Livestock Value Chain Management

Course Code: ABVM 342

By Bizuayehu Admasu (M.Sc.)

 1. Chapter One: Introduction to livestock
1.1. Livestock and livestock management

 The word livestock/ was first used between 1650 and 1660, as a compound word
combining the words "live" and "stock".
 Stock-means-supply for future use, some of money, movable property of farm.
 Deadstock is defined in contradiction to livestock as "animals that have died
before slaughter, sometimes from illness or disease".
 It is illegal in many countries, such as Canada, to sell or process meat from dead
animals for human consumption.
 Livestock are the domesticated animals raised in an agricultural setting to provide
drought power and produce commodities such as meat, eggs, milk, fur, leather,
and wool.
 It refers to animals that are raised by humans for various purposes, such as food,
fiber, work, or companionship.
 1.1. Livestock and livestock management……

 The term livestock is sometimes used to refer solely to animals who are raised
for consumption, and sometimes used to refer solely to farmed ruminants, such
as cattle, sheep, goats, and pigs.

 Horses are considered as livestock in the United States.

 The USDA classifies pork, veal, beef, and lamb (mutton) as livestock, and all
livestock as red meat.
 Poultry and fish are not included in the category.
 Livestock and livestock management....

 Livestock management involves managing farm animals and supervising farm

workers.
 It requires knowledge of animal science and animal husbandry, as well as good
business sense.
 Livestock management is the exercise of efficient, productive, and moral care-
taking of any agricultural associated livestock.
 The breeding, maintenance, slaughter, and general subjugation of livestock, is
known as animal husbandry.
 Concepts of livestock value chain

 Livestock value chain is the process of producing, processing and

distributing livestock and livestock products.
 It is a complex and interconnected system that involves a variety of
stakeholders, including producers, processors, distributors, retailers, and
consumers.
 Livestock value chain can be defined as the full range of activities
required to bring a product (e.g. live animals, meat, milk, eggs, leather,
fibre, honey, etc.) to final consumers passing through the different
phases of production, processing and delivery.
 It can also be defined as a market-focused collaboration among different
stakeholders who produce and market value-added livestock products.
 Concepts of livestock value chain management

 Livestock value chain management is the process of managing and

optimizing the entire process of livestock production, from the point of
production to the point of consumption.
 This involves identifying the key stages in the value chain, such as breeding,
feeding, processing, distribution and marketing.
 Each stage in the value chain can have its own challenges and opportunities,
and
 Understanding these is key to identifying leverage areas for technical and
policy intervention.
 1.2. Importance of Livestock

 Livestock is important as a major source of :-

animal protein,
Draft power power for crop cultivation,
means of transportation,
export commodities,
manure for farmland and household energy,
security in times of crop failure, and
means of wealth accumulation.
means to support and sustain their livelihoods
 Importance of livestock...

• Livestock play a vital role in the agricultural and rural economies of the
developing world.
• Not only do they produce food directly, they also provide key inputs to
crop agriculture.
• Most farms in the developing world are too small to justify owning or
using a tractor, and the alternatives are animal power or human labor.
• For many smallholder farmers, livestock are the only ready source of cash
to buy inputs for crop production - seeds, fertilizers and pesticides.
 Importance of livestock...

• Livestock income also goes towards buying things the farmers cannot make for
themselves and that includes paying for school fees, medicine and taxes.
• Income from cropping is highly seasonal.

• In contrast, small stock, with their high rates of reproduction and growth, can provide
a regular source of income from sales.
• Larger animals such as cattle are a capital reserve, built up in good times to be used
when crops are poor or when the family is facing large expenses such as the cost of a
wedding or a hospital bill.
 Importance of livestock...

 Generally, livestock provides:-

 Social and cultural functions

 Subsistence function

 Used for food production (milk and meat)

 Used for traction power

 Used for manure

 Wealth reserve and prestige value

 Income source
 1.3. Livestock Contribution
 The livestock sector contributed
 up to 40% of agricultural GDP, nearly 20% of total GDP, and 20% of
national foreign exchange earnings in 2017 (World Bank, 2017).
 Employment opportunities
 Value-added and allied activities
 social, cultural, and environmental values
 Livestock Contribution...

