Constraints and opportunities in the hides and skins value chain in pastoral areas of northern Kenya

F O Wayua and A Kagunyu

Kenya Agricultural Research Institute, National Arid Lands Research Centre, P.O. Box 147-60500, Marsabit, Kenya
fwayua@yahoo.co.uk

Abstract

Pastoral income diversification can depend on increasing market involvements. One option is for pastoralists to make use of hides and skins readily available in their areas, but whose potential remains largely un-tapped. This paper examines the challenges and opportunities in the hides and skins value chain in pastoral areas of northern Kenya and provides recommendations for the sector to contribute towards increased incomes, employment creation and reduced food insecurity in these areas.  

Results show that rural slaughter slabs and homestead slaughter are the main sources of hides and skins, which are utilised in tanneries in major towns of the country. However, value addition along the chain is relatively un-developed. The main constraints include non-recovery, low supply, poor quality, hot climate leading to faster spoilage, high transaction levies and lack of markets. Poor quality is caused by parasites and diseases, the small size of hides from pastoral livestock, inappropriately placed brand marks, damage of hides from thorny grasslands, flay cuts and inappropriate curing techniques. Opportunities are provided by simple preservation using wet salting technology, local processing and value addition in community-based tanneries, ready market for hides and skins in the tanning industry, and goodwill from the Government and non-governmental organisations in pastoral livelihood improvement. In conclusion, there is great socio-economic potential in the hides and skins value chain from pastoral areas that could be exploited by addressing the identified constraints and taking advantage of the opportunities. This would assist in expanding employment and income opportunities in the pastoral areas characterised by limited livelihood options. 

Key words: flaying, handling, preservation, quality control, storage

Introduction

Pastoral risk management can involve the sustainable diversification of incomes and assets at the household level. One livelihood option makes use of hides and skins readily available in pastoral areas. The term “hide” refers to the external surface layers of a large animal (cattle, camel, etc), whereas “skin” refers to the external surface layers of a small animal (e.g. sheep, goat, etc) (Leach 1995). In this paper, however, the two terms are used interchangeably, except when comparisons are made between the two. The hides, skins and leather industry in Kenya is one of the key agricultural sub-sectors with a high potential towards commodity development that addresses pertinent issues of socio-economic importance and positively impacts on rural development, creation of wealth and employment (Mwinyihija 2011). Kenya’s hides, skins and leather industry contributes an estimated 4% to agricultural gross domestic product (GDP) and 1.5% of total GDP (Mwinyihija 2011). In 2009 the country produced 3.5 million goat skins, 2.4 million sheep skins, 2.6 million cattle hides, and 65,000 camel hides, with an estimated value of USD 20 million (Mwinyihija 2010). In the local market the dealers were estimated to earn about KES 1.8 billion annually (1 USD being equivalent to KES 82, April 2012), while in the export scene the country earns approximately KES 4 billion from the exports of hides, skins, leather and leather goods (Mwinyihija 2011). The contribution of the hides and skins value chain towards achieving economic growth is high and the only way to such success is through embracing value addition initiatives.  

Value addition in agricultural commodities can be defined as improving the natural and conventional form, quality and appeal of a product subsequently increasing the consumer valuation beginning from farm level to marketing of finished products (Leach and Wilson 2009). The potential for value addition within the agricultural sector is enormous for most of the commodities, and so would be the gains from value addition. However, despite the large livestock population in pastoral areas, value addition for hides and skins is relatively un-developed (Mwinyihija 2010, 2011; NESC 2010). Most pastoralists preserve hides and skins using sun drying and suspension drying, which lead to inferior quality products (Kagunyu et al 2011). The government’s strategy to develop the hides, skins and leather industry springs from its blue print for industrial development by the year 2030 (Vision 2030) which promotes industrialisation and value addition in key sectors (NESC 2010). Research conducted in pastoral areas of northern Kenya has shown that value addition of hides and skins has potential of increasing incomes in the pastoral areas (Wayua and Kagunyu 2008; Kagunyu et al 2011). However, data on the constraints and opportunities in the hides and skins value chain in pastoral areas are largely non-existent. This paper reviews the constraints and opportunities in the hides and skins value chain in pastoral areas of northern with a view of making the value chain contribute optimally towards increase incomes, employment creation and food security in these areas. 

