8. The success of any livestock development scheme depends in part on the broader development objectives pursued by a country and the corresponding government policies used to secure those objectives. Broad policy objectives of governments often include economic efficiency, economic growth, equity, food security, stabilization and inflation control, revenue generation and sustainability. Each of these objectives can be pursued through a variety of policy instruments including taxes, subsidies, tariffs and price controls. While some of these objectives and policy instruments are mutually reinforcing, in a number of cases they can conflict with each other. For example, the equity objective is often framed in the context of providing food (including milk and meat) at prices the poor can afford. If done by means of consumer subsidies, it may mean favouring the urban sector (rich and poor) at the expense of the rural population. On the other hand, if the supply of cheap food is achieved by paying food producers low prices, this may discourage domestic production which conflicts with the efficiency and other objectives.
9. Thus, a key consideration in any livestock development scheme is to understand the underlying development objectives and the policy environment within which the scheme will operate. Taking dairy development as an example, it may simply be that economic conditions, together with technology and infrastructure, have developed to the point that inherently stimulates a vigorous response in the dairy sector. Or it may be that dairy development is being driven by food security or self-sufficiency goals. Dairy development schemes that are driven by either food security or self-sufficiency goals will have different self-imposed strictures on the extent of dairy sector development with varying implications for producers and consumers.
10. A strict self-sufficiency goal implies that all dairy consumption must be supplied by domestic production. The opportunity cost of this option (i.e. the benefits foregone by not using the resources applied in dairy production in the best alternative) may be quite high and efficient economic growth may become jeopardized, particularly if the country does not have a comparative advantage in dairy production. On the other hand, a balanced food security goal based on careful analyses of trends in international trade and a country's comparative advantage may call for dairy imports to supplement domestic supplies. The implication then is that the trade-offs among objectives need to be recognized and carefully weighed in order to strike an appropriate balance among goals. At the same time, it will be necessary to consider how the livestock sub-sector fits in with the rest of agriculture and how consistent the natural and economic conditions are with an expanded livestock sub-sector. Such careful analysis will permit the identification of new policies that need to be instituted to promote livestock development as well as the removal of those policies hampering development. At this point, it is worthwhile to use an example from the West African region to examine how the economic policies pursued by governments have influenced the development of the livestock sub-sector.
11. Again, taking dairy production as an example, various studies (Mbogoh, 1984; Nwoko, 1986; von Massow, 1989) have shown that in West Africa, government objectives with respect to the dairy sector have frequently been pursued through the use of direct measures including consumer price controls, import tariffs, import licences, foreign exchange allocations and physical quotas on imports. Exchange rate policies while not directly targeted at the dairy sector, have also been cited as influencing dairy development through the impact of over valued currencies on consumption and production of dairy products.
12. A priori, some of these measures (e.g. high import tariffs, physical quotas and import licenses) can be expected to lead to high domestic prices which may in turn serve to stimulate domestic dairy production. Conversely, consumer price controls and over-valued exchange rates will tend to encourage imports and discourage domestic production. A related issue here is the surplus dumping of dairy products by producers of Western Europe and North America which has resulted in downward pressures on international prices of milk and other dairy products and availability of these commodities for importation on cheap commercial and/or confessional terms (food aid).
13. The combined effect of domestic and external influences on the dairy sector will differ across countries. For the region as a whole, it appears that the overall impact of domestic economic policies and surplus dumping by developed countries has resulted in an adverse impact on domestic dairy production. On the other hand, in West Africa as a whole dairy consumption has increased more rapidly than dairy production. While total dairy production grew at about 2% per annum between 1975 and 1985, the corresponding growth rate for dairy consumption was about 5% (Seyoum, 1988). In most countries production per capita has actually declined as production increases have lagged behind population growth. At the same time, consumption per capita has been growing at about 2% per annum. The growing excess demand has been met by imports. Total dairy imports in volume terms grew at an average of 10% per annum between 1975 and 1985. Over this period, imported dairy products in the West African region accounted for 45% of total consumption of liquid milk equivalents. The corresponding figures for individual countries range as high as 90% for Cote d'Ivoire, 85% for Ghana and 81% for Liberia. The imported dairy products were mostly dried milk (48%) and evaporated and condensed milk (44%) from EEC countries (Seyoum, 1988).
