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ISBN-13: 978 1 78924 185 3 (hardback) ILRI ISBN: 92-9146-586-3 (hardback) CABI Commissioning editor: Alexandra Lainsbury CABI Editorial assistant: Lauren Davies CABI Production editor: James Bishop Typeset by SPi, Pondicherry, India Printed and bound in the UK by Bell and Bain Ltd, Glasgow 17 Economics and Policy Research at ILRI, 1975–2018 Mohammad Jabbar1, Steve Staal2, John McIntire3 and Simeon Ehui4 1Dhaka, Bangladesh; 2International Livestock Research Institute, Nairobi, Kenya; 3Santa Barbara, California, USA; 4World Bank, Washington, DC, USA Contents Executive Summary 640 Goals of economics and policy research 640 Research spending 640 Scientific impacts 640 Development impacts 641 Introduction 641 Policy Problems 642 The historical problem of supply response 642 Markets, institutions and competitiveness 648 Ruminants 648 Pigs and poultry 650 Animal health services and productivity 653 Responding to the ‘Livestock Revolution’ 655 Policy and technical barriers to smallholder dairy development 656 Dairy reform in Ethiopia 656 Dairy reform in Kenya 658 Comparisons of dairying in South Asia and East Africa 660 Land rights 661 Pastoral systems 662 Land tenure, resource allocation and productivity 663 Collective action for common resource management 664 Land tenure and fodder trees 666 Livestock and poverty 666 Food security and nutrition 667 IBLI in the arid rangelands of Kenya and Ethiopia 668 Impact 669 Policy lessons 669 Livestock sector analyses and master plans as part of development policies 669 The Future 670 References 671 © International Livestock Research Institute 2020. The Impact of the International Livestock Research Institute (eds J. McIntire and D. Grace) 639 640 M. Jabbar et al. Executive Summary • Definition of a path from research to devel- opment impact known as ‘Livestock – A Goals of economics and policy Pathway out of Poverty’. research • Contributions to global knowledge about distortions in agricultural incentives via a The goals of livestock policy and economics re- wide range of livestock system, value-chain, search at the International Livestock Research trade and incentive studies. Institute (ILRI) have been to increase small- • The notable scientific achievement compris- holder returns from animal agriculture by: (i) ing the joint effort of ILRI, the International analysing the productivity and targeting of live- Food Policy Research Institute (IFPRI) and stock-based technologies; (ii) identifying policy the Food and Agriculture Organization of barriers that lower farm prices, raise input costs the United Nations (FAO) to produce a study or lower the financial, information, and risk of global livestock trends: ‘Livestock to costs of new agricultural innovations; (iii) sup- 2020: the next food revolution’ (Delgado porting institutions that improve productivity, et al., 1999). create assets and improve the performance of • Informed pro-poor regulatory systems for value chains; and (iv) creating a policy and improved dairying in Kenya and Ethiopia, regulatory environment that allows animal for live-animal marketing in Sudan, and for agriculture to contribute to growth and poverty better structuring and financing of animal reduction. health in various livestock systems. • Using remote sensing and household sur- vey data, development of an index-based livestock insurance product, achieving Research spending wide scientific impact through the many well-cited papers produced from that data International Livestock Centre for Africa in Kenya and Ethiopia. (ILCA) spending on economics and policy re- • Developing new methods: incorporating search was some US$48 million from 1975 to geographic information systems (GIS)- 1994, or 13% of the ILCA total of US$374 mil- derived variables in econometric analysis, lion. The sum of livestock systems research, integrating models through farm, sector which often had a policy component, plus eco- and global levels, including participatory nomics and policy research during the ILCA approaches in field investigations and in the era was US$120 million or 32% of the 1975– derivation of policy recommendations. 1994 total. ILRI lifetime spending on economics and The second scientific impact was to develop policy research has been about US$198 million technical and economic models derived from ori- since 1975, or 11% of the 1975–2018 total of ginal field data that were applicable to policy US$1.75 billion. The sum of economics and pol- problems: icy work plus livestock systems research, which nearly always made some policy recommenda- • Collected and analysed data needed to tions, was about US$375 million, or 21% of the support policy measures, including field 1975–2018 total. surveys, modelling with GIS, bioeconomic models and surveys, randomized controlled trials. • Property rights studies of grazing land, Scientific impacts arable land and tree tenure, leading to site-specific policy recommendations in The scientific impact of economics and policy Ethiopia, Kenya and some countries in West research at ILRI and its predecessors, ILCA Africa. This included demonstrations of the and the International Laboratory for Re- scope and impact of collective action in search on Animal Diseases (ILRAD), has been land rights, livestock value chains and nat- substantial: ural resource management. Economics and Policy Research at ILRI, 1975–2018 641 • Quantification of environmental con- crop–livestock farming systems in Ethiopia straints to growth, including soil erosion after overthrow of the Derg in 1991. constraining higher land productivity in • Evaluation of the effects of property rights, Ethiopia. including traditional informal tenure, on • Identification of barriers to women’s par- land use, land management and tree tenure ticipation in technology and product mar- as it affected incentives to adopt alley farm- kets, notably in Nigeria and Kenya. ing practices. • The landmark work on dairy reform in • Contribution to reforms of animal health Kenya, which used a combination of an in- services in sub-Saharan Africa. novative data set, modelling and communi- • A national programme to control classical cations strategy to achieve substantial eco- swine fever launched in India following an nomic benefits. ILRI study disclosing the economic impacts of the disease in three states in the coun- try’s north-eastern region. • Livestock master plans: the major achieve- Development impacts ment in influencing public expenditure was production of livestock master plans in ILRI’s policy and economics research, with the Ethiopia, Rwanda and Tanzania and in the exception of the Kenya dairy policy effort, had state of Bihar, India. limited identifiable development impact on out- • Capacity development: the main achieve- put or equity. Some indication of development ment was to link economists and scien- impact can be seen in the following: tists in other programmes and in other institutions through the African Livestock • Analytical and organizational contribu- Policy Analysis Network (ALPAN), the Afri- tions to dairy market reforms in Kenya that can Trypanotolerant Livestock Network benefited small producers and poor con- (ATLN) and the epidemiology-economics sumers. The estimated net present value programme started at ILRAD in 1987. The (NPV) of these reforms, in terms of add- epidemiology-economics work has con- itional producer and consumer benefits tinued for 30 years (see Chapters 5 and 6, minus reform programme costs, was this volume) and has had a strong scientific US$230 million. impact in proposing solutions to animal • Purchases of index-based livestock insur- health problems. ance (IBLI) policies in Kenya at an approxi- mate amount of US$25 million and pay- outs to herders of US$10 million; purchases of IBLI policies in Ethiopia of US$2.5 mil- Introduction lion and pay-outs of US$370,000; and adoption by the government of Kenya of a This chapter defines policy as the actions of national IBLI policy, based on the ILRI/IBLI governments and public agencies. Policy actions model, which now provides insurance to can include, inter alia, the writing and enforce- 80,000 herder beneficiaries in the risky ment of laws and regulations; the funding arid and semi-arid areas of Kenya. or conducting of research that investigates • Identification of measures to promote public actions; the provision of information the supply response after the ‘Livestock and other inputs; and the building, operating Revolution’ including supporting infra- or funding of productive infrastructure structure, targeted producer transfers, (e.g. laboratories for disease diagnosis) and definition of the conditions for success- market infrastructure. In their policy actions, ful collective action, and modernization governments typically make use of fiscal in- of sanitary and phytosanitary (SPS) struments such as taxes, subsidies, and wage standards. and price controls, as well as institutional con- • Contribution to the design and analysis structs and measures (organizations, rules of reforms of property rights in mixed and regulations). 642 M. Jabbar et al. Two factors drive demand for public policy. Policy Problems The first consists of market failures (typically characterized by inefficient distribution of The overall goal of economics and policy re- goods and services), negative externalities search at ILRI and its predecessor ILCA has been (when production and/or consumption im- to increase smallholder returns from farming poses external costs on third parties, causing with animals. This research has sought to: social costs to exceed private costs) or of (i) analyse the targeting and productivity of live- ‘free-riders’ (where some individuals consume stock-based technologies; (ii) identify policy bar- more than their fair share or pay less than their riers that lower farm prices, raise input costs or fair share of the cost of a shared resource). To increase the financial, information and risk address such market failures, governments costs of new livestock-related innovations; and may intervene to correct market distortions to (iii) support institutions that improve livestock improve efficiency and equity. The second productivity, create livestock assets and improve driver of demand for public policy is ambitions the performance of livestock value chains. to achieve social objectives of efficiency and The following problems have been the focus equity through public goods that maximize so- of ILCA and ILRI economics and policy research: ciety’s return and ensure the equitable distribu- (i) the historical problem of supply response; tion of returns. (ii) animal health services and productivity; (iii) Zilberman and Heiman (2004) placed stud- responding to the ‘Livestock Revolution’; (iv) ies of public policy into three classes: policy and technical barriers to smallholder • Class I: advancing scientific understand- dairying; (v) livestock and poverty; (vi) markets, ing in describing systems and markets, institutions and competitiveness; (vii) land ten- assessing performance of markets, mak- ure; and (viii) livestock master plans. Economic ing sectoral accounts and estimating and policy analyses linked to specific technolo- productivity. gies are discussed for animal health in Chapters • Class II: contributing to technical change 1–9 and for feed production in Chapters 11–14 that lifts productivity, such as breeding new (this volume). stock or forage plants. • Class III: advising on policies to improve efficiency or equity, such as improving ex- The historical problem ternal terms of trade, building institutions, of supply response investing in public goods, eliminating mar- ket distortions and calculating the costs of An initial problem of policy research at the bad policies. founding of ILCA in the mid-1970s was how to Studies of scientific understanding and stimulate supply through higher productivity. technical change are of a ‘diagnostic’ nature: This led to policy research on the structure of they provide information to agents – individuals, production and trade and on the role of incen- firms and sectors – with or without specific tives in raising production. The research on this policy implications. Such studies may indicate problem had very limited impact and has largely market failures, negative externalities, or free- been forgotten, mainly because it failed to use rider problems and their underlying causes, ILCA’s comparative advantage in farm data ac- and suggest interventions as corrective meas- cess and analysis. ures. The focus of this chapter is on Class I and The initial ILCA policy papers analysed sub- III types of policy studies, ranging from diag- continental trends in production, demand and nostic market performance studies to analyses trade, and their drivers (Montgolfier-Kouevi and of the impacts of interventions and polices. Vlavonou, 1981; Addis Anteneh, 1984; Sand- Table 17.1 summarizes policy research im- ford, 1985). These studies highlighted that Afri- pacts by policy class and gives specific ca’s low livestock productivity and growth rates problems addressed. Table 17.2 gives selected contrasted sharply with the rapidly growing de- applications of bioeconomic models to policy mand for animal-source foods, which implied an problems. increasing dependence on imports. National Economics and Policy Research at ILRI, 1975–2018 643 Table 17.1. Livestock policy research impacts by class and problem. Policy Class II: Policy Class III: Policy Class I: providing contributing to technical improving efficiency Themes information change and equity The problem of Scenario modelling after 1995: McIntire et al. (1992); Perry and Randolph supply response Thornton (2010), Herrero Pingali et al. (1987) (1999) on animal et al. (2010); major impact disease; Jones and for ILCA before 1995; Addis Thornton (2009) on Anteneh on public services crop–livestock (1983, 1984, 1991); interactions as Thornton et al. (2011), affected by climate Robinson et al. (2011) on change mapping global livestock Animal health Addis Anteneh (1983, 1984, Perry et al. (2002) on Perry and Randolph services 1991) animal health and (1999) poverty; Kristjanson et al. (1999) on trypanosomiasis vaccine; McDermott and Arimi (2002) on brucellosis, McDermott and Coleman (2001) on trypanosomiasis control strategies Responding to the Livestock Revolution Livestock Thornton et al. (2002) on Thornton et al. (2002) assets, poverty analytics on poverty poverty, and analytics; Giller financial et al. (2011) on markets targeting technical change Barriers to Holloway et al. (2000a) smallholder on dairying in dairying Ethiopia Land tenure, Verburg et al. (2009), Fritz Reid et al. (2000b) on Coughenor et al. property et al. (2015) on cropland and land use in Ethiopia, (1985) on pastoral rights, and field size Berhanu models, Lawry institutions Gebremedhin on land et al. (1994); conservation in McCarthy et al. Ethiopia, Franzel and (1999) Wambugu (2007) on fodder shrubs Livestock master plans Public investment Randolph et al. (2007) on role Minor impact Coughenor et al. of livestock, Thornton et al. (1985) on pastoral (2011) on adaptation to models, Randolph climate change et al. (2007) on role of livestock, Havlik et al. (2013) on adaptation to climate change; Shapiro et al. (2015) Table 17.2. Selected applications of bioeconomic models, various years. Theme and chapter Region/country/ Policy Technical Problem/study in this volume climate Method Objective function Treatments recommendations recommendations ECF Gettinby et al. Acaricide resistance/ Sub-Saharan Process Minimize acaricide Acaricides Regulate acaricide Elucidate genetic (1988) Ticks (Chapter 10) Africa; simulation resistance in use basis of acaricide subhumid treated tick resistance in ticks populations Mukhebi et al. ECF (Chapters 5 Kenya; Partial budgeting Financial and ITM and acaricides Monitor benefits and Joint use of (1992) and 6) subhumid economic costs of dipping acaricides and returns to ITM frequency carefully ITM and tick control; IRR 48% Nyangito ECF immunization Kenya; Whole-farm Financial returns to ITM and acaricides Monitor benefits and Joint use of et al. and tick control/ subhumid simulation ITM and tick costs of dipping acaricides and (1996a,b) ECF, ticks control frequency carefully ITM (Chapters 5,6, and, 