• The livestock sector is an important subsector of Ethiopia’s economy in terms of

its contributions to both agricultural value-added and national gross domestic
product
• Livestock are part and parcel of the Ethiopian agriculture.
• Ethiopia has an agriculture-based economy from which close to 85% of the
population derive their livelihood.
• The diverse ecology of Ethiopia makes the country the home for large populations
of different domestic and wild animals with considerable contributions to the
national economy.
 Livestock Contribution...
 The various products and by-products, drawn from livestock sector, play a crucial role in
the livelihood of the farmers in the country.
 This sector contributes 45 % of the agricultural GDP, and 19 % to the export earnings.
 Much the same can be said for the livestock contribution to exports.
 Livestock and livestock products are the major foreign exchange earners, only second to
coffee, with hides and skins contributing the most.
 Livestock exports accounted for close to 14% of the value of agricultural exports, of which
96% came from hides and skins.
 Although live animals make a considerable contribution to the economy in terms of export
earnings, a large number of the country’s ruminants have been traditionally smuggled to
neighboring countries.
 Cont...
• Given Ethiopia’s long, porous border, a large number of cross-border exports
also go unrecorded.
• The total unofficial exports of livestock were worth twice as much as the official
record of $150 million. If the unofficial export figures are right, this means that
the livestock sector would have accounted for about 30 percent of the country’s
total exports of $1.5 billion
• At the household level, livestock plays a critical economic and social role in the
lives of pastoralists, agro-pastoralists, and smallholder farm households in the
central highlands.
• If the contribution value of animal traction, transport and manure are taken into
considerations, the share of livestock to GDP would be higher.
• About 80% of Ethiopian farmers use animal traction to plough their fields.
 Cont...
• Agriculture is the main stay of Ethiopian economy contributing about 43% of the
GDP, 80% of employment and 90% of the export market
• Ethiopia has one of the largest livestock population in Africa with a national herd
estimate of 53 million cattle, 46.8 million sheep and goats, and 9 million pack
animals.
• All livestock currently support and sustain livelihoods for 80% of all rural Ethiopia
• Of the total livestock population , majority are within the mixed-crop livestock
system and 35– 40 % of all are located in the pastoral areas.
 Livestock Contribution...
• The credit or financing benefits of livestock derive from the ability of livestock
owners to dispose of their animals for particular purposes at a time that they choose
– their ability to ‘cash in’ on the value of their animals as needed.
• This flexibility gives livestock owners ready access to money without the need to
borrow and confers an additional financial benefit beyond the sale, slaughter or
transfer value of their livestock.
• This additional financial benefit can be estimated as the opportunity cost of rural
credit – what it would otherwise cost a livestock owner to obtain funds comparable
to those produced by liquidating a part of the herd.
• With economic growth, consumption patterns tend to change toward high-value,
high-protein foods those derived from livestock.
• This implies that, given the economic growth in Ethiopia the market demand for
livestock and livestock products will continue to grow.
 1.4. Livestock Farming Systems
Livestock Production Systems in Ethiopia
 There exist three main livestock production systems
1. The mixed crop-livestock system
2. Pastoral/agro-pastoral livestock production
3. Urban/peri-urban livestock production
 Additionally, some livestock such as dairy cattle and beef are managed under
private/commercial and state/public farms.
 However, their number and contribution to livestock output is too small. Examples
include:
 Ranches (breeding stations, research stations, University/other institute farms)
 Large scale commercial farms owned by private investors
 1. Mixed—Crop Livestock production system

• is the dominant livestock production system in the Ethiopian highlands.

• Crops and livestock play interdependent roles, with livestock providing
draught power and manure for crop agriculture while crop residues provide
feed for the livestock.
• Livestock follow crops as the means of livelihood
• Cattle are the most important livestock species in this system because they are
used for ploughing, threshing crops, and providing manure.
• Sheep, goats, and poultry are also important sources of income, meat, draft
power, and manure. Some farmers keep one or more improved cows for milk
production
• Due to the emphasis on crop cultivation, the number of livestock kept per
household in mixed farming areas is low.
 1. Mixed—Crop Livestock…
 Different livestock species are often kept in separate places, such as
 an open barn for cattle and equines (horse, donkey, mules) and
 a small barn for small ruminants and young calves;
 sharing of the living space in the house at night with livestock is common
 Children are involved in herding and watering of livestock;
 Women are responsible for collecting water, milking, milk processing, selling milk
products, cleaning the barn or animal shed and looking after calves and sick animals
and feeding cows and
 Men are mainly responsible for feeding the livestock with hay and crop residues,
breeding and marketing of animals, feeding oxen, and taking animals to the
veterinary clinic.
 Mixed—Crop Livestock …