14. Ordinarily, it could be argued that given the high income elasticities of demand for dairy products and increases in population and per capita income, the huge imports of dairy products into West Africa should not come as a surprise. However, an analysis of the trends in West African milk consumption and dairy imports found that less than two-thirds of the increases in commercial dairy imports could be explained by increases in population and per capita income (von Massow, 1989). Von Massow (1989) found that economic policy in general, and inappropriate prices and over-valued exchange rates in particular, have stimulated dairy imports into West Africa beyond what was expected from growth in population and per capita income. Over-valued currencies tend to encourage imports and discourage exports. Thus, the production of export commodities are directly discouraged through lower prices and domestic production of imported commodities is inhibited by the downward pressure on their prices from imported goods.
15. Having briefly examined the impact of economic policies on some aspects of livestock development in West Africa, two questions might be posed at this stage:
(i) what should be the main policy objectives of smallholder cattle development schemes?(ii) what policies are needed to encourage and promote smallholder cattle production in West Africa in order to reverse the present dependence on imports?
16. Regarding the first question, the main aim of smallholder livestock development schemes should be a combination of increased production efficiency and adequate opportunities for sale of meat and dairy products at reasonable prices. Smallholder cattle development schemes should also aim at reducing risk and uncertainty in dairy production and incomes. In the absence of price stabilization policies and effective marketing information, price fluctuations may be large due partly to the perishable nature of livestock products (Pinstrup-Andersen and Slade, 1987). By reducing risk and uncertainty the contribution of livestock products to the incomes of producers will become more stable, thus ensuring the sustained interest of the smallholders.
17. In order to achieve these objectives, however, appropriate policies will be needed. This brings us to the second question. Pricing and marketing policies that will provide adequate incentives to smallholders to produce meat and milk within competitive cost structures are essential. Available evidence from other parts of Africa indicates that the price elasticities of supply for animal products are relatively low. For example, Rodriguez (1987) obtained a short-run supply elasticity of 0.6 for milk in the commercial dairy sector of Zimbabwe. This means that a 10% rise in milk price will induce an increase of 6% in milk output. Thus, given the existing level of technology, a substantial increase in output in response to rising prices should not be expected. A key point here is the production response which can be expected within the existing technology. The response may be very different, however, if the price rise stimulates adoption of new technology packages, which at the same time reduces cost per kg of output.
18. Overall, it is important for governments to implement appropriate pricing and marketing policies as well as provide facilitating institutions and infrastructure to encourage additional investment in livestock production to increase output. Some of the more important facilitating institutions include agricultural extension for providing information, education and training necessary to support technological change; veterinary and animal health services; efficient markets for inputs and outputs; credit institutions; and land tenure institutions.
19. The importance of these supporting institutions is illustrated by two specific examples of dairy development experiments: the first is the zero grazing project in Kenya. The Kenya projects seem to be viable and growing in numbers. The second is the cross-bred dairy cows introduced by ILCA in the Ethiopian highlands, which have not been sustained after ILCA's support was withdrawn at the end of the on-farm test period.
20. The zero-grazing system is a relatively complex system involving high producing dairy cows; appropriate building structures to facilitate feeding, sanitary milking, manure management, calf rearing, and animal health management; and high yielding forage (rapier grass) managed for maximum nutritional value and sustained by regularly applying manure from the stalls as the grass is cut.
21. This system has been introduced in various parts of Kenya including the coastal area where tick and tse-tse burdens are present. The systems are successfully operated by farmers with no previous experience with cattle. The confinement aspect of the system helps reduce the tick-borne disease and trypanosomiasis hazards to manageable levels.
22. The Kenyan zero-grazing system requires a high level of extension input over an extended period of time to teach the broad range of management skills required by the systems whether or not the farmers have previous experience with livestock. A regular supply of concentrate feeds is required as well as a ready market for the milk. Veterinary and breeding services as well as credit are required. Clearly, the zero grazing technology is not a viable technology without the existence of the supporting institutions and markets for inputs and outputs. With this support, however, the system offers great potential for increased dairy output, with significantly reduced inputs per unit of product leading to significantly higher incomes for small farmers.
