Demand influencing attributes in the smallholder livestock marketing practices

Agajie Tesfaye

Socio-economics, Research Extension and Farmer Linkage, Ethiopian Institute of Agricultural Research (EIAR),
Holetta Research Center, P.O.Box 2003, Addis Ababa
agajie_tesf@yahoo.co.uk   ;   agajie@yahoo.co.uk

Abstract

Livestock is the essential sector for smallholder farmers in Ethiopia making considerable contributions for rural development as source of livelihoods. However, the potential of the sector is not yet well utilized especially with respect to marketing practices, which is mainly governed by traditional ways of marketing. Prices of livestock at the market are mainly influenced by observable phenotypic attributes while well developed markets depend on measurable attributes, such as weight. The study has identified that body condition and age were the most governing attributes of large ruminants, such as oxen and cows, which affect prices at the market. On the other hand, age and weight were observed to be the most crucial attributes influencing prices of small ruminants, such as sheep and goats. It was also noted that weight and color were essential traits influencing prices of chicken. Age and draught power output were also reported to be fundamental attributes influencing prices of equines.

The implication of identifying phenotypic attributes is that feasible options should be designed to sensitize and create awareness of smallholders on how to maximize incomes from marketing of livestock. This can be achieved by introducing and promotion of different applicable and feasible practices. Some of them could be promotion of improved fattening technologies for different species of livestock. Moreover, it is feasible option to organize experience sharing visits to model areas in improved fattening and livestock management practices. In line with this, publication and dissemination of reading materials in local languages, such as leaflets, pamphlets, fliers, posters, manuals and other similar materials would be very crucial especially for households who can read and write. Training of development agents based at grassroots levels on improved fattening, marketing and livestock management practices will contribute to ensure sustainability of supports for smallholders. The eventual effect of these interventions would be enhancing market participation and bargaining power of smallholders, increasing household incomes and contributing to rural development.

Key words: Customers, income, phenotypic attributes, prices

Introduction

Livestock marketing is essential to ensure food and income security of smallholders and the development of rural economy in Ethiopia. Sales of livestock account for one of the major cash sources of rural smallholders. The contribution of livestock as source of smallholder income is, therefore, one of the multiple roles in the household economy. Several livestock related studies conducted in different parts of Ethiopia have also confirmed that livestock account for 37– 87% of the total farm income of smallholders ranging from highlands to pastoral areas, indicating the importance of livestock in rural livelihoods (Gryseels 1988; ILRI 1995).

Even though livestock play crucial roles in the household economy of smallholders, producers are not yet making adequate use of the opportunities available. Instead, livestock production is showing a declining trend over time. For instance, the study by Workneh (2004) has reported that animal genetic resource in Ethiopia is declining due to various factors, such as changes in producer preferences, drought, interbreeding among the indigenous populations and others. Moreover, producers are not gaining satisfactory benefits from livestock production due to inadequate awareness about business orientation and efficient marketing practices. They are not well aware of mechanisms of maintaining preferred attributes that reward them premium prices from different livestock species. Livestock handling and marketing practices are more of traditional types without adequate knowledge of beneficial traits that the market demands. Therefore, appropriate interventions and supports shall be offered to livestock producers on how to maintain attractive attributes when selling livestock. To design feasible options of interventions, there is a strong need to make assessments on the different types of quality attributes that are demanded at the market for different types of livestock kept by smallholders. However, no adequate information is available on the phenotypic traits that are demanded at the markets for different species of livestock. This article, therefore, presents the findings to bridge up the information gap on the attributes of different species that influence demands and prices of livestock.        

Materials and methodology 

The study sites

The study was mainly conducted in locations that represent livestock marketing practices in the highland and mid-altitude agro-ecologies. Two districts were targeted for this study, namely Wolemera district, representing the highland livestock marketing practice and Dendi district representing the mid-altitude livestock marketing practices. Wolemera district is located at a distance of 34 kms west of Addis Ababa and Dendi district is located at a distance of 80 kms west of Addis Ababa. Both districts are characterized by mixed crop-livestock production systems. 

