Livestock Master Plan: Roadmaps for Growth and Transformation (2015-2020)

Gebregziabher Gebreyohannes (HE, Dr.) Minister for Livestock Resources Development

MOA/ILRI Livestock Master Plan Project Steering Committee Meeting, Addis Ababa, 5 December 2014

Rationale for the LMP

• Livestock sector development has been a priority in all Government of Ethiopia (GOE) plans for the last two decades

• Livestock is a priority in the current Growth and Transformation Plan I (GTP I), running thru 2015

• GOE understands the need for greater funding of the development of the sector to realize its full potential

• There has been no clear strategy and action plan for the development of the livestock sector -- what could be achieved over the medium-term (5 years) and long-term (15 to 20 years)

• Ethiopia made several attempts to develop a Livestock Master Plan (LMP). This current effort began in 2013 with the use of LSIPT – Livestock Sector Investment and Policy Toolkit

• This effort was successful due to strong support from the Livestock State Ministry

The process of creating the LSA & LMP

• Accomplishing the livestock sector analysis (LSA) required that an appropriate analytical tool be identified to develop the LMP, and then learning how to use these tools.

• The LMP team, made up of MOA and ILRI staff, identified the Livestock Sector Investment and Policy Toolkit (LSIPT) as an appropriate set of tools to carry out the sector analysis for the LMP

• LSIPT came at the right time for Ethiopia – when a Livestock State Ministry (LSM) was created and a Livestock State Minister appointed

• The LSM needed to set targets and develop a livestock plan for the Growth & Transformation Plan II (GTP II)

• A Technical Advisory Committee (TAC) was set up by the Livestock State Minister and the TAC met regularly to give advice on the project activities and outputs and oversee progress

The process of creating the LMP (cont’d)

• Development of the Ethiopia LMP has been a consultative process of getting expert advice and stakeholder buy-in and ownership – ensure agreement on approach, data, parameters, and results

• 3 major production typology zones and 40 production systems (to ensure poverty reduction) were agreed upon with the Ministry of Agriculture

• Over 30 specialists were consulted on data and parameters for livestock commodities, value chains and cross-cutting issues

• Based on expert experience and available literature, the key livestock performance parameters were collected

• A comprehensive national data base and baseline (depicting the current situation) were thus established for livestock planning

• The analyses covered 6 value chains , and 4 cross-cutting issues

Livestock Sector Analysis (LSA) Production Zones

Production and productivity parameters of cattle by production zone

Lowland Grazing (LG) Mixed Rainfall Deficient Sufficient

(MRD)

Mixed Rainfall Sufficient (MRS)Lowland Grazing (LG)

Dairy Specialized

AP PS PM S M S M S M

Herd size9 7 18 2 6 3 9 5 10056 56 58 57 58 60 65 85 90

Parturition rate (%) 14 12 10 11 12 12 8 8 5

Mortality rate female calves (%)

6 7 6 7 7 7 6 1 1

Mortality rate female sub adults (%)

4 5 5 5 5 4 4 3 3

Mortality rate Female adult (%)

15 16 16 12 16 15 10 6 6

Mortality rate male calves (%)

9 12 12 8 8 8 6 1 1

Mortality rate male sub adults (%)

7 9 9 5 6 4 4 3 3

Mortality rate male adults (%)

11.5 10.9 11.9 11.9 11.4 11.5 10.2 32.6 35.5

Herd size0.3 0.2 1.5 0.0 1.0 1.9 5.0 8.4 6.0

LSIPT application process ….

MOA livestock production zones and sub-zones in Ethiopia

Livestock Production System

Lowland Grazing (LG-L) Highland Mixed (MR-H)

LGAP LGP HMR-MD Medium

Small

C C

C-F

Specialized (SP)

C: CattleCam: CamelS: SheepS-F: Sheep fatteningBe: BeesG:GoatsEQ: Equines

D: DairyC-F: Cattle fatteningP: Backyard PoultryL: LayersBr: Broilers

S

Small

L

Br

Be

MediumSmallMedium

DC

G

HMR-MS

Small

SCC

S

Cam

Cam

C

Small

S

Cam

G GG

S

G

S

C-F

D

S-F

PP

Be

P P

Be Be

P

BeBe

P

Be

LSIPT application process ….

How LSIPT analysis was used to do the Ethiopia Sector AnalysisLivestock Sector Model

• The data and parameters were presented to the directors of the 3 MOA Livestock Sector Ministry (LSM) departments (Animal Health; Production and Feed; and Pastoralism) for verification

• Also carried out regular communication with the livestock experts to review the production parameters

• The LMP team (MOA and ILRI specialists) entered the “best bet” data in the LSIPT Excel modules, and counter-checked data reliability on the basis of past performance and analytical results obtained

• Results were periodically presented to the TAC and the LSM for comments. Assistance and guidance from the LSM and TAC was regular and continuous. Periodic re-analysis and revision of results was done based on LSM and TAC feedback

What does LSA mean for the development of the sector?