Methodology

The paper is based on a synthesis of project reports on hides and skins technology development done by the Kenya Agricultural Research Institute (KARI) and other stakeholders. Documents reviewed included specific studies, progress reports and various articles in newspapers. The findings from the reviews were refined through informal interviews with various key informants in relevant government institutions (i.e. Hides and Skins Officers, Cooperative Officers, etc), butchers, hides and skins merchants, managers of slaughter-houses and tanneries, and physical visits to stores where hides and skins were cured, and several markets and curio shops dealing with leather goods.  

Results and discussion

Hides and skins from pastoral areas 

Hides and skins are a by-product of meat production and, consequently, the volume of hides and skins is determined by meat production. Most of the hides and skins are sourced from rural slaughter slabs and homestead slaughter (Wayua and Kagunyu 2008).  

Homestead slaughter

Goats and sheep are mainly slaughtered in homesteads during cultural and religious festivals and this, therefore, is scattered and periodic. After slaughter, the skin is removed by hand with a knife (i.e. hand flaying), and this reflects directly on the poor quality of raw skins obtained, with the traditional slaughter having many slaughter defects and, consequently, fetching poorer price. Most households sell between 2 and 5 skins each per month (Kagunyu et al 2011).  

Rural slaughter slabs 

Slaughter of livestock in rural slaughter slabs is done under very poor conditions. Cattle and camels are mainly slaughtered in poorly equipped slaughter points where the infrastructure is sometimes a slab of concrete, under a tree or using poles for hoisting carcasses. These facilities are normally located adjacent to butcheries in various trading centres. The slaughtering, therefore, takes place in scattered areas and often without adequate supervision. The tools used in these facilities or in homesteads are usually rudimentary and cause damage to the hides during slaughter, resulting in poor prices of the skins (Wayua and Kagunyu 2008).  

Grading of hides and skins 

Grading of hides and skins is essentially a matter of determining the relative abundance of defects. The defects include knife cuts, bad shape, branding marks, etc. A hide or skin with no defects would be designated Grade I (perfect), while that with many serious defects designated Grade IV (imperfect) or simply discarded (Leach 1995; Mbogo and Malala 2007). Any hide of intermediate quality would be classified as Grade II or III (Leach 1995). In pastoral areas hides and skins are not usually graded but the average grades in Laisamis, Marsabit County were I (34%), II (31%), III (24%), and IV (11%) (Table 1).  

The hides and skins value chain  

Hides and skins markets in pastoral areas of Kenya function at three levels: primary, secondary and terminal markets. Primary markets are based in rural towns of various districts. Primary traders collect hides from livestock keepers in the villages and sell to secondary markets (middlemen, trader and butcher dominated markets) which are based in district headquarters. Secondary traders sell their products to terminal markets / tertiary traders and tanneries based in Nairobi and other urban centres in the country (Kagunyu et al 2011). The value chain is illustrated in Figure 1.

Constraints in the hides and skins value chain

(a)    Shortage of raw material supply. Many hides and skins remain uncollected, which is estimated at 14% for hides, 34% for sheep skins and 29% for goat skins, (Muthee 2008), and income and employment opportunities that might be associated with their use are lost.