 Livestock production in the mixed farming system is limited by several factors:

 declining availability of grazing lands due to human population growth and
increasing crop cultivation areas;
 poor production and reproductive performance of animals; and
 lack of or inadequate access to technologies
 The average farmland per household is 1.4 ha in Lemo district (Hadiya zone), one
of the densely populated areas in the (SNNPR) and 4.5 ha in Bale, a less densely
populated area in Oromia.
 Land holdings per household are relatively smaller in northern and central highlands.
 A summary of livestock species in the mixed crop-livestock system, purposes of
keeping livestock given below…..
 1. Mixed—Crop Livestock …CONT..
Purposes of
Livestock Major Constraints for All Types of
Keeping
Species Livestock
Livestock
Draft power, manure,
Cattle
meat, milk, cash 1. Shortage of feed, both in quantity and
Meat, manure, quality
Sheep 2. Insufficient and inefficient artificial
wool/fiber, cash
insemination (AI) service (only for cattle)
Goats Meat, manure, cash 3. Diseases and parasites
Poultry Meat, eggs, cash
4. Lack of veterinary clinics or shortage of
facilities and drugs
5. Unsatisfactory credit service
Draft power,
Equine 6. Lack of awareness about productivity
transportation
improving technologies
7. Lack of motivation to increase productivity
due to other priorities.
 2. Pastoral and Agro-Pastoral Systems
 are the second most dominant systems in Ethiopia and they are mainly in southern
and eastern parts of the country in Afar, Somali, Southern Oromia (Borana), Kereyou
in East Shoa and South Omo in SNNPR.
 There is no crop production in the pastoral system, but agro-pastoralism is
characterized by dominance of livestock husbandry and limited crop production.

 Transhumant systems that involve the seasonal movement of animals from mixed
crop livestock systems to highland and lowland rangelands, such as in western Tigray
and Amhara regions, are also categorized under agro-pastoral system.
 These production systems can be categorized as extensive livestock management
systems with low-input and low-output.
 2. Pastoral and Agro-Pastoral…Cont..
 In southern pastoral and agro-pastoral areas of Ethiopia (Borana zone of
Oromia and Liban zone of Somali), cattle are the most numerous species,
followed by goats, camels, and sheep, with means of 21.1, 13.8, 9.8, and 9.5
animals per household, respectively.
 In contrast, in Afar and Somali pastoral areas, camel followed by goats and
sheep are the most important animals.
 Livestock is a means of livelihood for 90% and 93% of households in Borana and
Liban,
 Sales of animals, animal product and crops contributed 75%, 60%, 5% of
household income in Borana and 80%, 37%, 10% of household income in Liban,
respectively.
 3. Urban/peri-urban livestock production system

 is practiced on market-oriented dairy and poultry farms in urban and

peri-urban areas, where exotic breeds or crossbred animals are mainly
kept for their high performance.
 involves relatively high inputs and technology.
 The fluid milk produced is channeled to urban dwellers, restaurants and
cafes, or milk processing plants.
 The main feeds available for urban dairying are crop residues, hay, and
industrial byproducts and some farms devote land to produce improved
forage.
 3. Urban/peri-urban livestock production system...

 Free grazing is limited due to lack of land, and thus stall feeding is common.

 Factors that limit the development of urban dairying in Ethiopia includes:-

Shortages of feed and high feed prices,

disease incidence,

lack of land/space,

shortage of genetically improved heifers for expansion,

limited market outlets and

seasonal fluctuation in demand for milk and meat

 Similarities and differences of livestock production systems
in Ethiopia
 The three livestock production systems have their own peculiar
characteristics in terms of:
– Geographic distribution and climatic conditions
– Main feed and other resources/inputs for livestock production
– Primary functions of livestock to farmers
– Type of main livestock species/breeds
– Integrations with other farming/non-farming activities
– Market orientations and
– Major problems/challenges and opportunities

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 1. Geographic distribution and climatic conditions
 The mixed crop-livestock system:
– Prevails in the highlands of Ethiopia (>1500 masl)
– Occupy about 60% of the agricultural land
– Soil, vegetation, temperature are conducive for agriculture
– It is a rain-fed system, relatively has more rain intensisty
 The pastoral/agro-pastoral system :
– Prevails in the arid/semi arid low lands areas of Ethiopia (<1500 masl)
– Less crop agriculture practiced due to erratic rainfall, soil type, and less vegetation

 Urban/Peri-urban: in main cities/towns

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 2. Main feed and other resources/inputs for livestock
 Feeds in the mixed crop livestock are:
– Crop-residues, aftermath,
– Communal/private grazing pasture and fallow land
• Based on grazing type we can sub-classify the system into
– Zero-grazing/cut-and carry system
– Free grazing/communal grazing system

 Feed resource under the pastoral/agro-pastoral system is communal range

resource/pasture
– Feeding system could be through complete nomadism, trans human, and/or
semi-settlement
 Main feed resources for urban system are purchased feeds including crop-
residues, hay, industrial by products and kitchen by products ,
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 3. Primary functions of livestock to farmers
 Main cattle type of importance in the mixed system is oxen-for traction purpose.
Milk is secondary, but used mainly for family consumption. Cattle have also
additional role for income generation (such as from butter and live animals sales),
as asset values and for other social functions

 In the pastoral system, milk is the main product (for family consumption). The
asset value and cultural role of cattle is also important. Main export meat/beef
comes from this system (foreign currency).

