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Division of responsibilities
Operational effectiveness
Strategy for restructuring
Strategy for divestment of commercial tasks
Management of privatization
Management structure
Strategy for the transition
Publicly funded veterinary
services are expected to be responsible for providing services
(i) where no free-market incentive justifies (or creates demand
for) a service, e.g. public health; (ii) where there is a
free-market incentive but there are economies of scale,
externalities, or professional or biological determinants that
dictate how best to deliver specific services, e.g. disease
eradication by area-wide vaccination; or (iii) when services are
provided based on the collective assent of the governed as to the
need for specific services and how much the public is willing to
pay (be taxed) for them, e.g. quality control of biologicals.
Where these principles do not apply, selected services can be
legitimately divested to the private sector.
Public sector veterinary services also direct their activities in accordance with national development policies for investment; equity of opportunity; poverty alleviation; food security; environmental protection; full employment; support for vulnerable groups; sustainable agriculture production; and other socially desirable goals. Should veterinary functions in support of national development policies not be fully commercially viable, many governments have chosen to subsidize their delivery.
One crucial
question when investment in animal health services is considered
is who benefits and who pays, e.g. will those who make the
investments reap the benefits or will others? However, national
governments will always have to carry the overall burden of
maintaining the health of the national herd.
Numerous fore and
publications (Cheneau, 1985; CTA, 1985a,b; FAO/RNEA, 1994;
FAO/RLAC, 1992; OIE, 1995; Umali, Feder and de Haan, 1992;
Schillhorn van Veen and de Haan, 1995; Leonard, 1987, 1993), have
considered the distribution of the different animal health
functions performed by the public and private sectors. A list of
services, derived from these and other publications, was
considered and modified at the Technical Consultation held by FAO
in March 1997. This list (which is not exhaustive), presented
below, is intended as a guide for consideration by governments;
it gives functions that could be considered as falling under the
responsibility of the private sector, remain under the
responsibility of the public sector, or are candidates for shared
responsibility and shared execution. The consultation recognized
the primary responsibility of the livestock producer for the
health of his/her animals; that the process of structural
adjustment is a dynamic one involving transitional periods; and
that all countries are different in their manner and stage of
implementation.
The criteria for assigning functions to the responsibility of one or the other of the two bodies were economic theory; technical judgement by national veterinary authorities; tradition; and prevailing sociocultural conditions within the various countries.
Services under the responsibility of but not necessarily executed by the public sector: ensuring the health of the national herd including disease surveillance, compliance monitoring, quarantine, quality control of remedies and vaccines, planning for emergencies and reporting to international bodies and neighbouring countries; oversight of food safety, import and export inspection and certification according to international standards; regulation, monitoring and support of other partners in the animal health care system; accreditation of personnel; creation of an enabling environment for the private sector; and general formulation of livestock development policy.
Functions under shared responsibilities: disease diagnosis and reporting; compulsory testing; accreditation; tick and tsetse control; food hygiene and inspection; continuing education and training; diagnostic support; animal welfare; notifiable disease control; disease emergency response; zoonosis control; research; and advice and extension.
Services under the responsibility of the private sector: clinical diagnosis and treatment; production and distribution of remedies and vaccines; artificial insemination; management of herd health and production programmes; marketing livestock and products; and others.
Public
veterinary services are generally targeted towards identifiable
clients (Ashley, Holden & Bazeley, 1996), but the clients
vary according to country. Chief veterinary officers (CVOs) in
European countries tend to view the urban public and food
processing industry as their main clients for regulatory and
quality control services that protect public health, guarantee
quality and avoid fraud. In African countries, CVOs see the
smallholder livestock owner as their primary client with the aim
of preventing losses from disease. In sub-Saharan African
countries where livestock productivity is low (see Table) it is
evident that either additional services are required or a more
rational delivery system needs to be found, or both, in order to
raise productivity.
Times change. In many
African countries there is now an abundance of trained animal
health professionals and paraprofessionals. However, focusing on
the wrong priorities, undertaking the wrong tasks, and decreasing
government operational budgets all limit the ability of public
sector veterinary services to deliver services appropriately.
Effective management under these financial constraints has often
been found lacking.
Macro-economic structural adjustment plans are being implemented by numerous countries in order to curtail domestic government spending, reduce national debt and control inflation. Restructuring of public veterinary services may sooner or later be the inevitable result of economic reforms. One major intention of restructuring is to allocate costs where benefits are expected, e.g. increased production is to be paid for by the livestock owners while overall environmental and public health aspects remain under government responsibility.
Livestock owners in some developing countries have recent memory of receiving a wide range of nominally free veterinary services. However, in most cases where goods and services must be paid for, livestock owners are readily persuaded to do so provided that these are consistently available, genuinely wanted, and perceived to be beneficial to the health of the animals and thus to enhancing the livestock owners' welfare.
A
government's operational capacity and effectiveness can be
improved by rationalizing the delivery of public good veterinary
services while divesting those services that can be
commercialized and that benefit individual owners of livestock.