Sampling procedures and sample size determination

The districts were selected through purposive sampling techniques to represent livestock marketing practices at different agro-ecologies. Multi-stage sampling procedure was used to select districts, peasant associations (PAs) and small-holder households. Simple random sampling technique was used to select sample PAs from the population of PAs located in the two districts. The sample small-holder households were also selected using systematic sampling techniques. A systematic sample is formed by selecting one unit at random and then selecting additional units at evenly spaced intervals until the sample has been formed. Its symbolical representation is as follows:

Where k = sampling interval, N = Universe (population) size and n = sample size

The sample size required for this study was also determined by using the following formulae:

n = Sample size

Z = Value at specified level of confidence or desired level of precision

s = Standard deviation of the population

d = Differences between population mean and sample mean  

Using the formula, a total sample size of 236 smallholder households was selected from the two study districts, of which 80 of the small-holder households were selected from Wolemera district while 156 of them were selected from Dendi district. More sample size was taken from a district with large population size.

Data collection techniques

Three types of survey procedures were employed to collect the required data. First, secondary data was collected to acquire a general understanding of livestock marketing practices. Secondly, some of the participatory rural appraisal (PRA) tools and techniques such as, matrix rankings and semi-structured interviews (individual, group, and key-informant interviews), were used to collect wide ranges of qualitative data. Third, focused formal survey was conducted to quantify some of the important parameters using a structured and pre-tested questionnaire. Enumerators were recruited and trained to fill the questionnaire by interviewing smallholder households with close supervision of researchers.

Statistical analysis

The quantitative data was analyzed using SPSS statistical package. Descriptive statistics, Mean comparisons and Pearson's Chi-Square Tests were used to analyze the data. Chi-square test is one of the simplest and most widely used non-parametric tests in statistical work (Gupta 1997). To determine the value of Chi-square test, the following equation was used:

Where

X² = Chi-square

O = Observed frequency

E = Expected frequency

Expected frequency (E) in turn was computed by using the following equation:

RT = The row total for the row containing the cell

CT = The column total for the column containing the cell

N = Total number of observations

Results and discussion 

Income sources of small-holder households

Small-holder households mainly depend on sales of farm products as their sources of income. It was noted that sales of livestock was one of the major sources of income for 46% of the overall sample households (Table 1).

According to Pearson Chi-Square test, the proportion of households who depend on field crops (52%) and livestock (48%) was significantly higher (X²= 26.852, df=2, P<0.001) for Dendi district than Wolemera district. This was because, Dendi district is located at far distance (80 kms) from terminal market as compared to Wolemera district (34 kms) which is located closer to the terminal market of Addis Ababa city and offers ample demand for marketable products, such as vegetables, milk, cheese and butter. In both study areas, livestock were major sources of income for smallholder households. Similar field studies in other parts of Africa have also reported the importance of livestock in ensuring income security of smallholders. The study by Musemwa et al (2007) in Kamastone farmers of South Africa has also reported that 59% of the farmers keep cattle for the purpose of income generation, which is consistent with this finding. It indicates that the farmers of Kamastone in South Africa and the farmers of this study area gave similar emphasis for livestock production as sources of their on-farm income.

Among the types of livestock, chicken (43%) and sheep (42%) were common sources of incomes for the households (Table 2).

According to Pearson’s Chi-square test the proportion of households who depend on selling of chicken was significantly higher (X²=16.133, df=1, P<0.001) for Wolemera district than Dendi district. Moreover, the proportion of households who depend on sales of sheep was significantly higher (X²=10.951, df=1, P=0.001) for Wolemera district than Dendi district. This was because, Wolemera district is nearer to terminal market than Dendi district which attracts business oriented wholesale traders and contribute to raise demands for chicken and sheep. Moreover, local traders collect sheep and chicken from Dendi district and supply to terminal market through accessible modes of transportation.

In the marketing of livestock, the common buyers were commonly traders as reported by 83% of the overall sample households (Table 3).

According to 67% of the overall sample households, other producers are also common customers who purchase livestock for different purposes, such as fattening, traction, asset creation, breeding, consumption and other uses. The study conducted by Beyene and Lambourne (1985) have also reported that most of the buyers of livestock were butchers (40%) followed by traders (34%) at terminal markets. 

Demand influencing attributes of livestock

In the less market oriented mixed crop-livestock type of farming systems, smallholder households mainly depend on phenotypic attributes of livestock such as color, body condition, teeth condition and other characteristics in determining prices at the markets. On the other hand, well developed markets depend on crucial and measurable characteristics, such as weight.

The findings indicate that body condition (88%) and age (75%) were the two most essential attributes of oxen demanded by customers at the market (Table 4).

Similar attributes were also observed to be demanded by customers for other cattle, such as cows (Table 5).