10) Ticks and their East Africa; Literature review Financial and Acaricides in Buffer zones between Strategic application control (Chapter subhumid biological rotation and domestic stock and of acaricides 10) and humid sustainability of combination alternate hosts long-term (wildlife) acaricides Cattle productivity Cartwright Beef production/ Botswana; arid Herd simulation Output and profit Weaning ages of NA Manage weaning et al. (1982) livestock systems maximization calves ages and milk (Chapter 15) offtake policy Konandreas Beef and milk Botswana; arid Herd simulation Profit maximization Feed Supplementation Feed et al. (1983) production/ of product and supplementation economically supplementation livestock systems input choice in cross-bred and superior in (Chapter 15) indigenous cows cross-bred cows; no public policy implications Thornton Dual-purpose beef Colombia; Simulation model Optimize beef Improved grass- None (pending more Not specific (1987)a and milk humid and from station production legume pastures results on pasture production/ subhumid trials and field in dual-purpose outcomes) livestock systems surveys systems (Chapter 15) Feeds and forages Powell et al. Soil fertility Several Survey, station Yield and financial Mulching, manuring, (1995) management/ sub-Saharan trials, tabular optimization of mineral fertilizers, livestock systems African models, organic and crop-residue (Chapter 15) countries; deterministic mineral soil management subhumid simulation amendments and semi-arid Elbasha et al. Planted forages West and Survey, herd Ex post economic Planted forages, Most recommendations (1999) (Chapter 13) Central simulation surplus; ‘fodder bank’ technical; policies African model, tabular ‘research paid (usually include providing countries; model of forage for itself’ Stylosanthes extension subhumid production spp.) information, credit and humid and subsidized seed Kristjanson Dual-purpose Central and Survey and Ex ante economic Improved dual- No technical No policy et al. (2001) cowpea/planted northern tabular model surplus; cowpea purpose cowpea recommendations recommendations forages (Chapter Nigeria; after station grain 128–154% cultivars 13) subhumid trials of NPV gross and benefits; cowpea semi-arid hay from −28% to −54% Kristjanson Dual-purpose pearl 105 districts Ex ante Ex ante economic Higher straw quality Value incremental No policy and Zerbini millet and within nine deterministic surplus; meat in pearl millet and traction and recommendations (1999) sorghum/ states of simulation and milk sorghum manure output, multidimensional semi-arid productivity (IRR value effects in new crops (Chapter 14) India 26–43%) areas (e.g. north-east Brazil) Valbuena Conservation 12 sites in nine Literature and Optimize crop- Mulching versus Value output and soil Favour conservation et al. (2012) agriculture countries in data review residue uses feeding quality agriculture in sites sub-Saharan among feed and with higher mean Africa mulch biomass production Continued Table 17.2. Continued. Theme/part and chapter in this Region/country/ Policy Technical Problem/study volume climate Method Objective function Treatments recommendations recommendations Trypanosomiasis ILCA/ILRAD Trypanosomiasis/ East Africa/ Survey and Optimize use of Trypanocidal drugs, Choice method of (1988) livestock systems Kenya coast; tabular model trypanotolerant sprays, traps, trypanosomiasis (Chapters 2 and 3) humid stock trypanotolerant control as functions stock of challenge, livestock system and susceptibility of animals Itty (1992), Itty Trypanotolerant Several Surveys, herd/ Optimize use of Vector control, Policy choice among et al. (1988) livestock and sub-Saharan flock trypanotolerant trypanocidal treatments as trypanocides African deterministic stock drugs, function of land countries; simulations trypanotolerant potential and stock subhumid stock density Agyemang N’Dama cattle and The Gambia; Herd Profit maximization Milk offtake of Private management et al. (1997) milk offtake subhumid measurements, trypanotolerant recommendation of deterministic stock partial milk offtake simulations Kristjanson Trypanosomiasis Sub-Saharan Ex ante simulation NPV of net benefits Vaccine None et al. (1999) vaccine/ Africa; to vaccine trypanosomiasis subhumid (Chapters 2 and 3) and humid McDermott Trypanosomiasis Sub-Saharan Deterministic Rate of Curative drugs, None and (Chapters 2 and 3) Africa; humid epidemiological trypanosomiasis vector control, Coleman and model without prevalence trypanotolerant (2001) subhumid prices or costs cattle, vaccine Reid et al. Environmental effects Sub-Saharan Survey and Rate of change of Implicit treatments None None (2000a) of trypanosomiasis Africa; humid time-series tsetse infestation of population control/tick-borne and projections as function of growth and land disease subhumid population growth use intensity Dairying Nicholson Dairying Coastal Kenya; Household Impact of dairying Breed, feed, Promoting access of Not specific et al. (1999) humid surveys on income and management, smallholders to employment disease control dairy technology through financial and institutional measures Kaitibie et al. Reform of dairy Rural Kenya, Household Impact of dairy Liberalization of Promoting direct Not specific (2010a) marketing policy mainly surveys, market market reforms raw-milk trade sales of raw milk highlands surveys income and by smallholders employment and traders Other diseases McDermott and Brucellosis/ Arimi (2002), veterinary McDermott epidemiology et al. (2013) (Chapter 5) Kimani et al. RVF/ECF (Chapter 6) Kenya; Simulation of RVF Reduce human and Vaccination and Enhanced Enhanced (2016) subhumid epidemics animal health disease surveillance and surveillance and effects of RVF surveillance earlier vaccination earlier vaccination measured in disability-adjusted life years Vertisol technology and land management Gryseels (1988); Improved drainage Ethiopia; Farm budget Profit/ha Enhanced Vertisol Extend the Target technology to Gryseels and as part of highlands analysis and drainage and technology; reduce poorly drained Anderson broad-bed linear tillage quality cost of the BBM areas (1983); management/ programming Getachew livestock systems model Asamenew (Chapter 15) et al. (1993) Rutherford Improved plough for Ethiopia; Farm and market Estimate return to Enhanced Vertisol Expand credit supply, Expand use of BBM (2008) broad-bed highlands surveys, analysis research in the drainage with reduce cost of the for pond management/ of research and BBM BBM BBM construction and livestock systems development field irrigation (Chapter 15) costs BBM, broad-bed maker; ECF, East Coast fever; ITM, infection-and treatment method; IRR, internal rate of return; NA, not applicable; NPV, net present value; RVF, Rift Valley fever. aThornton (1987) was part of a CIAT effort on modelling beef production, beginning roughly with CIAT (1975). 648 M. Jabbar et al. trends differed significantly and there was signifi- reducing protection to uncompetitive public cant cross-border trade in live animals among agencies, such as parastatals, which were pro- many countries, especially in West and East Af- ducing, trading or processing livestock products. rica. In West Africa, the large cities in the coastal Related studies of import competition in dairy region in the south were major centres of meat products were inconclusive in terms of policy re- and milk consumption, while livestock produc- commendations (von Massow, 1989). tion was concentrated in the arid, semi-arid Two trade studies were conducted around and subhumid zones in the Sahel to the north. the time of the ILCA/ILRI merger in 1995. The A similar pattern – production in the pastoral first compared the effects of livestock policies on and agro-pastoral zones and consumption in output, consumption, trade and government the cities – held in East Africa. This policy work revenues in Côte d’Ivoire, Mali, Nigeria, Sudan established that demand was not a constraint and Zimbabwe (Williams, 1993). The study to growth of African livestock and agriculture found that inflation and exchange rates were key more generally. variables in livestock pricing policies, and that Several early studies, notably Jahnke (1982), some success had been seen in stabilizing real observed the poor incentives for all agricultural domestic prices. As a result of policy changes in production in sub-Saharan Africa due to low of- exchange rates and domestic prices since the ficial prices and overvalued exchange rates as 1980s, there had been a shift away from taxing domestic factors, and as a result of dumping and livestock producers. These changes had positive food aid as external factors. The 1970s and impacts on beef production and consumption in 1980s generated extensive study of price incen- all study countries except Côte d’Ivoire, with tives in global and sub-Saharan African agricul- mixed effects on exports. ture culminating in the landmark work of Schiff The second study reviewed macroeco- and Valdés (1992) to which ILCA and ILRI made nomic, sectoral and trade policies based on infor- little contribution. mation developed for international farm trade ILCA contributions on incentives problems negotiations (Williams et  al., 1995). The study were microeconomic. An ILCA paper argued focused on ruminant livestock in Africa, Asia that international trade and pricing policies and Latin America and on pork and poultry in were particularly important for livestock given West Asia and North Africa. It found that, along the widespread trade in live animals in sub- with macroeconomic, sectoral and trade pol- Saharan Africa (Solomon Bekure and Macdon- icies, investments in infrastructure, animal ald, 1985). First, many people derive income health, and processing and marketing facilities from livestock production and these incomes are were required to promote efficient resource use directly affected by livestock prices. Second, con- and growth in production, consumption and sumers spend an important share of their in- trade. It projected positive effects on livestock come on livestock products and this share will product supply from better incentives through rise with economic growth. Third, livestock pri- trade liberalization, though the effects varied by cing policies are important to governments be- region, country and commodity. cause of their implications for incentives, public spending and revenue. The study further argued that ‘positive’ policies – enhancing effective Markets, institutions measures – improved efficiency in live-animal and competitiveness markets where transport costs were high. Ex- amples of such ‘positive’ policies were gazetting Ruminants animal trekking routes to reduce costs of crop damage along the routes and establishing water Market participation by smallholders can allow and feeding facilities to reduce weight loss and them to expand crop and livestock supply. To mortality in transit. ‘Negative’ policies – elimin- identify barriers to wider market participation, ating ineffective measures – could also improve ILRI policy research has focused on the struc- the efficiency of livestock markets, such as by ture, conduct and performance of product and eliminating arbitrary or discriminatory licens- input markets with a particular emphasis on ing of traders and other intermediaries and by market access. Economics and Policy Research at ILRI, 1975–2018 649 Kebede Andargachew and Brokken (1993) to market opportunities, so better transmission analysed sheep price patterns in the central of demand and price information will benefit highlands of Ethiopia to determine the effects of them. animal and market characteristics and season A series of studies of livestock trade in Ni- on price. Weekly price variations were evident in geria found that markets were quite responsive redistribution, intermediate and terminal mar- to incentives. Regular supply–demand imbal- kets. Animal characteristics (weight, age, body ances, determined by regional comparative ad- condition, sex and colour), as well as purpose for vantage, were corrected by live-animal trade buying and buying season, were important in from other regions of the country (Jabbar, explaining price variation. The findings indi- 1993, 1995, 1998). Seasonal excess demand cated that producers targeted market strategies for small ruminants in southern Nigeria was to gain from coordination of fattening, breeding met by supplies from the north. These findings and trading operations. The study did not find suggested that production technologies that any subtle market inefficiencies that might be contribute to a regular increase in supply might addressed by policy beyond the obvious meas- be appropriate for smallholders, while seasonal ures of increasing market density and lowering commercial production might be geared to peak transaction costs by providing infrastructure. season markets. ILRI collaborated in a study led by the Ethi- A series of studies on cattle breed prefer- opian Agricultural Research Organization ences applying hedonic analysis of cattle prices (EARO) in which hedonic price models were in south-west Nigeria found small but signifi- used to determine seasonal and intermarket dif- cant price differentials by breed (Jabbar et  al., ferences in prices of sheep in Ethiopia (Ayele 1995, 1997; Jabbar and Diedhiou, 2001). In Solomon et al., 2003). There were significant dif- these studies, Muturu, a locally adapted West ferences in prices among seasons and markets. African Shorthorn breed, illustrated the rela- Seasons in which farmers faced severe cash tionship between farmer preferences and market shortages exhibited the lowest adjusted prices for values of cattle breeds. Even though Muturu is animals they sold, indicating that, although live- known for its superior abilities to resist diseases, stock may provide a fallback position for cash in particularly trypanosomiasis, and is productive times of crisis, terms of trade may be worst when under high humidity, heat stress, water restric- farmers need cash the most. In general, there tion and poor-quality feed, the Muturu was rated was no clear progression in price of sheep along the least desirable for market value and mobility. the primary to terminal market chain ending in For producers, the perceived limited marketabil- Addis Ababa as would normally be expected, ex- ity, low market value and the need for mobility to cept that the farthest market had the lowest market are important components of the re- price. In the case of goats, the price differences turns to raising Muturu. For these reasons, between markets followed to some extent the ex- farmers’ aversion to Muturu as an investment pected differences between primary, secondary imply little scope for its in vivo conservation. and terminal markets. One possible reason for Eliciting farmers’ knowledge about traits of the different price progression along the supply breeds and their relationships to prices can be chains of sheep and goats is that, in general, the useful for designing breeding policy and strategy Ethiopian highlands are not a major production for breed development programmes (Jabbar or consumption area for goats, so supplies come et al., 1999). mainly from the lowlands, with the result that Another study on the spatial integration the price movement followed the market chain of livestock markets in Niger found that live- from primary markets in pastoral areas to the stock markets were ‘related, but not closely terminal market in Addis Ababa. On the other integrated’ (Fafchamps and Gavian, 1996). The hand, most of the higher-quality sheep originat- authors suggested policy options for improving ing in both highlands and lowlands are bought livestock market efficiency by investing in ani- by exporters and processors in the intermediate mal transport and lifting official restrictions on markets so both average quality and price are animal trade. lower at the Addis Ababa terminal market. The Ayele Solomon et al. (2003) surveyed live- implication is that producers and traders respond stock markets and traders in the highlands of 650 M. Jabbar et al. the Amhara, Oromiya and Tigray regions in unit distance marketing costs than other ap- 2000 and 2001. They showed that the numbers proaches and hence indicate priorities for public