23. In 1982, ILCA initiated a study to test a technology consisting of the integration of cross-bred dairy cows with improved forage production for farmers in the Ethiopian highlands near Debre Berhan research station (Gryseels et al, 1988). Over a three-year period 40 dairy test farmers (DTF) joined the experiment. The DTF participated in a group training course on forage production, dairy husbandry, animal health, and economics and marketing. The training course was provided by ILCA staff. The DTF adopted the dairy test package at their own risk and expense. Cross-bred cows were provided by ILCA with 50% cash down payment and 50% on credit. Improved cross-bred bulls were available at the ILCA research station. ILCA also provided veterinary services, supplementary wheat bran, and forage seeds at cost. The farmers themselves decided whether or not to accept ILCA's recommendation and paid cash or used short-term credit for inputs received from ILCA.
24. Results from 1983 to 1985 showed that cash income of the DTF were 120% higher than the control farmers. Farmers indicated satisfaction with the cross-bred cow and improved forage technology indicating higher income, regular cash flow and availability of milk for children as the main advantages. The test was concluded in 1986 and a follow-up survey was undertaken in 1987, 15 months after the end of the test period. The inavailability of continued institutional support after ILCA's withdrawal resulted in farmers facing major problems in sustaining the application of the technology.
25. During the test period ILCA provided a source of concentrates. However, after the test period concentrates proved difficult to obtain and sources were unreliable. A follow-up survey showed that only 11% were using concentrates. Some farmers were located near the Dairy Development Enterprise (DDE) milk collection points. However, the system of milk collection does not always work efficiently and frequent breakdowns occur. Farmers faced severe problems in marketing milk, particularly during fasting periods of which there are 140 days during the year. The absorption capacity in nearby Debre Berhan town is limited and marketing costs are high.
26. Disease problems also emerged as a major constraint after ILCA withdrew its veterinary services in 1985. Veterinary drugs proved difficult to obtain. The availability of appropriate cross-bred bulls also proved to be a major problem.
27. While land tenure was not a constraint mentioned by the DTF, their tenure rights are not secure. Farmers do not own their land. They have use rights but have no guarantee that they will next year have access to the same land they till this year. As a result farmers may be discouraged from investing in land improvements. In general, it is thought that insecurity of tenure may inhibit the adoption of certain technologies. A similar case in point might be the adoption of alley farming technology in West Africa (Francis, 1987). This technology requires a considerable initial investment and its benefits accrue over a long time. In some cases, ownership of trees is separated from land use rights, and often, land use rights are also not secure over a long enough term to recover investment costs in trees. ILCA in collaboration with the University of Wisconsin Land tenure Center is undertaking a study of the role of land and tree tenure in the adoption of technology in the case of alley farming in West Africa.1/
1/ Issues related to communal tenure on rangeland are not addressed here; for in-depth treatment of some of these issues see Bromley (1989), Bromley and Cernea (1989), Conrad and Clark (1987), de Ridder and Wagenaar (1983), Gordon (1954), Jarvis (1984), Sandford (1982, 1983) Swallow et al. (1987) and Swallow (1990).
28. It was clear that effective extension and veterinary services as well as effectively functioning markets for inputs (concentrate feeds) and milk were essential in maintaining the cross-bred cow and improved forage technology. The existence of these supporting institutions appear to be a necessary condition for the adoption of the cross-bred cow and forage technology in the Ethiopian case.
29. Further, there is a potential problem when these support systems are created through donor programs which must be donor sustained over a long period of time. Unless these support systems can be taken over by the national institutions, there is a chance that the technology cannot continue, and in reverting to the pre-support system technologies the farmers could be worse off than if they had never adopted the output-increasing technology in the first place. This potential problem needs to be addressed in promoting new, higher-input technologies. Considerations also need to be given to how institutional support systems can be phased in to meet the incremental needs of technological change.
30. Research is needed to indicate the cost and potential benefits to national economies from the establishment of effective supporting institutions which appear necessary for the adoption of output-increasing livestock technologies. Clearly, a holistic approach is needed to the improvement of efficiency of small-scale livestock production, while at the same time putting in place a set of consistent policies to provide adequate incentives and an economic environment that will help promote self-sustaining growth within the sector.
