Livestock is one of the fastest growing agricultural sub-sectors in developing countries and this growth is driven by rapidly increasing demand for livestock products, mainly due to population growth, urbanization and increasing incomes. The increase in livestock products in turn requires an increase in different inputs for livestock production, mainly feed. Feed is the major input cost incurred in livestock production and is one of the focus areas in LIVES intervention districts.
Although agro-industrial byproducts in Meki town (Dugda district) is mainly run by men, Hiwot Feleke, a female high school graduate, was able to join the business 6 years ago after obtaining a retailer license. She has successfully run the business so far and her shop is located at a prime location and can store up to 40 quintals of feed.
Hiwot buys wheat bran and linseed cake from a wholesaler who brings supplies from wheat mill factories found in the southern region (Warable, Dilla and Awassa) and linseed cake from Adama oil mills. She buys 20 to 25 quintals of wheat bran per week costing 240 to 310 ETB/quintal and 1 or 2 quintals of linseed cake costing 600 to 800 ETB/quintal. The wholesaler transports the feeds to her shop by truck and she pays either with cash or on credit. The profit margin from each quintal is 10 to 20 ETB. Her sales are higher in the dry season (also at a higher price) than in the wet season when there is feed and forage available in the fields.
Her customers include donkey and horse cart owners, farmers who own oxen for traction in the dry seasons (January to July), as well as dairy farmers and cattle fatteners in Meki town. She explains that urban dwellers buy more linseed cake to fatten cattle than rural farmers do. In addition to selling feed, Hiwot keeps some cattle and spends part of her profit to feed them.
Engdashet Hailu, is a feed retailer (and sometimes a wholesaler who distributes to small scale retailers) in Alemtena town, Bora district. He has a diploma in plant sciences and started his business recently. In addition to the feed sold by Hiwot, he sells cotton seed cake. Upon request, he buys his oilseed cakes (linseed and cotton seed) directly from Adama oil mills and his wheat bran from factories. He has rented a house to use as a store and shop. The house can store as many as 100 quintals.
Hiwot and Engedashet share many experiences and challenges. The mode of payment that they use with their suppliers and their profit margin is similar; the needs of their rural and urban customers is similar; the seasonal variation in price affects them both – their sales increase in the dry season due to feed demands of sand extractors and vegetable producers who use donkey carts as a means of transportation. They face similar challenges as well: Factories sometimes sell them poor quality wheat bran, they pay high taxes, they compete with retailers who do not pay taxes. Regardless, both retailers are determined to expand their businesses in the future.
Berhanu Chenka is one of the four businessmen involved in wheat straw marketing in Meki. Wheat straw is the only crop residue that is sold throughout the year at Meki market. Farmers sell sacks of straw to merchants at the farm gate and the merchants transport the straw (each sack weighing 5 to 7 kg) using rented donkey carts to the marke where they sell to traders like Berhanu.
Berhanu’s customers include horse and donkey owners, people wanting to conserve the straw for use during feed scarcity and those who keep small number of animals. His profit margin is 2 ETB/sack. Berhanu buys 300 sacks of wheat straw per month by paying cash and sells them all within the same month. The longer the sacks stay on his hand, the lower his profit margin. The price of straw rises from August to October as the roads are muddy and difficult to traverse with a donkey, leading to limited supply. Berhanu explained that the profit he gets is not high, but enough for daily survival. Getting a suitable market place for the business is a critical constraint to Berhanu. He sells his straw adjacent to cloth traders where the pieces of the straw are taken by wind and may soil the clothes.
In Alemtena, Bora district, farmers bring sacks of straw to the town between May and August when livestock feed is scarce. They go to a specific place early in the morning between 6 and 8 am. Farmers sell directly to consumers unlike in Meki.
Supported by his knowledge of plant sciences and some practical experiences, Engedshet advices his customers how to use the feed they buy, but neither Hiwot nor Berhanu do this. None of them have much knowledge on livestock feed management, storage, quality control, safe sale and business planning. They do not know how to perform feed quality checks, good packing, proper labeling and feed mixing.
They all three have mobile phones to obtain price information and foster market linkages. Information resources on new business technologies/opportunities are rare and informal. Engedashet and Hiwot explain that there are many youth, like them, who are getting into their business nowadays.
The LIVES project and its partners need to undertake further assessment to understand the system of livestock feed marketing from wider perspective and pave the way for alternative solutions to problems affecting the business.
As many unemployed youth without adequate knowledge in business planning and livestock feed management are joining the business, there is a strong need to train them in business planning, management of livestock feed, and sustaining ethical business. It is also necessary to train and demonstrate techniques of formulating mixed ration for different classes of livestock so that they can diversify their business and help customers to feed their animals better.
Given necessary support, the business men/women can assist in transferring feeding technologies as they have close contacts with farmers. It is also quite common in the agricultural extension system to focus on production than on value chain governance although the latter is crucial for market oriented livestock production.
Thus, LIVES and its partners need to work closely with farmers and other actors in the business on value chain concepts and the involvement of interested farmers in the business at peasant association levels. Assessing the feasibility of introducing bulk purchasing of feed for farmers and small scale feed mixing operation need due consideration. Some of the constraints raised in both towns can be solved through creating awareness and discussions among the relevant actors where LIVES and partners can play a vital role.
Contributed by Abule Ebro, Nigatu Alemayehu, Adisu Abera and Gemeda Dhuguma