of agents (wholesalers, brokers and retailers) investments to reduce those costs. who trade many species had increased signifi- Bahta and Malope (2014) examined the cantly since the collapse of the Derg regime competitiveness of smallholder beef farmers in 1991. This expansion in the numbers of agents, Botswana using data from randomly selected combined with small numbers of inspectors, producers. There was significant inefficiency, led to many unlicensed traders, irregular inspec- with about 74% of the variation in actual profit tions and a scarcity of fencing, feed and water from maximum profit between farms arising troughs. from differences in farmer practices. The mean Jabbar et  al. (2008) found that Ethiopian profit-efficiency level of 0.58 suggested scope to livestock markets were characterized by non- improve beef profitability with current technol- standardized products and lack of public infor- ogy. Profit drivers included education, distance mation about quantities and prices. Consequently, to market, herd size, access to information and livestock trading was largely a personalized crop income. The main policy lesson was to im- business among brokers with regular buyers prove market access so as to raise profits among and sellers; this regularity is a form of social cap- smaller producers. ital used for gathering information, searching buyers/sellers, negotiating prices and enforcing Pigs and poultry contracts. Business relationships were based principally on trust developed over time, without With the merger of ILCA and ILRAD into ILRI in strong ethnic, religious or family ties. Although 1995, the mandate of the new institute ex- most transactions were conducted in the phys- panded to include pigs and poultry. A series of ical presence of parties, contract disputes were ILRI-led studies in Asia beginning in the 1990s common and were typically settled mainly identified constraints to smallholder production through informal means as formal legal systems in non-ruminant livestock. were absent or expensive. It was argued that pol- Lapar et al. (2003a) studied a cross-section icies to reduce transactions costs and multiple of smallholders in northern Luzon, in the Philip- taxes while increasing access to market informa- pines. They investigated factors motivating tion would improve trader margins and market smallholders’ decisions to sell products or con- performance. sume them as functions of transaction costs, Examining the factors that affect market labour mobility, capital formation and indebted- participation and sales by households, Ehui et al. ness. The strong effect of animal numbers on the (2003) showed that physical capital (ownership participation and selling decisions of farmers of different species of livestock and landhold- suggested that policy interventions may be ings) and financial capital (crop and non-farm needed to support smallholder access to input income) are the main factors influencing market and output markets. The availability of alternative participation and sales, rather than the distance occupation opportunities, however, significantly to markets and towns. These results suggested affected the viability of social and economic that constraints to production of livestock and prescriptions, and policy makers must be cogni- livestock products (e.g. capital to purchase ani- zant of these results when targeting objectives mals, feeds and processing equipment) were the for smallholders. Remittances had a positive in- main factors limiting market participation. fluence on market participation, suggesting the Baltenweck and Staal (2007) explored spa- importance of financial security in enabling tial measures of market access for milk and smallholders to manage risks and subsistence beans in the Kenyan highlands. Measures of requirements. market access were used to create spatial price Costales et al. (2006) studied how scale af- decay functions in relation to transaction costs. fected access to markets by hog producers in The effects of market access differed significantly southern Luzon, a major hog-producing area in depending on the traded good. The analysis also the Philippines. Regional data indicated that be- demonstrated that spatial price formation could tween the 1990s and 2000s there had been an be used to generate more accurate measures of expansion of larger hog farms and displacement Economics and Policy Research at ILRI, 1975–2018 651 of small farms. The study applied a probit model The study on pig contract farming con- to identify factors that determine participation ducted in four provinces in northern Vietnam in hog production and applied a profit-efficiency showed that there was limited scope for small- model to identify the role of transaction cost bar- holder pig producers to participate in formal riers in smallholder performance. The model re- contracts; however, smallholders were found to sults showed that the decision to participate in participate in informal contracts with coopera- hog production was positively influenced by the tives and with input/output traders that facili- availability of family labour and by the cap- tated their access to pig markets. To under- acity to deal with fixed transaction costs for ac- stand the drivers of these smallholders to cess to financial resources. Market participation participate in these types of contractual ar- was negatively influenced by higher opportunity rangements for pig and piglet production, a costs of family labour due to access to off-farm multinomial logit model was applied. The results job markets and by distance to hog markets suggested that the significant determinants of outside the village. Comparison of contract and smallholders’ participation in contractual ar- independent growers among hog producers rangements are age, proportion of time spent showed that most contract growers tended to in pig-raising, location, distance to veterinary specialize in fattening pigs to slaughter. In con- shops and access to animal health services. trast, independent producers tended to combine A study on livestock development in Viet- the production of weaners (piglets) with slaugh- nam identified barriers to input and output mar- ter hogs or specialized in weaner piglet produc- kets for smallholders (Lapar et  al., 2003b). The tion. In general, contract growers had larger uncertain quality and high prices of animal levels of operations than independent growers. feeds, including raw materials for feed process- Contract growers exhibited better access to out- ing, the variable quality and high cost of more put markets and to good-quality feeds and stock, productive animal breeds, and the high costs of feed credit, veterinary health services and credit veterinary inputs were found to be the principal for expansion purposes. barriers in livestock input markets. Constraints One study analysed contract farming in to reaching output markets included poor-quality Bangladesh poultry (Jabbar et al., 2007), while and unsafe meat and meat products, lack of a another covered pig farming in Vietnam legal framework and standards, bottlenecks in (Tiongco et  al., 2009). The Bangladesh study the distribution channel and limited access to in- found three emerging contracts – production formation. In addition, the prevailing marketing marketing, formal input marketing and infor- system and channels for each type of commodity mal output marketing. The profitability of from farm to market have evolved into a mul- broiler farms did not differ significantly be- ti-stage system that is characterized by high tween contract and independent farms, but it transaction costs and lack of market integration. differed between the two sample districts. Con- Another study in Vietnam addressed whether tract layer farms performed much better than national livestock production can remain com- independent layer farms. These differences petitive under rapid demand and import growth were due to differences in the feed conversion (Akter et  al., 2004). The study applied a policy ratio, fattening days and sale weight for broil- analysis matrix to assess the competitiveness of ers, and egg production per bird per laying poultry and pig production based on 1999 data period and length of laying period for layers. from a sample of 2213 farms. Poultry and egg Based on a sample of independent poultry production from cross-bred and exotic breeds farms in five districts, the key reasons for busi- were competitive in the north, while egg produc- ness failure after 1 or more years of operation tion with local breeds was uncompetitive in the were identified as high input prices, irregular south due to low productivity and high per-unit supply of day-old chicks and poor-quality vet- cost. Economies of scale in poultry production erinary drugs. Some input market problems existed in the north but were not so clear in the have been solved by contract farming in other south. Domestic prices of outputs and inputs contexts, but formal contract farming seems to were higher than world prices due to trade have offered few opportunities for commercial protection. In the long run, small poultry poultry farmers in Bangladesh. farmers might not be able to compete in a more 652 M. Jabbar et al. liberalized economic environment with low-pro- of product and input market domains and ductive local breeds and higher per-unit cost; pol- household characteristics that may improve ac- icy support such as access to credit and inputs for cess to information, technology and manage- smallholders would be needed to maintain their ment decisions. competitiveness. In the case of pigs, there are significant dif- Pig production under existing technologies ferences in production behaviour and efficiency and market conditions was highly competitive, levels between the north and the south among especially with local and cross-breeds in the farms producing different breeds, between mixed north and exotic breeds in the south. At the time and specialized farms, between household and of the survey, the producers in the south were ap- commercial farms, and among producers lo- parently benefiting due to a greater role of formal cated in different agroecological regions. Access market conditions, which favoured cross-breeds to better output markets, land size, herd size and and exotic breeds, while in the north, policy education of the household head significantly interventions made input costs higher and out- reduced inefficiency, while access to govern- put prices lower. Some economies of scale were ment-supplied inputs, age of the household demonstrated in pig production, in that medi- head, female-headed households and family- um-sized farms were more cost-effective and supplied crude feeds significantly increased small farms were least competitive. inefficiency in both regions. The direction of Using the same data set for Vietnam, sto- influence on efficiency differs between the two chastic frontier production functions were used regions for access to credit, proportion of output to assess the effects of market and other factors sold at market rather than at the farm gate and on technical efficiency, respectively, in poultry family labour supply. Generally, market-related (Jabbar and Akter, 2006) and pig production (Jab- factors had a more consistent influence on pro- bar and Akter, 2008) In the developing-c ountry duction efficiency in the south of Vietnam, production environment, farm production effi- where the experience of market economics is ciency is often measured in terms of on-farm longer than in the north. Policy actions on pro- resources and producer characteristics. In these viding better extension, more timely access to studies, it was postulated that input and output better-quality inputs through the private sector, market-related factors also influence farm pro- making credit more easily accessible to small- duction decisions and hence farm efficiency. holders and providing opportunity to sell output In the case of poultry, in general there are at better-priced secondary markets are expected significant differences in the production behav- to increase productivity and reduce inefficiency iour and efficiency levels between the north and among producers located in different agroeco- the south among farms producing different logical regions. breeds of poultry, between mixed and specialized In some countries, local products are shield- poultry farms, between household and commer- ed from international competition by ‘natural’ cial farms, and among producers located in factors influencing the purchase of products, different agroecological regions. Sale at market- such as strong local tastes (or preferences) that place rather than at the farm gate, market favour the local product and the absence (or distance and flock size significantly reduced inef- relative absence) of complementary retail out- ficiency in both regions. Contract farming or lets or home appliances suitable for storing and sale, the number of visits by extension staff, fam- preparing potential imported substitutes (Tis- ily labour supply, land size and education levels dell, 2009). The desire for fresh meat rather than of households had significantly reduced ineffi- chilled or frozen meat, the absence of supermar- ciency in the north but had no significant effect ket outlets and limited refrigeration possibilities in the south. The direction and significance of in homes can limit imports into developing influence on efficiency differ between the two re- countries of meat supplied by developed coun- gions for credit use, inputs from government, tries. This study gave some simple economic ratio of home-produced crude feed, producer analysis of how local producers of livestock age and gender of the household head. There- benefit from natural protection. Drawing on the fore, opportunities exist for improving average results of research completed in Vietnam and efficiency through interventions in a number other sources, factors that provide natural Economics and Policy Research at ILRI, 1975–2018 653 protection to Vietnam’s pork industry were to the detriment of non-staff variable costs, such identified, with particular attention given to as drugs and fuel; (iii) cost recovery was their implications for small-scale household pig limited as a share of livestock service budgets; producers compared with larger-scale commer- and (iv) private service delivery was weak, partly cial pig producers. It was noted that the protec- because of resistance from the public veterinary tion of Vietnam’s pig industry was not based on sector. a preference for pork from local breeds but arose Mohammed Mussa and Gavian (1994) re- for other reasons. viewed the privatization of animal health ser- vices in Ethiopia. They argued that vaccination and vector control are public goods because the benefits extend to the whole economy, while Animal health services and productivity curative services (diagnosis and treatment) of non-transmittable diseases are primarily private Policy aspects of animal health research at ILCA goods (although some effects of repeated cura- concentrated initially on institutions – who pro- tive treatments, such as induced resistance to vides animal health services, how can services trypanocides or other antibiotics, would become provision be more efficient and what is the scope public goods). The policy lesson is that preventa- for private provision? Public agencies were tive services work better when managed by the the main providers of animal health services state, while privatization is feasible for curative throughout sub-Saharan Africa before 1980. treatments. After the introduction of structural adjustment The question of payment for public services programmes in the late 1970s and early 1980s was studied by Swallow and Woudyalew (1994) and given the failure of veterinary services to who investigated whether communities in reach many livestock farmers, the form and pri- south-west Ethiopia would pay in cash and/or cing of veterinary services became important labour for trypanosomiasis control. When asked policy issues. The debate centred on the justifica- about the maximum amounts of money and/or tion for public financing of animal health ser- labour that they would be willing to pay, 59% of vices, especially those that could be