …3) Marketing

January

Febru

ary

March

April May

June

July

August

Septem

ber

October

November

December

0%2%4%6%8%

10%12%14%16%18%20%

0% 0%

15%

19%

13%

8%6%

13%

6%8%

4%

8%7% 7% 7%

17%

4%

17%

10%

13%

3% 3%4%

10%

Demand Supply

Months of the year

Prop

ortio

n (%

) So

ld in

eac

h m

onth

January

Febru

aryMarc

hApril

MayJune

July

August

Septem

ber

October

November

December

0

400

800

1200

1600

2000

Yearlings (male)Yearlings (female)Old ewesFattened sheepKids

Months of the year where different class of animals sold

Price

per

hea

d of

diff

fern

t cla

ss o

f ani

mal

(ETB

)

12Fig: Average prices of different classes of animals in different months of the

year as estimated by traders

Fig: Seasonality of demand and supply for sheep expressed as proportions sold in each moth

Results …Preferable months of selling sheep by farmers by farmers' proportion

13

Proportion (%) of buyers to whom farmers sell their animal in Sarara Kebele (A) and Bakafa Kebele (B)

Results …Common sheep marketing sites

Price determination Farmers (demand is high) and trader (Supply

high) Taxes: per animal tax is paid once (ETB 5)Demand and Supply trend for Sheep is

increasing Seasonality of supply and demand: High

supply (fertilizer, improved seeds, clothing and stationery for school children, household consumable items). High demand (religious and holidays)

14

Results …

15

Results …

4) Processing Slaughtering is the only processing activity done in the area. Processing (slaughtering) in the area is mainly done in

municipal slaughtering houses. The carcass which is processed at municipal slaughtering

houses directly goes to hotels and restaurants

5) Consumption In the study area, sheep are consumed by different types of

consumers. The sheep are mainly consumed by domestic consumers

either in the form of finished meat at hotels/butchers or buy live sheep and slaughter at home.

Farmers are also the other consumers that buy sheep for rearing and fattening purposes

16

Results …

6) Marketing routes

17

Dunna

Bakafa

Sarara

Hamacho Marie

Adilo

Keleto

Shashamane Angacha

Doyogena

Hadero

Durame

Shinshicho

Halaba

Fandida

Kosha

30%

10%

10%

40%

10%

80% 10%

15%

25%

10% 25%

15%

15%

15%

20%

20% 30%

20%

Addis Ababa Hosanna

Results …7) Marketing channel

18Fig: Sheep value chain mapping of the study area

80%

20% 10%

10%

20%

100%

80%

15%

5%

Export abattoirs

45%

Land tenure (access to land)

Security Rules and regulations Enabling

environments

Local Hotels & Butchers

Butchers & Hotels in Big cities

Individual consumers

Farmers (Breeding &fattening)

Foreign consumers

(export market)

Collectors

Small traders

Big traders (Adilo market)

Addis Ababa traders (retailers)

Small holder farmers

15 %

Marketing

Production

Input supply

Processing

Consumption

Veterinary

services

Extension services

Forage seeds & planting materials

Credit services

Feed Wheat bran Wheat midlings Oilseed cakes

Breeding stock Dorper rams Bonga rams

Individual consumers in Addis

and big towns

25%

%

15%

15% 100%

100%

5%

Weather condition

80%

10%

25%

Results …Channel 1: Sheep purchased by Hotels and individual

consumers

Channel 2: Sheep Purchased by sheep retailers/individual consumers

Channel 3: Sheep purchased by sheep fatteners and big traders (Adilo area)

Channel 4: Sheep purchased by farmers for breeding purpose

Channel 5: Sheep purchased by export abbattoirs19

Marketing cost and their proportions (%) of total cost for different market participants

20

Cost categoryProducers Collectors Small Traders Big Traders

Butcheries/Hotels

Individual consumer

Export abattoirs

Costs% TC

Costs

% TCCosts

% TCCosts

% TCCosts

% TCCosts

% TCCosts

% TC

Feed cost175.00

97.22 4.00 49% 10.00 38%     11.20 6% 2.00 11% 10 7.41

Vet cost 5.00 2.78 2.00 24% 5.00 19%       0%        

Barn cost                 2.00 1%        

labor cost                 0%     5 3.70

Search cost     0.20 2% 0.20 1% 0.40 1% 0.20 0%        

Spices                 82.00 45%        

Processing cost       0%   0%     20.00 11% 10.00 53% 80 59.26

Transportation     2.00 24% 3.00 11%35.0

0 69% 2.00 1% 5.00 26% 40 29.63Total Tax Payment         5.00 19% 5.00 10% 5.00 3%   0%    Loading and unloading         3.00 11%

10.00 20%   0%   0%    

Other costs (Rope)                 2.00 1% 2.00 11%    

Totla cost/head180.