(b)    Quality deterioration. As a result of the by-product status, not enough attention is paid to maintaining the quality of hides and skins. Hides and skins are affected by pre-slaughter defects accumulated during the life of the animal; peri-slaughter defects during slaughter, and post-slaughter defects during handling, preservation and storage (Mwinyihija 2010; 2011). Pre-slaughter defects include parasites and diseases (e.g. mange, tick infestations, lumpy skin disease, sheep and goat pox, etc), small size of hides, inappropriately placed brand marks, and mechanical damage of hides by thorns from the thorny grasslands. Pastoralists brand their livestock with hot irons for identification (as livestock rustling is a common practice among pastoral communities) and as cure for various diseases. Unfortunately, this is done indiscriminately and branding marks are made on the larger part of the body destroying the hide. Peri-slaughter defects are caused by bleeding and dressing (ripping and flaying damage). Hand flaying using knives is the most common technique in pastoral areas. Poor flaying causes holes and cuts on the hides and skins, which consequently fetch lower prices because of the poor quality, and also results in higher rejection by tanneries. Post-slaughter defects are caused by abrasion, damage by pests and moulds, and inappropriate curing methods (Kagunyu et al 2011; Mbogo and Malala 2007). Pastoralists mainly use ground drying and suspension drying to cure hides and skins, which result in inferior quality skins (Kagunyu et al 2011). The wet skin is pegged on the ground to dry or tied to a frame and dried upright. Only very few producers are aware of wet salting method of curing hides and skins. This lack of knowledge on preservation means that suppliers, therefore, cannot stockpile skins until the price increases. For camel hides, poor flaying is due to the inability of all Government abattoirs in Kenya to hang camel carcasses for skinning. Pre-, peri- and post-slaughter defects account for 40%, 20% and 40%, respectively, of the defects in hides and skins (Muthee 2008; NESC 2010). In order to fully utilise the hides and skins resources that are found in various parts of the pastoral areas, it is essential to establish well organised hides and skins collection and preservation enterprises managed by the private sector.

(c)    Inadequate numbers of slaughterhouses and slabs. The number of slaughterhouses in pastoral areas is very limited. Thus, the majority of cattle, sheep and goat slaughter are carried out in the backyard, resulting in poor quality raw hides and skins (Kagunyu et al 2011).

(d)   Low prices of hides and skins. The current low prices for hides and skins (see Table 3) are no incentive for proper handling and curing. The primary producer in the village, the small farmer, receives such a poor return, as compared with the final price (Table 3), that it gives them no incentive to improve the quality of livestock or their hides/skins (Kagunyu et al 2011). Table 3 shows that the primary producer in the village could realize a price increase of 20–100% as a result of wet salting their hides and skins before selling to merchants.

(e)    Hot climate in the pastoral areas leads to faster rate of spoilage of hides and skins. Pastoral areas are arid and semi arid with high ambient temperatures (>25°C) and low relative humidity (<30%), conditions (KMD 2010) which accelerate spoilage of hides unless adequate preservation measures are undertaken promptly.

(f)     Poor infrastructure, remoteness and lack of market information. Poor infrastructure increases transport and other transaction costs and is a major limitation to the marketing of hides and skins. These characteristics magnify the effects of inadequate information-sharing, from which markets in pastoral areas are suffering. Wholesalers cannot receive reliable market information from the tanneries on future price trends. This is critical since wholesalers lack any sources of information on the international price and the tannery does not guarantee a fixed purchasing price. It buys skins based on the international price at the time of the wholesalers’ delivery, not at the time of the wholesalers purchase from collectors. There is usually a time lag of around 2 to 3 months for delivery from merchants to the tannery since wholesale merchants have to keep the skins stored in salt until a large enough number has accumulated for truck transportation (Kagunyu et al 2011; Omiti 2004; Wayua and Kagunyu 2008). As a result, the risks of international price changes are shared between the tannery and merchants. The poor transfer of knowledge, skills and information is further manifested by limited interaction of the farmers with extension officers due to poor road networks and resources. Considerable progress has, however, been made in the provision of communication systems such as mobile telephone facilities (Mas and Morawczynski 2009).