considered households volunteered both money and labour private goods, such as curative services. and only 3% volunteered neither. Willingness to Addis Anteneh (1983, 1985) reviewed na- contribute money was related to the gender of tional information on the financing of livestock the household head, the number of cattle held services in selected African countries. He found by the household and the participation of the that: (i) services were underfunded with respect household in a monitoring exercise being con- to the share of livestock in agricultural gross- ducted by the research organization. Willing- domestic product (GDP); (ii) costs were mostly ness to contribute labour was related negatively operating budgets and hence capital funding to off-farm employment status of the head of the per staff was generally inadequate; (iii) services household, and positively to the information were largely funded with public resources and available to the respondent about the pro- foreign aid, not with user charges, which dis- gramme. Apart from direct applicability of these couraged user participation in service manage- results to increase local involvement of the af- ment; (iv) there was potential for more public fected population in the control programme, the spending because user charges – head taxes, study stressed that the methodology used here, slaughterhouse fees and taxes – were sometimes when integrated into a participatory research greater than public spending on livestock ser- approach, can generate practical results for vices, indicating that livestock revenue had been evaluating the prospects for local participation diverted to other sectors; and (v) the quality of in the provision of public goods. veterinary services was low because of lack of Hall et al. (2004) evaluated the welfare ef- funding, especially for non-staff variable costs. fects of herd health programmes on smallholder A later study on financing livestock services dairies in central Thailand. Dairy farmers had (Addis Anteneh, 1991, Part 7) arrived at similar appropriate incentives to adopt herd health conclusions: (i) livestock services were again measures; following adoption of control meas- underfunded; (ii) staff costs dominated services ures, there was an improvement in the efficiency 654 M. Jabbar et al. of policy support to dairying. Following a reduc- Eastern markets, but the binding constraint was tion in disease incidence on adopters’ farms, the domestic input costs rather than the costs of study found an increase in farm profits. compliance. Sensitivity analyses revealed that, Outbreaks of Rift Valley fever (RVF) in East while investments in feed efficiency and animal Africa in the past prompted a ban by Middle productivity would enhance Ethiopia’s export Eastern countries on imports of live animals competitiveness, the highly competitive nature from that region. Nin-Pratt et al. (2003a) evalu- of international beef markets may still prevent ated the certification of exported live animals market access by Ethiopia’s beef producers (Rich granted in an RVF-free zone, as a case for Ethi- et al., 2008; Rich and Perry, 2009). opia, as one way of handling RVF and complying Somalia was a traditional supplier of live with international regulations. The study also sheep, goats and camels to Middle Eastern mar- examined policies (export tax, sales tax and in- kets. Following the collapse of the Somali state creased transaction costs) to make producers in 1991, a rapid appraisal identified the institu- bear programme costs. The study concluded tions active in livestock exports (Mugunieri et al., that implementing an animal health programme 2008) to understand informal policies. A more in Ethiopia’s Somali region was economically detailed study was then conducted with export- feasible and would benefit poor livestock produ- ers to understand how the Somali origin satis- cers. It suggested that increasing taxes on live- fied import requirements for product quality and stock sales offered the best way to fund the cost (Asfaw Negassa et  al., 2008). Constraints health certification plan. This option, in which a along the export chains were mapped, and ap- transfer from middle and better-off producers to propriate steps for addressing the constraints poor livestock producers is implicit, reduces were recommended. The recommendations in- harms to exports and welfare and increases cluded: a certification system for health and benefits to the poor. quality; provision of market information, train- While Ethiopia has been a major supplier of ing in market opportunities for traders; forma- animals to Middle Eastern markets, its market tion of trade associations and other collective share has varied (Asfaw Negassa and Jabbar, action forums to share information, capital, and 2008). The reasons included an inadequate strengthen ability to negotiate; and harmoniza- supply of good-quality live animals to the export tion of informal and formal taxes and fees in abattoirs in Ethiopia, with some abattoirs operat- marketing chains. ing at less than half their capacity, which raised Sudan (including South Sudan, which be- the average fixed costs per animal and reduced came independent in 2011) was an historical competitiveness in export and domestic markets. exporter of live sheep and sheep meat to the Mid- Livestock census data revealed very low com- dle East, but its market share has fallen over time mercial offtake rates of cattle and shoats from because Sudanese supply failed to meet Middle Ethiopia’s smallholder farmers and pastoralists. Eastern standards. A study analysing supply- This limited market participation by Ethiopia’s chain constraints for Sudanese exports of sheep smallholders and herders implied that, under and mutton found that they faced long costly the prevailing production and marketing condi- journeys by trekking or trucking, which reduced tions, small-scale farms and pastoral systems were the animals’ health and quality (El Dirani et al., not supplying sufficient numbers of good-quality 2009). A high incidence of disease and mortal- live animals at competitive prices to make efficient ity and low offtake rates among traditional produ- use of the country’s meat-processing capacity in cers limited the supply of high-quality animals. its export abattoirs, lowering the competitive- There were elaborate systems of inspection, test- ness of Ethiopia’s domestic and export livestock ing and screening for diseases and other SPS markets. standards in the supply chains, but, because of In addition, SPS barriers and animal dis- poor enforcement, too many unacceptable ani- eases have traditionally constrained market ac- mals remained in the export lots, which led to cess. A system dynamics model was applied to rejections at destination. Although major mar- examine a proposed SPS certification system. kets in Sudan’s hinterlands were integrated with The model’s results indicated that the system the terminal market in Khartoum, as indicated may not be viable for beef exports to Middle by price cointegration, responses to price shocks Economics and Policy Research at ILRI, 1975–2018 655 were variable among markets, with some come from imports and would therefore pose markets more responsive than others and with both a threat and an opportunity to domestic supply markets responding more quickly and in- producers. tensely to shocks than terminal markets. Policy The ‘Livestock Revolution’ study warned recommendations to increase supply of export that smallholders might not benefit from rapid quality animals were to: invest in health, exten- growth in international trade. It recommended sion and higher-quality inputs leading to in- new measures to defend smallholder interests1: creased offtake rate especially from larger flocks; to reduce rejection rate throughout the long • Removing policy distortions that promote supply chain, increase investment in proper la- artificial economies of scale, such as credit boratory facilities including equipment and and tax breaks and other subsidies and trained manpower; rigorously enforce screening trade protection or support to large-scale procedures and standards, and enhance coord- producers. ination among various agencies involved in sup- • Building institutions to link smallholders to porting export oriented production and trading. markets, for example by facilitating vertical integration of smallholders, cooperatives and other forms of collective action. • Creating public goods through the provi- Responding to the ‘Livestock Revolution’ sion of services for animal health and live- stock extension, research and education. A third policy problem has been how trade and • Regulating the environmental and public globalization affected incentives for livestock pro- health costs of livestock production and duction in poor countries and what policy could consumption, such as water pollution and do to mitigate adverse effects or to exploit favour- land degradation on the one hand and, on able effects. This problem became more acute at the other, the obesity epidemic and the the turn of the century as growing populations, emergence of new human diseases origin- urbanization and rising incomes in developing ating in livestock. countries fuelled a rapid increase in demand for Nin-Pratt et al. (2001) analysed the role of animal-source foods, a phenomenon that be- China as an importer of livestock and other farm come known as the ‘Livestock Revolution’. products. They analysed productivity growth A 1999 collaborative study involving IFPRI, in China’s pig and poultry sectors and projected FAO and ILRI, ‘Livestock to 2020: the next food China’s meat trade to 2010 in a general equilib- revolution’ (Delgado et  al., 1999) – became rium model of the Chinese economy. China’s net known as the Livestock Revolution study, used a trade position was projected to be sensitive to global model to analyse changing supply and de- posited growth of its GDP and its non-ruminant mand as they affected poverty, nutrition and productivity, implying uncertainty in the policy health, and the environment. From 1971 to contexts of other developing countries. 1995, meat consumption in developing coun- A similar study (Nin-Pratt et  al., 2003b) tries grew almost three times as fast as in devel- examined the implications of trade liberalization oped countries. It was projected that by 2020, on Vietnam’s smallholders, including the developing countries would be consuming 100 consequences for poverty alleviation. While the million t more meat and 223 million t more milk impact of trade liberalization on Vietnam’s live- than they had in 1993, dwarfing the projected stock production tended to be small, a more increases in meat and milk consumption in de- open Vietnamese economy would increase com- veloped countries. Again from 1993 to 2020, petitive pressure on domestic producers. per-capita consumption of meat and milk in de- New non-tariff barriers have emerged in veloping countries was projected to increase, re- the form of more stringent SPS standards. The spectively, by 42% and 55%, in contrast to devel- implications of such barriers were studied for ex- oped countries, where meat consumption was ports of live animals from the Somali region of projected to increase by 9% and milk consump- Ethiopia to the Middle East, where the exporters tion to decrease by 2%. Much of the increased faced major high costs of compliance with the consumption in developing countries would standards required by the importers (Nin-Pratt 656 M. Jabbar et al. et al., 2003a). Moreover, a ban on livestock ex- Policy and technical barriers to ports from the Horn of Africa imposed by Saudi smallholder dairy development Arabia in 1998 and 2000 following an outbreak of RVF severely affected trade. The cost to the So- Dairying was an important theme in the early mali economy of the ban was estimated to be at ILCA policy work because of its potential for ex- least US$21.8 million, with the total reaching pansion in sub-Saharan Africa, its potential up to US$36 million under some scenarios. The benefits to smallholders as a source of economic estimated loss in regional value added was growth and the growing political problem of ris- US$195 million, almost equal to the value added ing imports. Early stage studies were conducted produced in an average year. In the short run, in Nigeria, Ethiopia and Kenya. middle- and higher-income households could Research in Nigeria has examined demand, manage the negative effects of the Saudi import price determinants, policy reforms, and market ban by increasing consumption. Poor pastoral- development. Jabbar and di Domenico (1990, ists with limited production capacity, however, 1993) and Jansen (1992) described dairy con- would lose income because increased consump- sumption and its determinants in northern and tion of their own production was insufficient to southern Nigeria. In both regions of Nigeria, the compensate for export losses. type of product consumed, and the frequency of An important concern from the Livestock consumption differed markedly among ethnic Revolution was that large producers would dis- groups and between urban and rural popula- place smallholders as markets opened because tions. In the south, per-capita income of they could exploit economies of scale in production dairy-consuming households did not differ sig- and in finance. A study in Bangladesh analysed nificantly. Among the consumers, the income the effects of policy and scale on the efficiency of elasticity of dairy consumption was higher for dairy and poultry farms (Jabbar et al., 2005). For rural households in the south-east. In northern dairy, they showed that breed, management, feed Nigeria, dairy product demand was found to be cost, choice of markets and access to credit for income inelastic, and larger households tended liquidity and to extension contact at times of real to consume relatively fewer dairy products per need to solve a production constraint were sig- household member than smaller households. nificant variables affecting the profitability and The strongest conclusion from these studies was efficiency of dairy farms. Policy interventions – that pricing structures and local consumer pref- infrastructure, waste management, access to fi- erences for traditional products argued for devel- nance and creation of producers’ organizations – opment of traditional production systems using favouring small farms would increase the overall indigenous cattle breeds. Production increase efficiency of the dairy sector. would require provision of breeding and health Baker and Enahoro (2014), in an overview services and better feeds. Support for better of six studies, argued that information from a processing, storage and transportation of trad- large number of household studies on livestock itional products would be required to access was not fully utilized by aggregate models, which higher-income urban consumers. failed to recognize heterogeneity, dynamics and exogenous forces on livestock systems. House- Dairy reform in Ethiopia hold-level studies are not standardized and rarely identify and characterize key drivers and The question of dairying potential was particu- mechanisms for exploiting heterogeneity in pol- larly important in Ethiopia, where bad policies icy analysis. The analysis defined and addressed had limited growth in dairying. A sequence of the dichotomy in approaches to policy analysis studies – Mbogoh (1984), von Massow (1989) for developing countries’ livestock sectors and and Brokken and Senait Seyoum (1992), and the gap in analytical approaches and identifies later Mbogoh (1992) and Mbogoh and Ochuonyo aspects of the way forward. Evidence was pre- (1992) – identified policy and technical barriers sented of inconsistencies and practicalities that to dairying in Ethiopia. A later review of dairy emphasized the gap, but all studies presented development in Ethiopia over 50 years: (i) identi- evidence of integrative progress and listed op- fied trends in production, consumption, policy portunities for accelerating it. and development interventions; (ii) provided Economics and Policy Research at ILRI, 1975–2018 657 evidence of the potential impact of improved in what appeared to be a single market (e.g. fluid dairy cattle; (iii) examined factors that promote milk