00100.

00 8.20 1.00 26.20 1.0050.4

0 1.00 124.40 0.68 19.00 1.00 135 100.00

Results …8) MarginsA) Marketing channel to local hotels/resturarants Items Producers Collector Small Trader Hotels/

ButcheriesSelling price 800 975 1063 1234Total marketing cost   8.2 26.2 62.4Marketing margin   175 88 171Net margin   166.8 61.8 108.6Total cost 180 808.2 1001.2 1125.4Value addition 620 166.8 61.8 108.6Share of value added (%)

65 17 6 11

Producers' share of final price

  82.05 75.26 64.83

21

Results …

22

Margins….B) Marketing channel to Individual consumer at AddisItems Producers Collector Small

Trader Big traders Addis Abeba

Selling price 750 1000 1116 1234.00 1336.00 Total marketing cost 8.2 26.2 50.4 Marketing margin 250 116 118.00 102.00 Net margin 241.8 89.8 67.60 102.00 Total cost 180 758.2 1026.2 260.00 1234.00 Value addition 570 241.8 89.8 974.00 102.00 Share of value added (%)

29 12 5 49.25 5.16

Producers' share of final price

75 67 60.78 56.14

Results …Margins….

C) Marketing channel to local Individual consumersItems Producers Collector

Small Trader

Individual Consumer

Selling price 850 1150 1450 1600

Total marketing cost   8.2 26.2 19

Marketing margin   300 300 150

Net margin   291.8 273.8 131

Total cost 180 858.2 1176.2 1469

Value addition 670 291.8 273.8 131

Share of value added (%)

49 21 20 10

Producers' share of final price

  73.91 58.62 53.13

23

Results …

24

Margins….D) Marketing cannel to export abattoirsItems Producers Collector Small

TraderBig

tradersExport abattoirs

Selling price 750 800 875 960.00 1128.00

Total marketing cost   8.2 26.2 50.4 135.00

Marketing margine   50 75 85.00 168.00

Net margine   41.8 48.8 34.60 33.00

Total cost 180 758.2 826.2 925.40 1095.00

Value addition 570 41.8 48.8 34.60 33.00

Share of value added (%) 79 6 7 4.98 4.75

producers' share of final price   93.75 86 78.13 66.49

Constraints and opportunities

Constraints 1) Input supply

Feed problems (land shortage, high feed price, lack of improved forage)

Breeding problems (inbreeding pbm, shortage of breeding ram)

2) Production Lack of training on improved sheep production (feeding,

breeding, housing) Credit problem (no special credit arrangement for

l/stock) Land shortage for feed production (conversion of grazing

land to cropping)

3) Marketing Shortage of working capital Multiple tax Transportation problem25

Constraints and opportunities

4) Week relationship among actors in the VC

5) Credit and working capital problem

6) Lack of technical skill/awareness (SMS, DAs)

7) Problems related to rules and regulations (multiple taxation)

8) Nature related constraints (Drought)

Opportunities Increased farmers interest to rear small ruminants Large sheep population Existence of many rural sheep markets in the surrounding area Increasing trend in sheep demand Establishment of private flour factories and feed suppliers Increased intervention by government and non-government

organization in sheep improvement26

Conclusion and recommendation

Conclusions The livelihood of farmers in the study area mainly depends on crop

and livestock production. Livestock contribution to the household income reaches above 30%. Adilo breed: adaptive, horny, long (thin) tailed, twin birth, fast

growth and attractive coat color. However, the management of sheep production is poor in terms of feeding, inbreeding problem, lack of rams for breeding purposes, limited access to veterinary services .

A number of constraints were identified that undermines the productivity of sheep (feeding pbm, breeding, lack of knowledge,…)

Support from different institutions (extension, credit, etc) is limited. The largest producers' share of final price is obtained from Channel

5: Sheep purchased by export abattoirs for export (66.49%).

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Constraints and opportunities Recommendations Introducing improved feed/forage technologiesProvision of training to farmers, DAs and

experts Strengthening community based sheep

improvement programsFormation of farmers’ cooperatives and

strengthening existing saving and credit associations

Supporting agricultural offices and marketing and cooperative office (Extension service)

Support the linkage among value chain actors Strengthening micro-finance institutions and

credit service

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