The overall aim is delivery of efficient and effective animal
health services, with three parties directly involved, namely:
livestock owners and their animals, private animal health care
providers, and government agencies. A fourth group consisting of
the consumers for whose benefit animals are kept and their
products marketed is indirectly involved. From the consumer's
point of view, it is imperative that the concerted efforts of the
three other parties result in sufficient output of good quality
products at reasonable prices. One way to achieve this is by
focusing on what each party is best able to contribute, i.e.
livestock owners raising livestock; health care providers
delivering appropriate services; and government agencies securing
overall stability through regulation, monitoring and the
provision of an enabling environment.
Restructuring and
divestment free up funds for operations. Managers of public
veterinary services need to evaluate all tasks in order to (i)
determine which tasks can be commercialized or made contestable;
(ii) solicit potential providers of these commercial, contestable
tasks; (iii) reconcile items (i) and (ii) with professional
technical judgement and experience; and (iv) divest those tasks
that pass the filter of not being essentially in the public good,
or recognized as being non-contestable at that moment.
The public veterinary services must recognize the shift to a regulatory and a monitoring role implicit in the divestment of selected services to the private sector and in trends towards devolution. New roles will necessitate a new mix of skills among staff. In some cases a veterinary medical degree may not be required (such as for information management, laboratory testing, public relations). Alternatively, a veterinary degree is necessary as a first step towards technical specialization (toxicology, epidemiology, and so on). Opportunities for retraining are clearly needed. Salaries commensurate with the redefined responsibilities, enhanced skills, and to ensure integrity may be required to retain highly trained (and retrained) skilled staff. The new professional philosophy is that the public veterinary service needs to:
(i) focus on monitoring delivery of commercialized tasks to ensure that the public interest is fairly served, thus calling for a skilled, well-paid, non-corruptible civil service able to take on a regulatory role to ensure quality;
(ii) market and deliver effectively specific professional services generally recognized as non-contestable public goods, but for which the consent of the governed is continually required;
(iii) deliver high-quality and effective services and foster good public relations in order to maintain public support and funding;
(iv) provide effective in-service training for new public veterinary service staff and for those whose work is reoriented to ensure their ability to deliver effective services to the public;
(v) encourage veterinary professional associations to take on additional responsibilities for the continuing education of members and for promoting codes of ethics; and
(vi) establish an independent statutory body (veterinary registrar, council or board) that fairly represents the interests of all stakeholders, including consumers.
Commercialized tasks can be
identified as those where the public veterinary service already
charges fees, either officially or unofficially. Such tasks may
include mandatory vaccinations; clinical services for farm
animals or pets; surgery; clinical diagnosis and treatment;
laboratory disease diagnosis; breed improvement advice;
artificial insemination; pregnancy diagnosis; and advice on
feeding strategy or health maintenance. Additionally, liberalized
procurement and distribution of remedies, vaccines, chemicals and
equipment need to accompany divestment in order to give the
private sector greater and assured access to inputs.
The identification of functions or tasks already enjoying a high degree of commercialization, e.g. clinical diagnosis and treatment, leads to a consideration of their potential economic viability when implemented by the private sector. Further steps in the process are to carry out a macro-economic assessment of the public versus the private good nature of each task; identify potential economies of scale in delivering the task; look for the presence of externalities; and benefit from the experience of other countries to classify tasks further as candidates for divestment to the private sector.
Sound professional technical judgement based on biological characteristics of diseases, epidemiology and sound management must be used to reconcile candidate tasks with commercial potential. Knowledge and experience of disease agents and their control (the technology), model veterinary professional associations, principles of management and the sociocultural context in each country should be carefully assessed in the evaluation of candidate tasks for divestment. If such care is not taken, veterinarians are in danger of losing the privileged position historically afforded to the professions.
Chief
veterinary officers or a restructuring (transition) team can
publicize a roster of tasks and assets to be divested or
privatized in order to attract interested bidders. Accounting
information for enterprises, including a breakdown of costs and
gross revenues, indebtedness, plus the terms of management, lease
or sale, will have to be prepared and publicized (Babjee, 1996;
Baker, 1995). The cycle is repeated until only the essential,
non-contestable tasks remain with the public veterinary service.
Contestable tasks are divested for implementation by private
sector entities. Tasks identified as shared responsibility (see
Division of responsibilities, p. 3) can be contracted out to the
private sector under public monitoring and supervision.
Funding agencies, advisers,
and international organizations need to support the change in the
role of the public as well as the private veterinary services
during the transition process. In most respects, privatization
should be seen as a process that refocuses government veterinary
activities on achieving better services for the public and not
necessarily as a vehicle for reducing the real magnitude of
government expenditures and responsibilities.
In principle, veterinary tasks delivered by the private sector will be justified and offered when (i) financial conditions permit; (ii) enabling legislation reduces apprehension by would-be entrants; (iii) competition by the public sector is removed; and (iv) capital is available for new investors. The first three items are directly under the control of the government and require enlightened management by the public veterinary service, the transition team and concerned government bureaus, such as legal advisers. Capital (item iv) may be available as government loans, government-backed bank loans or private capital. Freezing the automatic hiring of all veterinary graduates gives a potent stimulus for the emergence of private veterinary practices (Wamukoya, Gathuma and Mutiga, 1995) while removal of unfair competition by the public sector is crucial to their early viability (Ilemobade, 1996; Wamukoya, Gathuma and Mutiga, 1995).