in Addis Ababa) explained why produ- smallholder dairying; and (iv) identified policy cers accepted widely different prices for a homo- and technology issues for public interventions geneous product in the same markets; and (Ahmed et al., 2003). (iii) contracts between producer and buyer co- Ethiopian dairying has passed through operatives played a central role in reducing three phases, matching shifts in national eco- transaction costs. nomic policies. Since the early 1990s, the transi- Subsequent work explained the impact of tion to a market economy has taken place and transaction costs and the choice of production the dairy sector has been growing. Milk produc- techniques on decisions to sell fluid milk to Ethi- tion during the 1990s expanded at an annual opian cooperatives (Holloway et  al., 2000a,b). rate of 3.0% compared with 1.6–1.7% during Creating local markets to minimize the time re- the preceding three decades. Some 60% of the quired to sell milk increases the number of produ- growth in milk production was due to herd cers and amounts sold. Institutional investments, growth; only 25% was due to higher productiv- such as the formation of milk groups, provided a ity per animal. less costly mechanism for increasing market There were institutional reasons for lower participation. Although milk groups are a sim- productivity in Ethiopia. Although dairy co- ple institutional innovation, they appear to be a operatives in Ethiopia were not as strong as in necessary first step in developing more sophisti- Kenya, cooperatives induced increased partici- cated cooperatives. pation of smallholders in fluid milk markets in Farmer cooperatives have been identified as the Ethiopian highlands. The survival of the catalysts to market participation. Analysis of milk groups that supplied inputs and processed data from the Ethiopian highlands where farm- and marketed dairy products depended on their ers organized themselves in a dairy cooperative continued ability to capture value-added dairy showed that male household heads and exten- processing and to return those value-added sion visitations affected cross-bred cow adoption benefits to their members. positively, while credit use and the number of Contrasts between Kenyan and Ethiopian local-breed cows currently milked affected adop- dairying were investigated to elucidate the roles tion negatively (Holloway et  al., 2000b). Male of cooperatives in reducing transaction costs. heads of household, extension visits and the The similarities of the highland agroclimates in number of local-breed cows affected output Kenya and in Ethiopia imply that dairy develop- positively, while credit use affected output nega- ment in Ethiopia would benefit from the Kenyan tively, as did distance to market. This study also experience, yet Ethiopia’s dairy system was for suggested that extension is a potentially import- many years less productive than Kenya’s. Part of ant catalyst for market expansion. Consequently, the difference was attributed to informality – in several important questions arise concerning the early 1990s, Ethiopia had not developed a the actual impacts of extension on participation, formal dairy system and some 88% of urban the number of extension-requesting households milk supply passed through informal markets willing to pay for services if it was privatized, the (Staal, 1995). Another reason was policy tax- corresponding demand schedule for extension ation – Kenya and Ethiopia both had an inter- services and the requisite conditions for the national comparative advantage, but Ethiopian existence of a private market for the service. supply was restrained by an overvalued cur- One study addressed these transactional rency causing low domestic producer prices. The issues (Holloway and Ehui, 2001). For each unit devaluation of the Ethiopian birr (ETB) in the increase in extension, the transaction cost was early 1990s greatly improved the potential of lowered by ETB0.62. Hence, extension was agricultural production for import competition shown as a promising market-entry catalyst. and for export markets. Furthermore, the willingness to pay for one add- Staal et  al. (1997) argued that: (i) the itional extension visit ranged from ETB0.6 to growth in smallholder dairying was limited by ETB6.7. The study estimated the marginal cost of high transaction costs for both production and each extension visit at ETB2.1, based on the an- marketing; (ii) transaction costs across producers nual extension budget of the local administrative 658 M. Jabbar et al. units and the estimated number of extension which was further demonstrated by predictions visits made during the year. The willingness to of technology uptake changing with a shift in pay estimates showed that some 39% of partici- infrastructure policy. Although requiring large pating households would purchase extension geo-referenced data sets and high-resolution GIS services. layers, the methodology demonstrated the po- Reinforcing the findings of Holloway et al. tential to better unravel the multiple effects of (2000a), other studies found that households location on farmers’ decisions on technology with a higher education level, a larger number and land use. of cows and a greater non-farm income were The above study was done within the frame- positively associated with value of sales of dairy work of ILRI’s Smallholder Dairy Project, a joint products. This suggests that income from the initiative with the Kenya Agricultural Research sale of milk, butter and cheese can be increased Institute (KARI) and the Kenya Ministry of Live- through education and training, especially tar- stock Development, which began in 1997 to geting women (Holloway et  al., 2000b; Ehui address farming practices, marketing and exten- et al., 2003; Lapar and Ehui 2004). sion. The policy aim of the Smallholder Dairy Project was to achieve a better policy environ- Dairy reform in Kenya ment for raw-milk trading to raise producer prices and to improve supply from smallholders. The most productive policy research at ILRI was A policy-change strategy was developed, which the long-term engagement in Kenyan dairying. included generating evidence about raw-milk Kenya was an attractive site for policy research markets and working with civil-society organ- in that its dairy sector was highly productive, it izations who were voices in policy advocacy and had high unrealized potential and major policy had connections to public agencies. barriers to achieving that potential, and it had a Until 1992, the Kenyan Dairy Board (KDB) base of technical and economic research to in- officially controlled dairy pricing and marketing. form policy recommendations. During the early 1990s, as input prices paid by In a study of adoption of improved dairy producers increased at a higher rate than the cattle and related technologies, a methodo- KDB-controlled prices of milk, producers began logical innovation was generated by applying to divert sales to the informal market. Conse- GIS-derived variables in econometric analysis. quently, supply to Kenya Co-operative Creamer- This study by Staal et  al. (2002) demonstrated ies (KCC) fell substantially, causing shortages of the usefulness of integrating GIS-measures into processed milk in the formal market. To stimu- analysis of technology uptake for better differ- late supply, the Kenyan government announced entiating and understanding locational effects. the liberalization of dairy prices and the lifting of A set of GIS-derived measures of market access the KCC monopoly on processed milk sales to and agroclimate were included in a standard urban areas. The market response was an in- household model of technology uptake, applied crease in raw-milk supply to the KCC and, conse- to smallholder dairy farms in Kenya, using a quently, in supply of processed milk to retailers. sample of 3330 geo-referenced farm house- The benefits of policy reform were limited, holds. The three technologies examined were however, because few dairy traders entered the keeping dairy cattle, planting specialized fodder market owing to the dominance of KCC, which and using concentrated dairy feed. Logit es- obstructed price liberalization. The raw-milk timations were conducted that significantly sales policy, however, did not change. differentiated the effects of individual household The path from policy research to policy characteristics from those related to location. change in Kenya dairying has been well chron- The predicted values of the locational variables icled (Leksmono et  al., 2006; Kaitibie et  al., were then used to make spatial predictions of 2010b). A first step was to investigate dairy mar- technology potential. Comparisons were made ket liberalization with a policy analysis matrix with estimations based only on survey data, which (Staal and Shapiro, 1994). Following output demonstrated that, while overall explanatory price liberalization, Kenya continued reducing power may not improve with GIS-derived variables, government support and intervention within the latter yielded more practical interpretations, the livestock sector, specifically for veterinary Economics and Policy Research at ILRI, 1975–2018 659 and artificial insemination services. Policy ana- concerns were likely to lower milk consumption lysis by ILRI measured the changes between in Kenya, would reduce health benefits to the 1990 and 1995 in milk marketing and service country’s low-income consumers, and would provision by the dairy farmer cooperative soci- destroy the livelihoods of hundreds of thou- eties, which played a central role in meeting the sands of small producers and vendors. needs of dairy production (Owango et al., 1998). The KDB and milk processors repeatedly Most notable were the changes in the unregu- challenged the public statements made by the lated raw-milk market, which helped increase civil-society organizations but were unable to real market prices paid to producers by up to produce evidence to back up their anti-raw-milk 50%. Large increases were also observed in the claims, whereas the robust evidence from the provision of veterinary and artificial insemin- Smallholder Dairy Project strongly supported ation services by the dairy cooperatives, whose the arguments of the civil-society organizations. producer base and credit facilities allowed them Some change in perceptions by the KDB oc- to compete with independent private traders. curred when it visited a group of project-trained A contentious policy issue following market milk vendors and saw that the vendors demon- liberalization was regulation of the informal strated good milk-safety practices. milk market, a complex network of farmers and A Dairy Policy Forum was held in May groups selling raw milk directly or through 2004 at the close of the Smallholder Dairy Pro- venders to consumers or shops. The price liberal- ject, where farmer advocates and senior officials ization of 1992 allowed other private milk pro- were prominent. At the forum, the minister of cessors to enter the market, causing the near livestock committed the government to passing collapse of KCC. The liberalization was also in- the stalled Kenya Dairy Bill and to take into ac- terpreted as allowing the sale of raw milk in count the mass of evidence and stakeholder urban areas, which was technically illegal, and opinion presented. In time, the KDB came to the raw-milk market quickly expanded through view the training and certification of raw-milk small vendors (Staal and Shapiro, 1994). By traders as an intermediate step towards formal- 2000, this market was estimated to control 80– izing the country’s small-scale milk trade rather 90% of the total liquid milk market, even though than as a means to promote raw-milk trading. it was fiercely opposed by the KDB, and officials An external evaluation used a ‘Research retained the authority to confiscate illegal vend- and Policy in Development Outcome Assessment’ ors’ milk and equipment. Research by the Small- approach to document how the Smallholder holder Dairy Project found that this authority Dairy Project research and policy engagement imposed constraints on the markets for milk strategy led to the policy change (Leksmono from smallholders as the price for milk paid by et  al., 2006). The study concluded that the the vendor decreased with the quality of milk Smallholder Dairy Project was the principal bought, even though a larger volume of sales driver of the policy changes, notably because of would be expected to impose lower unit transac- the following: tion costs. This result was thought to be due to the fact that vendors were restricted to handling • Private processors changed their marketing relatively small quantities (e.g. 30  litres/day) strategy to focus on the value and safety of due to risks of confiscation (Staal et al., 2002). processed, packaged milk without overtly Larger producers opposed the reform. The attacking small-scale milk vendors. Some Kenya Dairy Processors Association launched a processors also encouraged small-scale milk high-profile ‘Safe Milk’ campaign against raw- vendors to trade in processed products. milk marketing. The Smallholder Dairy Project • Virtually all subsequent projects in Ken- and its civil-society organization partners re- ya’s dairy subsector have used the research sponded by publishing some of their results in results of the Smallholder Dairy Project, the local news media. In addition, the civil-society and many have also linked with the pro- organization partners held a press conference to ject’s implementing institutions in other contest this campaign’s anti-raw-milk messages dairy- related activities, both in service- using evidence from the Smallholder Dairy delivery and policy-related areas (Leksmono Project showing that unsubstantiated health et al., 2006). 660 M. Jabbar et al. • One point of opposition to reform was by other projects led by the national agricultural health risks from drinking raw milk. Prod- research system, ministry and non-governmen- uct quality analysis showed that if milk is tal organizations in Kenya and elsewhere in East boiled, a near-universal practice in Kenya, Africa. The project created greater regional it is almost entirely safe. To further improve awareness among policy makers in Ethiopia, hygiene in the informal milk sector, the Tanzania and Uganda of pro-poor policy impli- Smallholder Dairy Project developed a cations of small-scale milk markets. The Associ- training programme for informal vendors ation for Strengthening Agricultural Research to teach them improved practices for hand- in Eastern and Central Africa (ASARECA) and ling milk. its policy programme, the Eastern and Central Africa Programme for Agricultural Policy Ana- Eventually, the work of the Smallholder lysis (ECAPAPA), built on the Smallholder Dairy Dairy Project achieved an agreement to train Project and ILRI policy recommendations to and certify small traders of raw milks, with the seek harmonized pro-poor dairy policies in the KDB taking up the training and licensing of region. Through ECAPAPA, dairy policy makers traders using guidelines and training materials and regulators in Rwanda, Tanzania and Uganda developed by the Smallholder Dairy Project. adopted new institutional approaches and ap- There were further revisions of the draft Dairy propriate technologies to harmonize stand- Industry Act, stalled since 1997, to recognize ards and improve informal milk markets across and formalize the role of small-scale raw-milk the region. traders and to increase the number of groups ILRI’s results were used to: (i) promulgate representing poor farmers. common dairy industry standards in East Africa; The change in Kenyan dairy policy to allow (ii) advance a regional agreement to promote greater market participation by small producers the movement of certified milk traders across had the principal effect of lowering transaction borders; (iii) publish training materials for milk costs, thereby raising prices to producers and standards, and provide certification of milk lowering prices to consumers. An economic sur- traders and accreditation of their trainers; and plus model was used to compute economic bene- (iv) train and provide certification of informal fits of these price shifts, with movements in the milk traders by involving private