(g)    High transaction levies. Hides and skins trading is subject to several service fees from the different levels of government. Local councils charge market service fees for providing space to conduct the market transactions, i.e. KES 5 and 10 for every skin and hide, respectively (Kagunyu et al 2011). Transit fees are charged on hides and skins which are transported from one market to another. Traders could be charged transit fees a number of times when they pass a local or regional border. Hides and skins traders also have to pay license and permits to the Department of Veterinary Services (DVS), Ministry of Livestock Development (Table 2). Transactional costs are barriers to the efficient participation of farmers in different markets. Apparently, there is competition on the issuance of licenses and permits between the DVS and the Country Councils. Due to confusion in the law the sales tax is sometimes charged more than once and sometimes based on an arbitrary price fixed by the tax collector, especially at the county level (Wayua et al 2007).  

(h)    Unfair competition from unlicensed dealers. There are very many unlicensed dealers who do not pay the license, permits and market service fees and so can set the market price at any value. This demoralises the licensed merchants (Kagunyu et al 2011).

(i)      Lack of capital. Finance for initial capital outlay, expansion and working capital remain a major constraint. Setting up a modern slaughter house or a tannery is an expensive undertaking. There are very few financial institutions or banks that are willing to lend money to hides and skins traders as they do not have acceptable collateral; livestock is not accepted as a security for loans and the land tenure in pastoral areas is such that there are no individual title deeds (Wayua and Kagunyu 2008).

(j)     Insecurity in livestock producing areas. This situation, which has been endemic to pastoral areas, has its roots in a combination of factors including conflicts over natural resources (pasture, water and land), livestock rustling and intertribal and clan clashes. The situation is exacerbated by instability in bordering countries-Somalia, Ethiopia and Sudan (Kagunyu et al 2007).

The constraints mentioned above mean that pastoralists lose much income that would otherwise result from value addition of hides and skins.  

Opportunities in the hides and skins value chain 

There are many opportunities in the hides, skins and leather sector, offered by the following:

(a)    Raw material availability, due to the large livestock base in pastoral areas.

(b)   Ready market. There is a growing national and international market for hides, skins and leather products (Mwinyihija 2011). Currently, there are 276 registered hides and skins traders, 12 operating tanneries, 1500 registered slaughter houses/slabs and 16 registered exporters (Mwinyihija 2010), which offer ready market for hides and skins.  

(c)    Use of wet salting technology to improve curing and preservation. This is a simple and effective technology of preserving hides and skins using salt, with a potential of increasing profits many fold (Table 3). In wet salting, the fresh skin is cleaned of any blood or dirt, and washed with clean water. The skin is laid out with the inside facing upwards and salt equivalent to 40% of its weight is sprinkled on to it, until it is covered in an even layer. The salt reduces the skin’s moisture content and prevents bacterial putrefaction. The skin can be folded with the salted side inside and kept in this way for long periods before tanning (Leach 1995; Leach and Wilson 2009). It is not time-consuming and requires small space as compared to sun and suspension drying methods. In a tannery, wet salted hides and skins can be rehydrated and ready for further processing within hours. The different salts used by producers and traders in Northern Kenya to cure hides and skins include table salt, chalbi salt (salt collected from a dried up lake in northern Kenya desert), marine salt, red Magadi (livestock salts), and industrial salt. 

(d)   Local processing and value addition in community based tanneries. Numerous opportunities exist for processing of hides and skins into leather which can then be used to make various leather goods. This can be done by women groups after proper training. While it offers higher returns in the entire chain, international markets need to be explored.

(e)    From the value chain, opportunities exist in form of upgrading the channel and establishing backward linkage with farmers, slaughterhouses and slabs. This linkage objective raises the quality of hides and skins to consistently meet customer demands. The link between the local value chain to both the national and international chain can be strengthened to create benefits and redistribute the margins across the entire chain.

(f)    Government willingness in revitalising the hides, skins and leather sector through public/private partnerships. The Kenya Leather Development Council (KLDC) was established in 2010 to regulate the hides, skins and leather sub-sector through formulation of relevant policies critical to steer the sub-sector to global competitiveness (GoK 2012). Representatives are from the Kenya Livestock Marketing Council, and the private sector (slaughter houses association, hides and skins traders, tanners, footwear and leather goods manufacturers, informal leather manufacturers, etc) and academia. The Government is addressing hindrances and competition, which have made Kenya unable to fully exploit hides and skins as a locally available resource. This includes initiatives such as imposition of tax on exportation of raw hides and skins and exemption of import tax on selected chemicals and machinery used in the tanning industry. The Leather Development Centre at the Kenya Industrial Research and Development Institute (KIRDI) assists communities improve their processing and marketing ability of hides and skins (GoK, 2012).  