 Dairy cattle under the urban/per-urban system is mainly for income generation
from sale of milk/products either as sole/part time jobs for urban dwellers.

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 4. Type of main livestock species/breeds
 In the mixed system, cattle, sheep, goats, donkey and horses are commonly
managed together (but with varying levels)
– Cattle are dominant species
– Cattle of indigenous breeds dominate over exotic/cross bred animals

 In the pastoral areas drought tolerant species such as camel, goats and cattle
are more common (all ingenious breeds)

 In the urban/peri-urban systems- farmers usually keep crossbred HF and

sometimes Jersey breeds

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 5. Integrations with other farming/non-farming activities
 The mixed systems is highly integrated with the crop farming. The level of
integration could be mutual or competitive
– While crop residues are important feed resource for cattle
– The role of oxen for traction and manure as fertilizer comes from livestock side
 Competition for land (grazing pasture) and family labour exist

 There exist no integration/interactions between crop-and livestock in the pastoral

system and in the Urban system

 Competitions for labour and land may exist for the urban dairy as most dairy
owners also have other non farm activities

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 6. Market orientation
• Overall the livestock sector in Ethiopia is of subsistent oriented ...with very
few commercial livestock producers.
• Income from livestock is from surplus products, when animals are culled or
when farmers need cash for their needs.

• Relative to the mixed and pastoral systems, the urban and peri-urban
dairy is a market oriented system.

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 7. Major problems/challenges
• MIXED: Major problems /challenges of livestock production in the mixed
system includes, shrinking pasture land trend due to crop-land expansion,
rainfall intensity in some areas, labour competition with crop activity, distance to
market, low management etc

• PASTORAL: Major problems of the pastoral areas includes decline in range

production/productivity due to climate change and livestock population/grazing
density, conflict among tribes for feed/water, poor access to infrastructure and
distance to market, low service (including extension) etc.

• URBAN: Price sensitivity for input/output market, sensitivity to productivity of

cows, land availability, zoonotic diseases, waste disposal and interest of
neibours/ municipalities in cities.

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 8. Opportunities
• Mixed: the by products from the crop-agriculture (crop residues)
and other integrations for services

• Pastoral: large pasture area and livestock species which are

adapted to the region

• Urban/peri-urban: market proximity, availability and better

access to industrial feeds/concentrates, services such as Vet.

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 1.5. Status and challenges of livestock production
• The overall livestock production constraints were feed shortages, livestock diseases,
low genetic potential of indigenous livestock, lack of marketing infrastructure and
water shortages.
• Generally, constraints mitigating successful animal production development revolve
around the absence of clear livestock sector development policy and strategy.
• Specific constraints prone to the efficient development of the sector include lack of
proper statistics or inadequate knowledge of the livestock resource, under and
mal nutrition of the existing livestock, prevalence of animal diseases, poor market
development and low genetic potential of indigenous animals for specific product.
• Less attention given to develop known local breeds of animals in the utilization of
adaptive characteristics should also be considered important draw back.
 Generally, These are the major challenges identified in livestock
farming systems:
– lack of pasture and quality feed,
– scarcity of water resources,
– climate change,
– undeveloped breeding and management of livestock,
– poor marketing and trade, and
– socioeconomic constraints
 Challenges of livestock production...
• Contributions of ruminants to the global warming, like methane gas
• Low resource use efficiencies, e.g, production of proteins through use of a
unit of water via vegetables is much higher that through dairy, dairy is much
higher than beef.
• Competition for resources between other activities (land, nutrient, labour etc)
• Some consumers prefer vegetarian diets due to health concern with ASFs
• Genetic erosions
• Climate change, hence resource depletions
• Global market competitions (industrial versus smallholders)
 Opportunities of livestock development
 Ruminates ability of converting inedible materials (to human) such as grass,
into more valuable food (meat, milk)
 Special nutritional merits of animal source food, quite large number of amino
acids, vitamins and some other essential nutrients can be found
 Their ability in nutrient recycling, through manure contributes to suitability
the environment
 Some species are involved in the food production process through their
services (drought power)
 Contributes (directly and indirectly) to the food needs of the ever increasing
population
 Income, profit, and job opportunities

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 Thank you!

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