trainers. milk-supply curve being attributed to the policy In 2016, ILRI began working with the state changes affecting the informal market. Kaitibie government of Assam, India, where the infor- et al. (2010b)2 reported a best estimate of the net mal market suppled the great majority of local benefits of the reform to have an NPV of US$230 milk. Working closely with Assam’s Dairy Devel- million over 1997–2039. opment Department, the training and certifica- A study following the Kenya dairy reform tion approach of the Smallholder Dairy Project clarified the reasons for its political support. Infor- was adapted for Assam and was piloted locally, mal milk markets created more employment per again with a local non-governmental organiza- unit of product than did formal markets. A study tion as the main training service provider. Stud- by Omore (2004) of employment in milk markets ies showed that trained vendors sold safer milk in Kenya, Bangladesh and Ghana found that in- and demonstrated better knowledge of hygiene. formal milk markets employed up to five times as This is thought to be the first time in India that many people per 100 litres of milk handled. public funds have been devoted to improving the The Smallholder Dairy Project in Kenya not informal (or unorganized) milk market (Lindahl only benefited the dairy sector and the wider et al., 2017). economy in Kenya, its experiences created posi- tive externalities (international public goods) in the East Africa region and beyond. The partner- ship and communication strategy in this reform Comparisons of dairying in South led to the Smallholder Dairy Project receiving Asia and East Africa the 2004 CGIAR Communications Award. The project’s extension materials and market agent ILRI and FAO’s Pro-Poor Livestock Policy Initia- training materials and methods were taken up tive studied dairy development in East Africa and Economics and Policy Research at ILRI, 1975–2018 661 South Asia to assess the roles of policies and in- The study found that demand factors ex- stitutions and their impact on the poor (Staal plain much of dairy development in East Africa, et al., 2008a,b,c). The dairy sector in South Asia as shown by the rapid growth of milk production followed a different path to that of East Africa. in Kenya, Sudan and Uganda. Development of Consumption of dairy products is higher on formal milk markets, input markets, technology average in South Asia than in East Africa owing and policy do not explain the differences between to demand factors. Differences in growth in fast-growing countries and the rest, which may South Asia are more related to the possibility of imply that much of the increased production in expanding supply to match the growing demand response to demand came from herd growth ra- for dairy products. Multivariate econometric ther than from productivity growth. models incorporating technology and policy fac- This finding of lack of significance of input tors showed that India and Pakistan were able to market and technology on output growth was link the agricultural transformation originating supported by an earlier study by Freeman et al. in the Green Revolution to successfully expand (1998) that analysed the impact of credit on milk production; this is reflected in the contribu- milk output by smallholder dairy producers in tion of input markets and technology to growth Ethiopia and Kenya. It found no consistent rela- in milk production. In the case of countries with tionship between farmers’ credit constraints and slow growth in milk production, such as Bangla- their borrowing. However, farms that were credit desh and Nepal, development of cereal production constrained increased output more when given and feed markets and a growing demand did not access to credit than farms that were not credit induce a technical change in dairying, as was the constrained, indicating that the credit constraint case in India and Pakistan. As in East Africa, de- did limit the supply response. This finding indi- velopment of formal milk markets in South Asia is cated that demand for credit become important not associated with increased growth rates. to acquire inputs to increase output for market. Detailed analysis of the drivers and impacts These results suggest that adjusting supply of dairy sector growth on employment, income to type and quality of products demanded, ex- and nutrition was done for Ethiopia and Kenya panding demand by reducing consumer prices in East Africa and for India and Pakistan in and reducing transaction costs will contribute to South Asia. Although informal and commercial expand the dairy sector in East Africa. dairying coexist in both regions, informal production still dominates and is generally com- petitive. For example, the study conducted an Land rights analysis by district across India, which sought to find evidence that the presence and success of Land rights are legally or socially enforceable cooperatives was associated with greater dairy claims. They can be permanent via ownership or development. However, there was little evidence temporary via rental or other fixed-term con- towards this, which suggests that India’s well- tracts. The analysis of land rights in animal pro- known Operation Flood, which used revenues duction is important for two reasons. First, land from donated imported milk powder to fund is the primary factor in both grazing and mixed dairy cooperative development, did not play any systems. Second, nearly all modern efforts to ex- significant role in driving dairy development in pand agricultural production necessarily involve India, where to this day the dairy cooperative more intensive land use, lowering the amount of sector retains a relatively small market share. land used per unit of output, whether that out- The evidence suggests that relatively efficient put is forage, an arable crop such as rice or a per- informal milk markets played the key role in manent crop such as coffee. linking producers to growing consumer de- ILRI research on land rights has had four mand. In fact, the dairy industry grew more themes: (i) early work on pastoral systems, quickly in Pakistan, where cooperatives played focusing on group ranches and enclosures; almost no role, than in India. Policies that build (ii) studies on land tenure, resource allocation on traditional production systems, with new and productivity beginning in the early 1990s; focus on employment, food safety and quality, (iii) collective action for common resource man- are expected to be pro-poor. agement; and (iv) land rights and fodder trees. 662 M. Jabbar et al. Pastoral systems farming, falling range productivity outside the enclosures and falling costs of enclosures. Land tenure differs markedly between pastoral The Maasailand study (Solomon Bekure and mixed systems. Pastoral/agro-pastoral sys- et al., 1991) conducted in Kenya was exceptional tems typically use land held in common. Mixed in that it made detailed policy recommendations systems depend on private or social land tenure about the land rights of pastoralists. that recognizes certain rights that can be appro- The Borana study (summarized by Coppock, priated by individuals or communities. 1994) in southern Ethiopia found that the Borana A common historical view of land rights in system was moving from traditional pastoralism African pastoralism was that such rights did not to a semi-sedentary system with more reliance exist or were not enforced. It was argued that on crops and private grazing. This study high- this market failure made land use inefficient by lighted the need for a strengthening of trad- weakening incentives to improve it. A common itional authority in resource management. It political and development perspective on pas- further concluded that the agroecological diver- toral land tenure was that it could be ignored as sity of the Borana rangelands called for selective a subject of scientific evaluation; for example, policies that supported crop–livestock integra- the first major ILCA book was entitled Evaluation tion and extensive livestock production as neces- and Mapping of Tropical African Rangelands but sary rather than a ‘one policy fits all’ approach said nothing of land tenure or of changes in to the entire area. traditional forms of land management (ILCA, In the early 1990s, ILRI sponsored two lit- 1975) as possible remedies on overgrazing. Pratt erature reviews on land tenure and property and Gwynne (1977) mentioned pastoral tenure rights. The reviews of 18 studies on land tenure in East Africa as a barrier to be dismantled on in Africa (Swallow, 1994; Swallow and Bromley, the path to stopping overgrazing, to sedentariz- 1995) asked the following questions: ing pastoralists and ultimately to a generalized How do property institutions affect the use extension of ranching. The historical work of • and management of resources? Gallais, who had meticulously characterized the How do property institutions create or deny land administration of the Peulh herders of cen- • opportunities for the adoption of new tech- tral Mali in the 1950s (Gallais, 1967) and later nologies and expansion of agricultural pro- proposed a modern legal codification of that sys- duction? tem (Gallais and Boudet, 1980), had little effect3. How does the structure of government af- Land rights of common property range- • fect property institutions? lands was, on the other hand, of immediate How do changes in economic and tech- interest to ILCA researchers. Sandford’s magis- • nical conditions affect resource use and terial book, Management of Pastoral Develop- property institutions? ment in the Third World, which is still the most often cited work in the history of ILCA/ILRAD/ The review by Swallow and Bromley (1994) ILRI, presented a scheme for allocating land indicated that groups of livestock owners could ‘among uses and among users’ (Sandford, 1983, manage common property rangelands without pp. 135–136). formal organizations or institutions if the group Early research published by ILCA on Soma- was relatively small, if entry into the group was lia and Sudan found spontaneous range enclos- costly and if the members of the group did not dis- ures – the assertion of private property rights in count the future heavily. Thus, a local rangeland grazing and the defence of those rights by fen- management regime could only be effective if its cing (Behnke, 1986). Such spontaneous en- institutions were governed locally. It was argued closures were influenced by density-dependent that it was more effective for governments to en- factors – commercial animal husbandry, com- force boundaries among groups than to seek to mercial fodder markets and ‘heavy stocking of establish the internal group conditions for efficient pastures’ – and by density-independent factors – resource management (McCarthy et al., 1999). drought, water development and official land- A collaborative project titled ‘Property rights, tenure policies. Behnke found that spontaneous risk, and livestock development’ implemented by enclosures responded to increasing profits from ILRI, IFPRI and the Göttingen Research Institute Economics and Policy Research at ILRI, 1975–2018 663 for Rural Development during 1996–1999 Derg) took power. Under the monarchy, most of sought to support reforms of property institu- the land had been held by the aristocracy and tions and land policies in the semi-arid areas of the church. The Derg nationalized all land and sub-Saharan Africa. The specific objectives were: redistributed it to farmers on a per-capita basis (i) a better understanding of how environmental using local norms, giving them usufruct with no risk affects the use and management of re- right to sell, rent or transfer. There was provision sources under alternative property rights re- for periodic redistribution when new families gimes; (ii) identifying circumstances under were formed or when some families abandoned which land use and property rights change; and farming. The period of the Derg was one of sus- (iii) identifying how policy and other external pended animation as far as ILCA research on interventions can assist communities to achieve land issues was concerned. desirable pathways and mitigate negative im- Property institutions changed slowly after pacts of undesirable pathways (ILRI, 2000). the overthrow of the Derg in 1991. The new Part of the ILRI/IPFRI/Göttingen study fo- government began to tolerate decollectivization, cused on the Borana rangelands in semi-arid labour mobility and informal renting within southern Ethiopia (Kamara, 2001), where IL- extended families. Changes in land use and the CA’s historic 1994 study of the pastoral system resurfacing of rural factor markets following de- in the Borana area was characterized by exten- collectivization provided evidence that emerging sive livestock production and was a valuable factor markets brought better land use. There source of young stock for power and for export were observed changes in adoption of soil con- (Coppock, 1994; see Chapter 15, this volume). servation, tree planting, crop rotation and fallow Development in Borana was limited by aridity, practices, and increased use of organic and inor- causing low plant biomass productivity, and by ganic fertilizers associated with the new land periodic droughts, causing herd deaths. policy. Selling, hiring, renting, and trade of land, The Kamara (2001) study focused on the ef- labour and draught animals also grew (Omiti fects of environmental risk, market variables and et al., 1999, 2000). population pressure on land use and property The study of land rights in Ethiopia after rights. The results largely conformed to the prin- the collapse of the Derg was an important part cipal hypotheses about institutional change. of ILRI’s policy research in the 1990s. One study Community cooperation in resource manage- identified factors influencing the evolution of ment was determined by demography, wealth, land-tenure institutions to determine the effect off-farm income and social capital. Rainfall vari- of land tenure on investment, productivity and ability affected stock densities only in areas of efficiency in crop–livestock systems and to assess high rainfall variability. Market variables did not the impact of tenure on household access to determine stock densities or community level co- feed. For instance, the issue of land access by pri- operation but did affect land allocation to crops. vate commercial investors and land tenure and Changes in property rights were explained by a farming practices in the highlands of Ethiopia ban on wildfires, the creation of peasant associ- was presented in one paper (Gavian and Amare ations, sedentarization programmes and devel- Teklu, 1996) and a second paper presented evi- opment interventions (Kamara, 2001). A related dence on the nature of access to land by farmers study in the same area had examined the evolu- in one region of the Ethiopian highlands (Gavi- tion of land rights (Kamara, 2000). Kamara an and Ehui, 1999). found substantial privatization of land, related to Two studies dealt with the efficiency of land the change in national policies after the fall of the tenure contracts (Gavian and Ehui, 1999; Derg in 1991 and, chiefly, as function of rapid Ahmed et al., 2002). The first indicated that, al- growth in population density and cultivation. though the informally contracted lands were farmed 10–16% less efficiently, the hypothesis Land tenure, resource allocation that land tenure is a constraint to agricultural and productivity productivity was rejected. The second found higher technical efficiency between owner- An armed revolution overthrew the Ethiopian cultivated or rented plots and sharecropped, or monarchy in 1974 and a military regime (the borrowed plots. This difference was attributed to 664 M. Jabbar et al. restrictions imposed on the tenant in the share- tenure insecurity in western Niger would not cropping and borrowing contracts, which some- justify a major change in the tenure system. times involved labour and animal power supply by the tenant. A mild policy recommendation Collective action for common resource was to ‘facilitate more efficient transactions’ management Benin and Pender (2001) found that crop yields in the Amhara region were significantly A subset of the land tenure–productivity