Conclusions and recommendations

• This paper shows that there is great potential for hides and skins to contribute to livelihood diversification in rural pastoral areas of northern Kenya. Although most of the data are qualitative, they provide important insights into the constraints and opportunities in the hides and skins value chain in pastoral areas of northern Kenya, which can form the basis for further investigation. Results of this study indicate that the hides and skins value chain is constrained by many challenges which must be overcome to realise the full potential.

• Areas that need urgent attention include promoting optimum local utilisation of hides and skins, improvements in recovery and quality through training in handling, flaying, preservation, storage and quality control for all the actors in the value chain. The wet salting technology needs to be up-scaled so as to benefit more dealers. The value chain could benefit from enhanced government/private partnerships with synergies actualised along the chain. The Government’s role should be mostly facilitative and regulatory, while the role of the private sector should be supportive, value addition and production. 

References

GoK 2012 Government of Kenya. Relaunch of Kenya Leather Development Council. http://www.leatherdevelopmentcouncil.go.ke (accessed 5^th July 2012). 

GoK 2008 Government of Kenya. License for hides and skins. District Hides, Skins and Leather Development Section, Department of Veterinary Services, Ministry of Livestock and Fisheries Development, Marsabit. 

Kagunyu A, Wayua F, Ngari E and Lengarite M 2011 Factors affecting marketing of hides and skins in pastoral communities of northern Kenya. KARI-Marsabit Technical Report. 

Kagunyu A, Mohamed S, Okoti M, Wayua F, Mesele S, Haile G, Belay L, Tilahun A and Kero U 2007 Pastoral conflict and use of key resources along the Ethiopia-Kenya border. Research Brief 07-04-PARIMA (December, 2007). Pastoral Risk Management (PARIMA) Project of the Global Livestock Collaborative Research Support Programme (GL-CRSP). 

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Mbogo E and Malala E 2007 Hides and Skins Manual for the Arid and Semi Arid Lands of Kenya. Ministry of Livestock and Fisheries Development, ASAL Based Livestock and Rural Livelihoods Support Project, Nairobi, Kenya. 

Muthee A M 2008 Integrated value chain analysis of the leather sector in Kenya. Ministry of Trade and Industry, Nairobi, Kenya. 

Mwinyihija M 2011 Preview on hides, skins and leather sub-sector in Kenya. Ministry of Livestock Development, Nairobi, Kenya. 

Mwinyihija M 2010 Hides, skins and leather value addition initiatives: the Kenyan Scenario. Leather and Leather Products Development Division, Ministry of Livestock Development, Kenya. 

NESC 2010 Value addition in the hides, skin and leather sub-sector in Kenya. National Economic and Social Council of Kenya, Volume 2, February 2010.  

Omiti J 2004 Production and marketing problems in the hides, skins and leather sector in Kenya. Policy Brief, Volume 10, issue, 4, 2004. Institute of Policy Analysis and Research (IPAR), Nairobi, Kenya. 

Wayua F O and Kagunyu A 2008 Empowering pastoralists through local options for livelihood diversification: hides and skins value addition and marketing in Northern Kenya. Paper presented at the Animal Production Society of Kenya (APSK) 2008 Annual Symposium, “Empowering Livestock keepers through Growth in Agribusiness”, KARI-Katumani, 7-9 May 2008.  

Wayua F O, Mugai E N and Owuor M 2007 Marketing survey of hides, skins, and leather from rural tanneries in pastoral areas of Northern Kenya. KARI-Marsabit Technical Report, September 2007. 

Received 14 April 2012; Accepted 8 July 2012; Published 1 August 2012

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