In areas with high potential for livestock production, for pet or mixed animal practice, or for development of private industry, private sector justified tasks can spontaneously be assumed under a market-driven system (Wamukoya, Gathuma and Mutiga, 1995). Special attention needs to be directed towards the provision of veterinary services in marginal areas where livestock producers are frequently among the nation's poorest. In such areas, purely commercial private goods and services may not be readily accessible and both private and public sector services may need to be subsidized if they are to be made available. However, private practitioners may offer better concrete (as opposed to theoretical) access to animal health services even in these conditions, but such an outcome depends critically on the way in which privatization is implemented.
Public sector responsibilities, e.g. disease surveillance and reporting, are no less required in marginal areas and can be carried out effectively through the use of contracts with veterinarians, animal health assistants (AHAs), animal health technicians (AHTs), and auxiliaries for their delivery. Simple contracts to undertake given tasks, such as vaccination of x number of animals, y number of hours of abattoir inspection per week (Fassi-Fehri and Bakkoury, 1995), can be awarded, thus making essential services available while enhancing the financial viability of private practice in low-potential areas. Numerous examples of pure subsidies (Quebec, Scotland, Sweden), incentives (Morocco, western Canada) or public service contracts (Morocco, Afghanistan) can serve as guidelines. Effective delivery of goods and services in low potential areas presents managerial and public relations challenges to CVOs. Funding agency support and guidance would be useful for continued experimentation and evaluation of delivery schemes, infrastructure development and in-service training.
The
judicious provision and use of credit by the private sector
requires careful planning. Examples (New Zealand, Kenya, Mali) of
prudent personal financial planning strongly suggest that taking
on a heavy debt burden in order to launch a private veterinary
practice is unnecessary and even contra-indicated. Normal banking
controls and time will determine the prudence of recent
donor-funded credit schemes for stimulating private practice
establishment in African countries. The use of informal loans,
credit from pharmaceutical distributors and personal assets all
appear to provide viable alternatives to formal bank credit.
Experience to date suggests that government decision-makers need
not be too concerned with the availability of credit provided
overall enabling policies are in place.
Efficient control of
disease outbreaks depends on the ability of local and national
veterinary authorities to receive information on animal diseases
quickly and to take immediate action in response. The risk for
critical delay of disease notification is increased when public
veterinary service staff are not a part of the line management
structure, particularly where there is decentralization and
animal health responsibilities are mixed with animal production
and extension functions, or where reporting in the field goes
through a non-veterinarian. Especially when veterinary systems
are devolved to subnational governmental units or are privatized,
the reporting of notifiable diseases needs to be a statutory and
ethical responsibility of all animal health care practitioners.
Likewise,
CVOs need assured access to the Minister of Agriculture or
Permanent Secretary, or their equivalent, in order to obtain
political support and funds with which to respond in emergency
situations. Emergency preparedness, including legislation, access
to funds, availability of human and other resources, and an
action plan, are essential in the control or eradication of major
epizootic diseases. National resources for emergencies are
especially important for securing collaboration from local
government authorities and private practitioners. Direct access
to politically responsible authorities greatly enhances the
two-way communication with officials who provide information
directly to the public. Public support is always needed for
carrying out disease control measures which can be difficult,
disruptive and financially disastrous for livestock owners. Rapid
access to information from the field is essential for informing
the public.
The overall objective of
restructuring of veterinary services should be to increase the
efficiency and effectiveness of animal health care delivery and,
consequently, livestock productivity; safeguard public health;
and contribute to national development. The end result should be
(i) a public veterinary service better able to carry out its
redefined responsibilities; (ii) a functioning private sector;
and (iii) the necessary supporting personnel and infrastructure
able to contribute to the overall objective.
The institution of a special transition team to plan and oversee the implementation of any restructuring process has been found useful. This team should be guided by an advisory council with stakeholder representatives including members appointed from the national veterinary service; the national treasury; the pharmaceutical industry; livestock producer groups; and consumer groups. Advice should be sought from countries that have successfully gone through a similar transition process. Should external funding be envisaged, representatives of funding agencies may be invited to be members of the restructuring council. An agreed negotiating framework (see Annex 2) may be used as a guideline for discussions and review of the restructuring process.
The Principles for rational delivery of public and private veterinary services with reference to Africa are recommended as a guide for restructuring and should be publicly debated. The principles will be based on economic theory and current biological understanding, and take into account sociocultural conditions prevailing in each country. Likewise, experiences of other countries with similar conditions need to be considered.
Stakeholders
should be informed of the outcome of deliberations for the sake
of transparency and be consulted frequently for their input.
Experience shows that only when there is free flow of information
and consultation as well as participation of stakeholder
representatives can a workable agreement for change be reached
(Till, 1995).