prob- higher, particularly in villages where the last lem is that of collective action in common re- major land redistribution took place in 1997– source management. A long-term area of study 1998. The authors also found that plots on by ILCA and later by ILRI was traditional agri- which households felt more secure (i.e. expect- culture in highland central Ethiopia which was ing to operate the plot for the next 5 years) were long constrained by lack of modern inputs, a associated with higher crop yield, suggesting variable environment and a severe risk of soil that security of tenure may be associated with erosion. Collective watershed management had other yield-enhancing management practices. been proposed as a model to manage modern Together, these results suggest that improving inputs while controlling soil erosion. The policy tenure security can bring about substantial in- question was whether collective watershed crements in crop productivity. management, as a form of tenure, could achieve Examining the evolution since 1991 in these policy objectives. land rental markets of the highlands of nor- A public-goods problem of watershed devel- thern Ethiopia, Benin et al. (2005) showed that opment in Ginchi, Oromia, was presented in a changes in the production environment and nat- game-theoretical model to study the logic of vol- ural resource endowments, changes in human untary contributions to an indivisible public capital, access to credit, commercialization of good: namely, a central drainage channel to cereal production and tenure security are the solve a waterlogging problem that constrained major forces contributing to the changes in land early planting of a high yielding wheat variety rental arrangements. Reduction in production (Gaspart et al., 1998). The most striking result of risk, through increased availability of moisture this study was that there is indeed a clear posi- or reduced degradation of soil, has reduced the tive relationship between the magnitude of per- need for risk-pooling arrangements associated sonal stakes and the effort spent on building the with sharecropping in favour of fixed-rent drainage channel. In other words, in the equilib- leases. Furthermore, increasing commercializa- rium selection process, a social norm of the kind tion of cereals caused an increase in land ren- ‘from each according to his expected gains’ tals, while an increase in credit supply caused seems to have been at work to favour coordin- an increase in fixed-rent leases. The same work ation of individual efforts. Out of 33 members of showed that alternative land rentals had a posi- the community who contributed to drain con- tive impact on cereal yields, suggesting that ten- struction, five had additional leadership roles. ure innovations after the eviction of the Derg Even though, taken singly, the leadership factor had evolved to reduce production inefficiencies. was the most statistically significant independ- The most widely cited paper on land tenure and ent variable, taken together it was self-interested investment in Ethiopia (Deininger and Jin, considerations that played the major role. 2006) found that tenure security could en- A bioeconomic model was developed to hance agricultural productivity and that public evaluate watershed management in central policy to improve tenure security would there- Ethiopia. The baseline in the model showed that, fore be justified. without technological or policy intervention, in- Related evidence from semi-arid Niger gave come and nutrition could not be sustainably im- evidence on ‘traditional land tenure [as] an im- proved in the watershed without serious soil pediment to allocative efficiency’ on millet farms losses (Okumu et al., 2004). Although cash in- (Gavian and Fafchamps, 1996). Gavian and Faf- comes could rise by more than 40% over a 12- champs found that land security was important year period, average soil losses could be as high for input allocation decisions, such as the use as 31  t/ha. With the adoption of a package of of labour and manure, but that the degree of new land-management technologies, however, Economics and Policy Research at ILRI, 1975–2018 665 the model projected, on average a 10% increase region revealed different causal factors for soil in cash incomes and a 28% decline in aggregate conservation adoption versus intensity of use erosion. The policy implications were: (i) the (Berhanu Gebremedhin and Swinton, 2001). need for more secure tenure to promote new Farmers’ reasons for adopting soil conservation technology; (ii) a shift from subsistence livestock measures varied sharply between stone terraces management to commercial; and (iii) a site- and soil bunds. Long-term investments in stone specific approach to land management within terraces were associated with more secure land the watershed (Okumu et al., 2004). tenure, more labour availability, proximity to the A study in Tigray region, in northern Ethi- household and learning opportunities via local opia, investigated the determinants of collective food-for-work projects. By contrast, short-term action and its effectiveness in managing com- investments in soil bunds were strongly linked to munity woodlots (Berhanu Gebremedhin et  al., insecure land tenure and the absence of local 2003, 2004). The studies suggest that collective food-for-work projects. actions may be more beneficial and more effect- In Ethiopia, particularly in the Amhara re- ive when managed at the village level rather gion, one source of tenure insecurity was land than at a county (wereda) level. Collective actions redistribution, which had been ongoing since were more productive when external interven- 1974 to equalize land holdings and quality tions were demand driven rather than imposed. across households. However, its short- and Population density and market access affected long-term effects may have mixed impacts on the probability of successful interventions. Collect- farmer land management and productivity. Ex- ive actions are more successful in intermediate- pectations of future land redistribution may population-density communities with poorer undermine farmers’ incentives to invest in land market access. At higher population densities improvements and soil fertility, as the farmers’ and with better market access, private approaches ability to reap the benefits of such investments is were more effective. undermined. Redistribution might, however, im- Berhanu Gebremedhin and Swinton (2003) prove access to land of households that have examined the relationships among public and relative surpluses of other important factors of private conservation investments. Public con- production, such as labour, oxen or cash to pur- servation campaigns on private land reduced chase inputs, particularly in the context of pro- adoption of stone terraces and soil bunds. hibited land sales and restricted lease markets Whereas capacity factors largely influenced the that exist in Ethiopia. Thus, land redistribution adoption decision, expected returns carried may increase the intensity of land management more influence for the intensity of stone terrace and use of purchased inputs, which may in turn adoption (measured as metres of terrace per increase productivity. hectare). More stone terracing was built where A research project in the Amhara region of fertile but erosion-prone silty soils in higher Ethiopia looked at land degradation and identi- rainfall areas offered valuable yield benefits. The fied options (Pender et  al., 2001). That project intensity of terracing was also greater in remote classified geographical units into various devel- villages where limited off-farm employment op- opment domains defined by combining produc- portunities reduced construction costs. These tion potential or ecology, population pressure results highlighted the importance of appropriate (high versus low) and market access (high ver- public interventions. Direct public involvement sus low). It has been found that there are signifi- in constructing soil conservation structures on cant differences in the extent of degradation and private lands appeared to undermine incentives its causes across the various development do- for private conservation. When done on public mains. Therefore, there are no one-size-fits-all lands, however, public conservation activities solutions to the problems across the domains. can encourage private soil conservation. Secure Technology and institutional options suitable for land tenure rights clearly reinforced private in- different domains to increase productivity and centives to make long-term investments in soil reduce degradation need to be introduced. conservation. A review article by Williams (1998) covered A related issue was how tenure security in- common property issues in semi-arid West fluenced investment in land. A study in Tigray Africa, specifically the problems created by 666 M. Jabbar et al. population growth, land pressure on water and alley farming in the West and Central African grazing, the lack of participation in governance land markets studied, though Adesina et  al. by resource users, and the role of the state in re- (2000) showed that relieving the specific land solving non-market conflicts. tenure constraints faced by women farmers would be necessary to raise their share of bene- Land tenure and fodder trees fits from alley farming or from other fallow substitutes. The International Institute for Tropical Agri- culture (IITA) had for many years studied alley farming, a system in which leguminous trees were planted between rows of food crops, Livestock and poverty such as maize or cassava. Nitrogen fixed by the trees could be returned to the soil as mulch Poverty was not a theme of ILCA/ILRAD/ILRI for uptake by crops, or the leaves could be cut research before the mid-1990s and the words and fed to livestock. Long-term collaboration ‘poor’ or ‘poverty’ as keywords in published among IITA, ILCA/ILRI and national pro- work rarely appear before 2000. There was some grammes in West Africa investigated agro- analysis of wealth disparities in Maasailand in nomic and economic aspects of leguminous the 1980s by King et  al. (1984) and Grandin tree farming. (1988) but no systematic or even sporadic effort Given the long-term character of tree in- to relate ILRI’s work to poverty in Africa, or any- vestments, adequate land tenure was thought to where else, before 2000. be needed to provide incentives to plant and ILRI adopted the theme of livestock as a maintain trees. One study included results from ‘pathway out of poverty’ for its 2002–2010 a sample of 248 farms in southern Nigeria be- strategy (ILRI, 2002). Two landmark studies – tween 1984 and 1991. While that study did not Perry et al. (2002) and Thornton et al. (2002) – collect tenure data, it did show that high turn- examined welfare among livestock keepers and over in plot ownership had no effect on tree paths by which they might escape poverty. Sub- farming (Lawry et al., 1994, p. 3). sequent work identified three paths along which A wider study in humid West and Central research might assist by: (i) securing the assets Africa tested the land tenure argument. This of the poor; (ii) improving the productivity of as- work characterized land and tree tenure prac- sets; and (iii) encouraging market participation tices and their implications for tree management by the poor. in Cameroon, Nigeria and Togo. The review Thornton et  al. (2002) produced the first found that 66%, 50% and 56% of the land, re- set of maps to locate poor livestock keepers by spectively, in Cameroon, Nigeria, and Togo was country, region and production system. They under tenure that provided long-term security estimated that out of nearly 1 billion poor and was, therefore, favourable for adoption of people living in the developing world, about 550 alley farming (Lawry and Stienbarger, 1991, million depended on livestock for their liveli- p. 62). Tenure had a significant role in the adop- hoods, most of them located in sub-Saharan Af- tion, continuation and discontinuation of alley rica and South Asia. Some 366 million and 103 farming. Because a significant proportion of the million livestock-dependent poor people live, land in the three countries was under a favour- respectively, in rain-fed and irrigated mixed sys- able tenure system, it was concluded that land tems, another 30 million in rangelands, and the tenure was not a major constraint to the adop- remaining 50 million or so in highlands and tion of alley farming, if other favourable factors other areas. were present (Lawry and Stienbarger, 1991; Subsequent microeconomic studies assessed Lawry et  al., 1994). In a study of southwest poverty dynamics and its relation to livestock. Cameroon, Adesina et al. (2000) found no statis- Kristjanson et  al. (2004) followed over 1700 tically significant effect of land tenure security households in 20 communities in western on the probability of adopting alley farming. Kenya. The communities differed in population An aggressive policy of tenure reform would density, farm size, agricultural potential, pov- therefore not be generally necessary to promote erty rate and human immunodeficiency virus Economics and Policy Research at ILRI, 1975–2018 667 prevalence. As they emerged from poverty, are wholly or partially dependent on the live- households typically first acquired food, then stock economy. clothes, shelter, primary education and small Little et al. (2008) examined poverty among animals, including chickens, sheep and goats. Kenya pastoralists. They argued that external ob- The results showed movement by households servers tended to ‘homogenize’ the concept of into and out of poverty over the 25-year period. ‘pastoralist’ by failing to acknowledge the diverse Of the households that had escaped poverty, livelihoods, wealth and income in pastoral areas. 