Measurement of the attributes is not a common practice of smallholders. Instead, they use visual observations and other proxy methods of estimations. It is believed that attractive body condition is a reflection of good feeding, healthiness and better management, in general. Therefore, the more attractive body condition of the animal is, the better price it rewards. Attractive body condition is commonly attained through fattening of the animal. Therefore, it is a wise strategy to introduce and promote improved and feasible fattening techniques of cattle and other livestock species.

Age is commonly estimated by observing teeth condition of livestock, such as cattle, small ruminants and equines. The age of chicken is estimated by observing the size of shank. It has also been commonly reported that as age increases, the quality of meat declines irrespective of other attributes of the animal. For chicken, the bigger size of shank is an indication of low meat quality. For local cattle, such as Zebu breeds which are commonly available in Ethiopia, 2 – 3 years of age is the preferred age limit that fetches better prices either for purposes of meat or plowing. However, above 4 years of age is not the preferred age limit for cattle. 

Several studies in different parts of the country have also reported different traits of livestock affecting market prices. For instance, Andargachew and Brokken (1993) have reported that traits of animals, such as age, weight and color were observed to influence prices of livestock at the markets. Moreover, the study by Girma et al (2006) has confirmed that age is one of the attributes that influences prices of oxen and cows. The study conducted in several pastoral markets in the country has also attested that prices are highest for matured animals for all the three types of livestock (sheep, goat, and cattle) relative to the immature and young livestock (Hailemariam et al 2009). It was reported that age is associated with the live weight of animals which is the major criteria considered by export abattoirs for sheep and goat. Young and immature animals can not attain the required live weight (15-30 kg in most of the cases). For cattle, it is related to the feed conversion capacity of animals at this age. Feedlots and live animal exporters need good finishers that would attain the required live weight with in a very short time needed for quarantine procedure. Thus, mature animals fetch higher prices. Hailemariam et al (2009) have also reported that there is a strong positive association between body condition and prices of sheep, goat and cattle. It was observed that buyers paid the highest prices for sheep and goat, and cattle with excellent body condition.

The implication of the findings is that smallholders should be supported in creating awareness on how to improve body condition of their livestock. For instance, it can be achieved through improved management practices, such as improved feeding practices, housing, health care and other associated improved packages. Promotion of improved fattening technologies would enhance incomes of smallholders and rural development in general. It would also be feasible to organize experience sharing tours to places that are known in their improved livestock farming and fattening practices. Publication and dissemination of pamphlets, fliers, posters, manuals and similar materials in local languages will also be effective mechanism in enhancing improved livestock management and fattening practices of smallholders. Producers should also be supported in creating awareness of the age limits that are demanded at the market. In line with this, it would also be advisable to sensitize them to keep records of ages of their animals. This is because, age is closely associated with meat quality of the animal.

With respect to marketing of small-ruminants, age and weight were the most essential attributes demanded at the market. According to the findings, 53% and 40% of the overall sample households reported that age and weight, respectively, were the crucial attributes demanded from sheep by customers at the market (Table 6).

Other essential attributes include color (26%) and health conditions (18%). Moreover, 40% and 20% of the overall sample households have prioritized age and weight, respectively, to be essential traits that are believed to influence prices of goats at the market (Table 7).

Livestock marketing study in some parts of the country has also confirmed high correlation (0.8) between price and weight of an animal where price per kg increases with increased weight of the animal (Beyene and Lambourne 1985).

Age of small ruminants is commonly estimated by observing teeth condition. The age range of sheep and goats between 1.5 – 3 years was commonly observed to fetch better prices. However, sheep and goat beyond the ages of 4 years were not commonly demanded at the market irrespective of other attributes due to their low meat quality.

Moreover, it was not a common practice to weigh a small ruminant at the market using measuring instruments. However, it was estimated by observation and sometimes by lifting and perceiving how heavy the animal under consideration is. The heavier the weight, the higher the price the animal fetches under the preferred age limit. Therefore, producers of small ruminants should be supported on how to increase weights of their animals under the preferred age limit (1.5 – 3 years). For instance, this can be achieved by promoting improved technologies of sheep and goat fattening. This includes selection of best breeds as per the agro-ecology, promotion of improved feeding, housing, health care and other associated techniques. A well conditioned sheep or goat in the weight ranges of 60 – 70 kilograms within acceptable age limits is believed to fetch premium prices at the market.

It was also noted that weight (60%) and color (37%) were highly demanded attributes of chicken that influence prices at the market, as reported by the overall sample households (Table 8).