• LSA is a living document that guides:– Livestock sector development for the

coming 15 years and beyond– Basis for setting targets for GTP II and

future 5-year plans– Foundation for the LMP

Framework of the LMP roadmaps -- based on LSA results

• Baseline for 2015• 5-year GTP II development targets (2015-2020)• Challenges and strategies• Ex-ante testing of LMP interventions to achieve targets• Investment requirements (policies and intervantions)• LMP impacts – Return on Investment (ROI), GDP,

production-consumption balance• Activities timeline and sequencing• Complimentary interventions and success

requirements

LMP major Outcomes

• Built the livestock sector data base, baseline situation and projections

• Results from the LSA include production, technological performance of the sector, its contribution to the household and national economy, current status (2013), future potential (2028) to reduce poverty, and economic growth

• Analysis of value chain development and its contribution to GDP

• Technology and investment analysis (IRR, NPV) for different scenarios

• Analysis of cross-cutting issues (Feed, Health, Genetics, Policy)

• Analysis of institutional and policy constraints and solutions

• GTP II (2016-2020) projections and targets

• Created the foundation for institutionalization of the planning capacity of the Livestock State Ministry (LSM)

Key LMP Interventions – Red Meat/Milk

• Health – Rationalize public and private veterinary services, with privatization wherever if is feasible

• Health -- Increase productivity of local breed animals in all production typology zones through health interventions to reduce young and adult stock mortality (YASM), treat other critical diseases like FMD (through vaccinations), and parasite control (endo and ecto-parasites)

• Feed – Improve grazing lands (both pasture (LG) and range(MRS & MRD)) for more and better feed production

• Feed – Policy changes to make land available for investors for forage seed and forage production, and promote production of supplemental concentrates by flour and oil mills

• Support exports through promotion activities, animal identification and traceability, export quarantine stations, disease surveillance, export abattoir monitoring, etc.

The Six Key LMP Commodity Value Chains and cross-cutting activities

Cow dairy 1.Improved Family Dairy systems (IFD) in MRS and MRD dairy belts (peri-urban)2.Specialized Dairy Production (SP Dairy) Red meat (and milk) from cattle, sheep, goats and camels3. Improved Traditional Red Meat-Milk (ITMM) systems in all

production zones (MRS, MRD and LG)4. Specialized Beef Cattle Feedlots (SPF)Poultry •Improved Family Poultry (IFP) in all production zones (MRS, MRD and LG Agro-pastoral)•Specialized Poultry (SPP) – Broilers and Layers Cross-cutting activities within each value chain3.Animal Health 4.Animal Feed 5.Animal Genetics 6.Policy

Interventions

• Crossbreeding (AI with synchronization

• Contracting out forage production

• Rationalization of public privet vet service

• Reduce YASM (vaccine and parasite control)

• Improve pasture and range land productivity

• Support expansion of commercial dairy

• Promote concentrate production (flour and oil mills)

• Promote dairy processing

Total investment (in MRS)• 146 m ETB =

Improving the capacity of AI centers and services, training of AI technicians

• 214 = Reduce YASM• 252 m ETB = Pasture

land improvement• 215 m ETB for forage

production and trade promotion

• 250 m ETB for wheat flour mill establishment

• 760 m ETB for establishment of milk processing plant

Outcomes (production, GDP contribution)

• 93% increase in milk production (4 B to 7.9 B liters)

• Cow milk GDP contribution increased from 28 B to 52.9 B ETB.

• 2.5 B liter surplus

Investment returns

• IRR in MRS = 24-33% in

• IRR for investment in commercial dairy = 29-43%

• IRR in MRD = 1% (<10%)

Priorities• Breed

improvement in MRS was recommended but not in MRD, except in peri-urban areas and dairy belts

Cow dairy

Impacts of Investments in Improved Family Dairy (IFD) in MRS and Specialized Dairy (SPD):

Internal Rates of Return (IRR) over 20-Years , 2013-2028

33

24

0

10

20

30

20-Y

ear

IRR

(%

)

Small Medium

Panel A: Improved Family Dairy

29

43

0

10

20

30

40

Small Medium

Panel B: Specialized Dairy

In MRD, AI & Synch worked in per-urban areas and milk sheds

In MRS AI & Synch

works everywhere

•IRR =33%

•Milk production

increases 8 times

•GDP contribution

increases 10 times

Impacts at national and regional levels of AI & Synchronization

In LG, AI & SynchNot tested for breed improvement

Overall AI &

Synch Results:

•93% increase in national milk

production (4 B to 7.9 B liters)

•Cow milk contribution to GDP

increases from 28 B to 52.9 B ETB.