73% mentioned diversifying income into cash The study concludes that what is not needed is crops and/or selling food crops when a house- another development label (stereotype) that hold member obtained an off-farm job, 57% equates pastoralism with poverty, thereby em- mentioned cash crop production and 42% men- powering outside interests to transform rather tioned that they diversified their on-farm incomes than strengthen pastoral livelihoods. through livestock, ranging from poultry to dairy. Radeny et al. (2007) showed that education On-farm diversification of income sources away among Tanzanian pastoralists influenced liveli- from a sole reliance on crops through invest- hood choices and improved the viability of pas- ment in chickens, sheep, goats and/or cattle toralism by diversifying it with crop production. helped many of the households in the study to escape poverty. Poor health, health-related ex- penses and funerals were the principal reasons cited by households for having fallen into poverty. Food security and nutrition The slaughter of livestock to meet emergency needs was mentioned by 63% of households as a A fundamental policy question under the head- reason for falling into poverty. ing of ‘livestock and poverty’ is how the benefits Kristjanson et  al. (2007) replicated the of technical change accrue to the rich and the community approach in some 3800 households poor and between women and men. The ques- in two regions of highland Peru, based on 10-year tion is especially relevant when technical change and 25-year recall. The reasons for movements involves a cash good such as milk or meat, com- into or out of poverty were identified at commu- modities not consumed in large quantities by nity and household levels, as was the role of live- most poor households, raising the possibility stock in the different paths. Diversification of that producing cash goods can worsen the nutri- income through livestock and intensification of tion of the poor (Pinstrup-Andersen, 2000). livestock activities through improved breeds Studies in Ethiopia on which ILRI collaborated helped many households escape poverty, but tended to reject that adverse possibility. these results varied across households. A study was started in 1997 in collabor- Ouma et  al. (2003), in a study in Kenya, ation with national institutions near Holetta in used data from a survey of cattle-keeping house- the highlands of Ethiopia. The work involved holds in intensive, semi-intensive and extensive an on-farm trial of cross-bred dairy cows and systems. This work assessed the contribution of animal draught power to assess the nutritional non-market benefits of cattle to the competitive- impacts of market-oriented dairying. A first ness and survival of smallholder enterprises. analysis evaluated the nutritional and health Some 50–70% of the benefits from smallholder status of women and children in households cattle are non-cash and smallholder cattle pro- with and without cross-bred cows (Shapiro duction systems are relatively competitive and et al., 2000; Ahmed et al., 2000). Malnutrition, efficient in the utilization of household produc- as measured in pre-school children by stunting, tion factors when non-market benefits are taken wasting and underweight, and as measured by into consideration. This is especially so for exten- body mass index in adult women, was lower in sive systems, which are non-market-oriented. households with cross-bred cows than in those The study concluded by emphasizing the import- with local cows. Calorie, protein and nutrient ance of the non-market roles of cattle in evalu- intake were significantly higher in the cross- ations of smallholder cattle production systems, bred cow group. as this will have a bearing on any policy-related The analysis further assessed the effects of interventions whose target are households that milk and income on decision making (Haider 668 M. Jabbar et al. et al., 2000). Women in households with cross- health and nutrition. Anthropometrical indica- bred cows contributed over 80% of household tors – stunting (height for age), underweight expenditure on food. A second extension of the (weight for age) and wasting (weight for height) – study revealed that steady increases in income are generally used as means of assessing from dairy in Ethiopia translated directly into in- prevalence of malnutrition among pre-school creases in expenditure on purchased food, non- children or children under 5  years. A study in food and farm inputs (Ahmed et al., 2000, 2003). highland Ethiopia tested the hypothesis that ac- Tangka et al. (2002) analysed the food se- cess to animal-source foods affected nutrition in curity and supply effects of smallholder dairying pre-school children (Okike et al., 2005). A child’s in peri-urban Ethiopia. Econometric analysis of nutritional and health status are jointly deter- panel data was used to evaluate the effects of mined by dietary intake, maternal wellbeing and dairying on food consumption, calorie intake the state of the physical environment as it influ- and marketed surplus in a treatment group of enced agricultural production and health status. households in contrast to a control group with- Presence of dairy cows in the household signifi- out the dairy technology. There were substantive cantly contributed to the health of children. The and statistically significant improvements in findings implied the need for multi- or transdisci- food security and marketed surplus with improved plinary approaches to research and develop- cattle. These impacts were reflected mainly ment incorporating heath, nutrition, sanitation, through the effects of income and wealth, meas- and farming practices for improving the health ured by animal value and land area. Household and nutrition of rural households. income had a positive and significant effect on A study in Selale District, in the Ethiopian food consumption. Regression estimates show highlands, examined the relationship between that elasticity of expenditure on food with re- smallholder dairying, time allocation by gender spect to income, animal value and cropland and income receipts by gender (Lenjiso et  al., area at the mean levels was respectively 0.29, 2016). In market participant households, in- 0.18 and 0.26. The largest share (63%) of the come from milk was higher because of higher difference in calorie intake between the cross- output and marketed surplus, but control of bred and local-breed cattle households was at- income shifted from women to men compared tributed to differences in the explanatory vari- with non-participant households. Policy lessons ables, while the estimated parameter differences from this work were inconclusive. between the two groups accounted for 37% of the difference. The value of animal assets had a positive and statistically significant impact on calorie intake in both the combined and IBLI in the arid rangelands cross-bred cattle regressions. The increase in of Kenya and Ethiopia animal values for the cross-bred cattle house- holds was estimated to increase their caloric in- An IBLI project developed a market tool for risk take by 12.7% relative to the local-breed cattle management by pastoralists in arid and semi- households. The value of food marketed by the arid Kenya. Following the inception of house- cross-bred cattle group was 82% higher than hold surveys in Marsabit, Kenya, in 2009 and that in the local-breed cattle group. A total of the launch of the IBLI’s insurance product in 76% of the increase in the value of marketed January 2010 (Jensen et al., 2015), the IBLI model surplus food for the cross-bred cattle over the lo- has combined biological, economic and institu- cal-breed cattle groups was accounted for by the tional research involving scientists, herders, difference in household characteristics, while private firms and regulators to: (i) protect pas- only 24% of the increase could be attributed to toralists from livestock losses by assessing forage differences in the estimated parameters. House- availability during the rainy season(s), as an holds in market-oriented dairying increased their index of production risk among a sample of 924 income and animal values significantly com- herding households in Marsabit county of arid pared with households in traditional dairying. northern Kenya; (ii) measure household demog- Nutritional status of children under 5 years raphy, income and wealth in that sample over of age is often a good indicator of community a survey period of 5  years; (iii) define and sell Economics and Policy Research at ILRI, 1975–2018 669 insurance policies against covariate risks caused policy impact of IBLI was that the insurance by drought; (iv) measure an index of vegetation product had a favourable benefit:cost ratio com- to define a trigger for insurance payments, using pared with other social protection programmes remote sensing data; (v) analyse the consump- in Kenya (Janzen and Carter, 2019). tion and investment behaviour of pastoralists of IBLI expanded into southern Ethiopia in varying herd sizes to estimate the impact of in- 2012 and has since generated pay-outs to herd- surance on sales, income, consumption and ers of approximately US$370,000 (Matsuda herd viability; (vi) identify effective institutional et al., 2019). A major finding from the studies of and extension models for the uptake of the prod- IBLI in Ethiopia is that index insurance is a com- uct; and (vii) work with herders and private bro- plement, not a substitute, to traditional risk- kers to monitor demand for index insurance, to sharing mechanisms (Takahashi et  al., 2019). continue adaptive testing of the insurance instru- Since 2019, an IBLI product has been integrated ments and to analyse the development impacts into the Africa Risk Capacity (ARC) to offer index of IBLI (a recent summary of IBLI is given by insurance to national partners targeting pas- Fava and Jensen, 2020). toral regions. To date, more than 86,000 policies have been sold with the ARC micro-insurance Impact scheme and more than 25,000 pastoralists are protected through the macro-level programmes. There was widespread adoption of index insur- ance in Marsabit, although many herders did Policy lessons not renew their policies after seasons of low pay- outs (Jensen et  al., 2015, p. 3). Insurance had Successful policy is impossible without a base of three broad impacts in Kenya, First, insurance, data collection and analysis whether payments were triggered or not, had a Index insurance for livestock leaves sub- positive impact in maintaining consumption stantial idiosyncratic risks (Jensen et al., 2016), and in preserving livestock wealth (Janzen and with roughly 60–75% of risk uncovered. These Carter, 2019), through IBLI’s generation of idiosyncratic risks have to be managed by trad- roughly US$10 million in pay-outs to Kenya itional risk-sharing mechanisms or by associ- herders. During the drought of 2011, house- ated public policies such as social funds. holds in Marsabit county with IBLI coverage had The arid and semi-arid counties of Kenya higher incomes and milk production; (Jensen are poor enough and risky enough that commer- et  al., 2015), were 27–36% less likely to skip cial livestock insurance will need public finan- meals and were 22–36% less likely to make dis- cial support for some time. tress sales of livestock (Janzen and Carter, Market agents – insurance brokers, 2019). Jensen et al. (2017) found, over 3 years regulators, and extension and research of IBLI coverage, that average veterinary ex- collaborators – had insufficient capacity at the penditures doubled and livestock sales in non- onset of IBLI. The commercial and regulatory drought years increased by an average of 46% of capacities of Kenya have grown since the incep- the mean. tion of IBLI, but international research support Impact on the wider policy environment in will be needed for some time to maintain a flow Kenya is a second category in which the pro- of information and analysis on programme gramme had a strong effect measure through operations and outcomes. the expansion of IBLI by the government of Kenya as the Kenya Livestock Insurance Project (KLIP). KLIP now provides subsidized insurance Livestock sector analyses and master to 18,000 pastoral households, representing plans as part of development policies over 80,000 beneficiaries, across eight counties of northern Kenya, and plans to serve 100,000 ILRI has pioneered the use of system dynamics households across 16 counties by 2021. The models in agri-food and livestock value chains. 2016/17 drought was among the worst in One application was in Rich et  al. (2009) who Kenya in the past 20 years, and KLIP paid out assessed the viability of a two-stage export certi- $7 million to pastoralists. One indicator of the fication system in Ethiopia using quarantine 670 M. Jabbar et al. stations and feedlots to ensure disease-free and (http://projects.worldbank.org/P159382? higher-quality beef for export to Middle Eastern lang=en; accessed 8 March 2020), new donor markets.The model found that the costs of com- project financing of US$75 million and new pri- plying with SPS regulations did not constrain vate-sector investments of US$200 million. The competitiveness but that high feed costs would higher livestock productivity and income levels do so. Later models at ILRI evaluated sheep and resulting from the plan’s investment interven- goat marketing in Mozambique (Hamza et  al., tions are projected to lift more than 2.3 million 2014), reforms to improve competitiveness in of Ethiopia’s 11 million livestock-keeping house- the beef sector in Botswana (Dizyee et al., 2017) holds out of poverty. and assessments of animal disease and food safety (Grace et al., 2017; Rich et al., 2018). Lie et  al. (2017, 2018) used spatial tech- niques in a model of the dairy value chain in The Future Nicaragua to quantify the market effects of feed quality. The goal of ILCA/ILRAD/ILRI policy research A growing area of ILRI policy support has was to increase smallholder returns by: (i) improv- been the development of ‘livestock master ing the productivity of technologies through plans’. Such plans set priorities within livestock technical, economic and financial analysis; development strategies to generate public and (ii) identifying policy barriers that lower farm private investments. The government of Ethiopia prices, raise input costs or increase the financial, has developed a Growth and Transformation information and risk costs of new methods; and Plan II 2015–2020, which prioritizes agricul- (iii) building institutions to raise productivity, ture and livestock investments to reduce poverty, create assets and reduce the external costs of to raise national income, to increase exports and animal agriculture. to improve food and nutritional security. The We are unable to estimate most of the de- Growth and Transformation Plan includes a live- velopment benefits of policy research at ILRI stock master plan, based on an analytical tool and partners, for several reasons. One is that known as the Livestock Sector Investment Policy many policy studies made little or no effort to Toolkit (www.au-ibar.org/2012-10-01-13-08- calculate impact research on the policy process 42/news/171-au-ibar/451-the-alive-livestock- or on outcomes of policy changes. This pattern sector-investment-policy-toolkit-lispt; accessed began with early ILCA work, such as Addis An- 9 March 2020). teneh (1983, 1984, 1985, 1991) and the dairy The Ethiopia livestock master plan (Shapiro policy studies of Brokken and Senait Seyoum et  al., 2015) was based on a 15-year sectoral (1992), continuing with McCarthy et al. (1999) model of potential outcomes of livestock invest- and the contemporary livestock and poverty ments in terms of increased production and (Thornton et  al., 2002), animal health (Perry value added for technology and service invest- et al., 2002), and climate change investigations ments under associated policy scenarios. The (Thornton and Herrero, 2010). One recent in- modelling incorporated the red meat and dairy novation is the preparation of ‘livestock master value chains subject to constraints in animal plans’ (e.g. Shapiro et  al., 2015, for Ethiopia, health, feeds and genetics. The livestock master which developed benefit–cost results for specific plan, as derived from the sector model, com- policy measures). The book of Herrero et  al. prises a 5-year investment roadmap and assess- (2014) on African livestock futures proposed ments of potential medium-term impacts of specific policy measures, but there has been no combined technology and policy interventions, effort to cost those recommendations and to see and informed the Ethiopian government’s if they have been implemented. Growth and Transformation Plan II livestock A second reason is broader – the inter- targets for 2015–2020. national system has neglected the assessment of Since 2016, the plan has served as the basis policy research with the exception of IPFRI’s for new funding and projects for the country’s work. The reasons for this failure include the time livestock sector. This includes livestock invest- lag between research output and policy changes, ments of US$132 million by the World Bank the difficulty of attributing policy changes to Economics and Policy Research at ILRI, 1975–2018 671 research products, and the futile and counter- the work at ILRI and other centres. The ICRISAT productive demands by donors for simple an- village-level studies had the greatest scientific swers to complex questions in unrealistically impact of economics and policy work across the short periods, which leads to hasty and incon- international agricultural research institutions clusive studies. Exceptions to these generaliza- because the work was sustained for many years tions were ILRI’s research on the Kenyan dairy and was specifically linked to technology gener- policy, which had significant economic and cap- ation. Future field investigations of livestock acity development benefits (Kaitibie et  al., systems should renew the ICRISAT village-level 2010a; Leksmono et al., 2006), development of studies model over a sufficiently long period in the East Coast fever vaccine (see Chapter 6, this African and in other developing country situ- volume) and the public–private partnerships in ations. Latin America that led to the planting of large areas of the forage grass Brachiaria spp. There is an important contrast between the Acknowledgements extended data collection and analysis done as part of the ICRISAT village-level studies (Walker The authors thank Iain Wright and Isabelle and Ryan, 1990) in semi-arid central India and Baltenweck for comments. 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