Other essential attributes include health condition and age. Similar studies have also attested that prices varied according to the health condition and weight of the animal (Beyene and Lambourne 1985).

The weight of chicken is commonly estimated by picking up and perceiving how heavy it is. The heavier the weight of the chicken, the higher the price if its age is estimated to be below 1.5 years. Chicken older than 2 years are not commonly demanded at the market because of low meat quality. The most preferred color of chicken at the market is white followed by red and mixtures of white, red and black. However, completely black color of chicken is not commonly preferred at the market either for meat or breeding purposes irrespective of its age and weight. Therefore, it is essential to design a program that promotes improved poultry production practices. Selection of breeds, promotion of improved feeding, housing, health care and other management practices will enhance incomes of smallholders from sales of chicken. Weights of local breeds in the ranges of 2.0 – 2.5 kilograms is preferred at the market with premium prices at the acceptable age limits. Therefore, it is also a feasible option to support smallholders on how to keep records of ages and weights of their chicken. 

Equines are also important sources of incomes for smallholder households in the mixed crop-livestock farming systems. There are crucial phenotypic traits considered during marketing of equines. The study has noted that age (48%) and draught power output (40%) are the major attributes considered during marketing of horses as reported by the overall sample households (Table 9).

Age (60%) and un-deformed feet/nails (31%) are also essential traits that reward premium prices for marketing of donkeys (Table 10).

Equines are commonly demanded for recreational purposes and for source of draught power during transportation. Age of equines is estimated by observing teeth condition as that of any other livestock. Therefore, the age limit in the range of 3 – 4 years is preferred at the market with better prices. The more the age, the better draught power capacity and the better price. However, the age above 5 years is not preferred age limit for equines. 

In general, the findings indicate that different types of livestock species have their own specific attributes and values that are highly demanded at the market. Availability of these attributes entails sellers of livestock with premium prices. The implication, therefore, is that attributes that are highly demanded by customers should be given due focus to enhance livestock marketing and market participation of producers. Development partners should support small-holder households to be aware of these price influencing factors and ensure to maintain these qualities while intending to trade with their livestock. For instance, small-holders should be trained on mechanisms of improving body condition of cattle, such as introduction and promotion of improved fattening technologies using improved feeding, housing, health care and other practices. It is also essential to train small-holders on the appropriate age limits at which cattle should be supplied to the markets and record keeping practices of ages. Small-holders should also be trained on other attributes of livestock most demanded at the markets so as to reap better prices and enhance household incomes.

Conclusion and recommendations 

• The livelihoods of smallholders is highly dependent on the cash income derived from livestock. As a result, households are commonly engaged in keeping different species of livestock. The marketing practice of livestock is mainly characterized by less business orientation whereby prices are mainly determined based on phenotypic attributes and values, rather than on measurable attributes. Body condition and age were reported to be crucial attributes of cattle, such as ox and cows. Moreover, age and weight were essential traits that affect demands of small ruminants. Age and draught power output were also important attributes that are considered during trading of equines. Weight and color were also observed to be essential attributes that influence demands of chicken. In general, age has come out to be the most crucial attribute influencing prices of almost all types of livestock. Weight and body conditions were also cross-cutting attributes demanded at the markets for most of the livestock species.

  
  

• Therefore, appropriate intervention strategies should be designed to create awareness of livestock producers on the essential attributes that they should maintain for better income from their animals. Above all, improved fattening technologies should be introduced and promoted for smallholders through appropriate and feasible approaches. Moreover, they should be trained on the appropriate ages at which they should sale their livestock species so as to secure premium prices. Introduction of record keeping practices of age and weight especially for small ruminants and chicken is also a valid strategy that is worthy to be promoted. In line with this, organizing experience sharing visits to successful and model areas in improved fattening and livestock management practices in general is also a feasible approach for smallholders to create impressions through observation. Publication and dissemination of reading materials in local languages, such as leaflets, pamphlets, fliers, posters, manuals and other similar materials would be very crucial especially for those households who can read and write. Training of development agents based at grassroots community levels on improved fattening, marketing, and livestock management practices, in general, will contribute to ensure sustainability of supports for smallholders. These interventions will eventually contribute to market participation and bargaining power of smallholders. Household incomes will also improve and rural development will be attainted through sustainable efforts over time.

References  

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Received 25 July 2010; Accepted 5 October 2010; Published 1 November 2010

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