•2.5 B liter surplus

Similar results for red meat and poultry y:

• Red meat (and milk) from cattle, sheep, goat and camel– Improved Traditional Red Meat-Milk (ITMM) very

profitable in all production zones (MRS, MRD and LG)– Specialized Beef Cattle Feedlots (SPF) very profitable

• Poultry– Improved Family Poultry (IFP) very profitable in ALL

production zones (MRS, MRD, LG Agro-pastoral)– Specialized Poultry (SPP) very profitable – Broilers and

Layers

Impacts of Investments in Improved Traditional Red Meat/Milk Production (ITMM): Internal Rate of Return (IRR)

over 20-Years, 2013-2028

17

38

23

0

10

20

30

40

20

-Yea

r IR

R (

%)

MRS MRD LGNote: 10% discount rate was used. Based on LSA results.

Impacts of Investments in Specialized Cattle Feedlot (SPF): Benefit Cost Ratio (BCR), 2013-2028

9.0

1.3

0

2

4

6

8

10

20

-Ye

ar

Be

nef

it C

ost

Ra

tio

Small Medium

Impacts of Investments in Improved Family Poultry (IFP), Specialized Poultry (SPP-Broilers and Layers): 20-Year Benefit

Cost Ratio (BCR), 2013-2028

10.5

1.54 1.68

0

2

4

6

8

10

20-Y

ear

BC

R

IFP SPP-Broiler SPP-Layer

LSIPT results changed MoA opinion on domestic and export potential of livestock & products

Panel A: Red meat

C

PWO

PW

500

1000

1500

2000

2500

3000

2013 2018 2023 2028

Panel B: Chicken meat

PW

C

PWO0

200

400

600

2013 2018 2023 2028

Panel C: All meat

PWO

PW

C

1000

1500

2000

2500

3000

2013 2018 2023 2028

Panel D: All milk

PWO

CPW

4000

6000

8000

10000

12000

14000

2013 2018 2023 2028

Panel E: Eggs

PW

C

PWO0

5000

10000

15000

2013 2018 2023 2028

Source: Based on LSIPT results.

Consumption

Production with intervention

Production without interventiion

Legend:

PW=

C=

PWO=

Production-Consumption

Balance

GDP contribution from LMP interventions for milk, red meat, and chicken meat and eggs

(2020)

74,064

82,489

10,054 5,577

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Red meat (ETBmillion)

All milk (ETBmillion)

Egg (ETB million) Chicken meat (ETBmillion)

Public and Private investment shares by major value chains

(ETB Millions)

What do LSA/LMP results mean for the GTP II

Government livestock development policy goals need to avoid significant trade-offs:•If invest in all LMP interventions GOE can eliminate poverty in 25% of livestock keeping households (>11 million people)•Focus on poultry development to achieve better food security, enable red meat exports, and lower GHG emissions•Combination of cattle and poultry can lower domestic meat prices, while increasing exports and foreign exchange earnings•Focus on dairy development to achieve food security in domestic markets and also increase export earnings

What LSA/LMP results mean for the PRIVATE SECTOR role in GTP II

In conclusion, success in these interventions during GTP II will require full participation of the private sector:•Value adding processing by Private Sector crucial for success•Need to attract and enable very substantial private investment in livestock product production and processing. •Need dramatic improvement of the investment environment (far less bureaucracy in setting up all types and aspects of businesses).•Need far more attractive incentives private investment -- subsidized land leasing rates, low interest loans, tax holidays

MoA Reaction

• The Agriculture Minister said “GOE will adopt and implement the LMP

• Livestock State Ministry owns the LSA, GTP II and LMP developed using LSIPT

• Results taken as realistic, fact-based to inform investment decisions (based on GOE criteria: poverty reduction, food and nutrition security, or economic growth, or combination of all)

• Committed to expand the use of the tool in academy and research

Other benefits of LSIPT and LMP

• Baseline data established– Livestock national herd numbers and infrastructure– Livestock production parameters, and VC analysis– Livestock contribution of GDP and poverty

reduction– Present policies, strategies and legislations– Consensus on production and VC parameters

reached among experts

• Traceable results and methodology

LMP Research Priorities

Priority research areas to implement the LMP include:• Selection to improve indigenous red meat animals and on-farm

record keeping• Better cross-breeding of dairy cattle and small ruminants• Improved family poultry and camel improvement, and how to

manage/improve rangelands in pastoral areas• Developing new poultry lines using indigenous and exotic breeds• Reduction in animal traction and mechanization• Ensuring that research has impact - learning how to scale up

technologies• Impact assessment to support better policy decisions• Improving seed and feed options for livestock producers• How to improve livestock and livelihoods data, esp. in pastoral areas

The Core LMP Team – MOA, EIAR & ILRI