Transcript Conducting Public Expenditure Reviews for Livestock Sub-sector: Issues and suggestions for draft framework

Conducting Public Expenditure
Reviews for Livestock Sub-sector:
Issues and suggestions for draft
framework
Joseph Karugia
Coordinator
ReSAKSS-ECA
ILRI
Agriculture Public Expenditure Review Workshop,
May 11-12, 2009 ILRI, Addis Ababa
Introduction
 Public
expenditure is an effective
instrument for enhancing growth and
reducing poverty – key goals of national
policy
 Expenditure
prioritization is important for
achievement of these goals
 Livestock
is vital to the economies of
many developing countries
0
Côte d'Ivoire
Ghana
Liberia
Morocco
Burkina Faso
Guinea
Guinea-Bissau
Mali
Mauritania
Senegal
Sierra Leone
Gambia
Djibouti
Eritrea
Ethiopia
Sudan
Uganda
Algeria
Cameroon
Central African Republic
Libyan Arab Jamahiriya
Tunisia
Benin
Chad
Equatorial Guinea
Niger
Nigeria
Togo
Egypt
Somalia
Botswana
Burundi
Kenya
Rwanda
Tanzania, United Republic of
Zimbabwe
Lesotho
Malawi
Mozambique
South Africa
Swaziland
Angola
Congo
Namibia
Madagascar
Livestock Sector contribution to
AgGDP-Average 2000-2005
100
90
80
70
60
50
40
30
20
10
Livestock trends….
 Livestock
fastest growing part of the
agricultural sector, largely driven by the
Livestock Revolution in emerging
economies
 Need
to double livestock production in
developing world by 2020 to meet rising
demand for livestock products
Livestock trends….
 Doubling
livestock production puts
pressure on natural resources: water,
land, biodiversity
standards rising – rise of
supermarkets
 Food
 Market
chains are getting longer and
complex – small producers marginalized
Contribution of livestock not fully
appreciated..
 Milk,
meat, manure, draft power, hides and
skins are the commonly cited outputs of
the livestock sector
 In
SSA, beef is ranked top in terms of
value of production of key commodities
with a 10.1 % share of total (ReSAKSS,
2008)
VALUE OF PRODUCTION RANKINGS OF KEY COMODITIES IN SUB-SAHARAN AFRICA
Commodity
Subsector Group
% of Total Value of Production 2000
Beef
Livestock
10.1
Cassava
Roots & Tubers
8.3
Yams
Roots & Tubers
6.5
Maize
Cereals
5.9
Groundnuts
Oil Crops
5.1
Cow Milk
Livestock
4.8
Sorghum
Cereals
3
Rice
Cereals
2.9
Millet
Cereals
2.8
Plantains
Fruits
2.7
Chicken Meat
Livestock
2.7
Cotton
Fiber Crops
2.5
Vegetables, Net
Vegetables
2.3
Cocoa
Tree Nuts
1.9
Goat Meat
Livestock
1.9
Mutton/Lamb
Livestock
1.9
Hen Eggs
Livestock
1.8
Sugarcane
Tree Nuts
1.5
Beans, Dry
Pulses
1.4
Coffee
Tree Nuts
1.4
Bananas
Fruits
1.3
Taro
Roots & Tubers
1.1
Pig Meat
Livestock
1.1
Cowpeas
Pulses
1.0
Total
75.9
Sources: i) Year totals: FAOSTAT 2002 and international prices 1989-1991
Notes: Percent production value is calculated as the percent of value of production of current crop in total value of agricultural production of regional average (1998 -2000).
Values were constant 1989-1991 international dollars. Only crop, with at least 1% of value of production are included.
But other important contributions
are often ignored…
 Integrate
and complement crop
production
 Savings
 Reserve against risks
 Indirect, non- market values include




Option values – option to use in the future
Existence values – utility of knowing that a
good or service exists
Environmental services
Social-cultural values
Ignored in policy discourse….

In HIPC countries, livestock featured poorly in
PRSPs, even those with relatively large
pastoralist populations (Blench et al, 2003)
 Why?
 Poor articulation of investment needs of the
sector?





Poor representation in the PRSP process
Even IMF and WB’s Joint Staff Assessments do not
help
Poor evidence base on which to base plans and
demonstrate outcomes – livestock numbers,
populations affected, production systems, etc
Poor representation in Budget making process
Political economy issues
• Client-patronage relationships, poorly organized
Some guiding principles…

What is the right level and composition of public
livestock expenditures?
 Need to address market failures (public goods,
externalities, natural monopoly) – comparative
advantage v/s private sector
 Cost-Benefit analysis to optimize social gain and
equity – in line with stated national policies
 LE often include animal/human health, the
environment, livestock services (breeding,
feeding), extension, marketing support, credit,
and consumer support programs
What to do… (1)

Link PE to national policy
• Often, expenditures support commercial sub-sector
• To reach the poor target expenditure programs that matter
most to the poor – Benefit incidence analysis
• Need evidence on role of livestock in poverty alleviation of

Externalities
• Confer unfair advantage to intensive production systems
• Loss of biodiversity – e.g. cross-breeding programmes
• Cross-border externalities – disease control

Understand production systems and their dynamics
• Composition of expenditures will change with level of
development and past investments
• Link to crop agriculture
What to do… (2)

Understand market dynamics and design
appropriate market interventions
• Market imperfections characterize livestock sector,
especially pastoral systems
• Do not overemphasise international markets at the
expense of domestic and regional markets developing countries are net importers of livestock
products (FAO, undated)



Disease free zones? – high cost, low intensity, enforcement
Export slaughterhouses in remote areas – quality,
transportation problems
SPS requirements stringent
What to do… (3)

Develop domestic and regional markets
• Improve physical market places, holding grounds,
loading ramps, etc
• Improve price information

Exploit the unique power of ICTs to overcome remoteness
• Link pastoral areas with higher potential areas by
providing finishing infra-structure and incentives
• Improve transport routes

Provide credit interventions to both producers
and traders
What to do… (4)




Improve water infrastructure
Invest in veterinary services and focus on key
diseases
Invest in early warning systems for drought
and diseases
Improve security - develop effective
approaches for the traceability of livestock
THANK YOU!