i

SHEIKH TECHNICAL VETERINARY SCHOOL (STVS)

PRICE OF DIFFERENT ANIMALS IN DIFFERENT SEASONS IN

SOMALILAND, CASE STUDY IN HARGEISA. This mini thesis research was submitted to STVS as a partial fulfillment of requirements for the award of the Diploma in livestock product and entrepreneurship (DLD) By: Mohamed Hashi Abdilahi Reg.Number:109 July 2012 Supervisor: Dr Ibrahim Osman saleban

 

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DECLARATION

I Mohamed Hashi Abdilahi hereby declare that this work is my original work, and has not appeared anywhere else in any other form except for the references made from other published works. I also declare that it has not been previously or concurrently submitted for any other thesis in stvs.

Student Signature.........................................................................................

Date...............................................................................................................

Supervisor Signature………………………………………………………….

Date.................................................................................................................

 

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ACKNOWLEDGEMENTS

First and foremost I would like to thank ALLAH who made it possible for me to make use of this

golden opportunity. I wish to thank my supervisor DR. Ibrahim Osman Suleiman who willingly

dedicated his time and energy for me to achieve my objective on this thesis.

Secondly I deeply grateful thanking Ibrahim Omar (one of the staffs of TERA NOUVA in

Hargeisa office) for his support the information i required in this thesis.

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Table of Contents

DECLARATION.............................................................................................................................iv ACKNOWLEDGEMENTS............................................................................................................ iv Table of contents............................................................................................................................ iv List of table and figures .............................................................................................. ………… iv Chapter one ………………………………………………………………………………….....1 1.1,1 Introduction ........................................................................................................................... 1

1.1.2 Literature review .................................................................................................................... 4

11.2 Overview of livestock production in Somaliland ........................................................... 4

1.2.3 Trade and marketing ...................................................................................................... 5

1.2.4 Price Patterns and different seasons in Somaliland ....................................................... 7

1.1.5 Livestock production constraints……………………………………………………..9 1.1.6 Objectives ............................................................................................................................ 10

1.1.7General Objectives………………………………………………………………………….10

1.1.7Specific Objectives…………………………………………………………………………10

CHAPTER TWO: METHODS AND MATERIALS ................................................................... 11

2.1.1 Study Area ........................................................................................................................... 11

2.1,2 Data Collection processes .................................................................................................... 12

2.1.3 Questionnaire ....................................................................................................................... 12

CHAPTER THREE: RESULTS ................................................................................................... 13

3.1.1 Livestock prices ................................................................................................................... 13

3.1.2 Catchment area ..................................................................................................................... 14

3.1.3 Livestock marketing system in hargeisa .............................................................................. 14

3.1.4 Livestock grade .................................................................................................................... 16

CHAPTER FOUR: DISCUSSION ............................................................................................... 24

CHAPTER FIVE: CONCLUSTION AND RECOMMENDATION ........................................... 26

5.1.1 Conclusion ........................................................................................................................... 26

5.1.2 Recommendation ................................................................................................................. 27

REFERENCES ............................................................................................................................. 28

Annex One: Research Question .................................................................................................... 29

Annex Two: NO. of animals marketed Somaliland(export or domestic quality) in 2011……...30

Annex three; pictures of hargeisa livestock market…………………………………….…....32

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LIST OF TABLES AND FIGURES

Table one…………………………………………………………………………………………18

Table two………………………………………………………………………………………...19

Table three……………………………………………………………………………………….20

Table four………………………………………………………………………………………21

Figure one………………………………………………………………………………………..12

Figure Two ……………………………………………………………………...……………….14

Chart One…………………………………………………………………….……………..….16

Chart two……………………………………………………………………………….……....22

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CHAPTER ONE 1.1.0 Introduction

The economy of Somaliland depends mainly on livestock production. The majority of people

directly or indirectly obtain their livelihoods from animal husbandry, and the resilience of this

mode of production has been critical to Somaliland's recovery from the war (Bradbury 1997;

UNDP & UNHCR, 1999). Taxation on livestock exports is the main source of government

revenue and of funding for the re-establishment of government institutions. As pastoral

production is closely linked to the social structure of pastoral groups, pastoralism as a `way of

life' has a profound impact on the politics and culture of Somaliland (ministry of agriculture of

Somaliland 2001).

Livestock husbandry is the dominant system of production in Somaliland. Because of Over half

the population in Somaliland is involved in some form of animal husbandry, either as nomadic

(or transhumant) pastoralists or as agro-pastoralists (FSAU, LITTLE 2001 and Mohamuod

2011). Always the backbone of the economy before the civil conflict, livestock production

continues to be main source of daily subsistence for nomadic families and the main source of

income and employment for urban dwellers (EC-FAO, 1995 & John Drysdale 1997). According

to the Somaliland Ministry of Agriculture, about 60% of Somaliland's population relies for daily

subsistence on the main livestock products, meat and milk (Ministry of Agriculture 1998).

Livestock production is estimated to represent 60-65% of the national economy (Ministry of

Agriculture, 1998), and government revenue is heavily dependent on livestock exports. Between

1991 and 1997, livestock export on the hoof grew considerably, exceeding pre-war levels when

Somaliland exported some three million heads of livestock in 1997, mostly to Saudi Arabia

(Gees, Mohamed Said Mohamed and Hammond, Laura. Beyond Quick Fixes). The value of

livestock exports in 1997 was estimated to be US$ 120.8 million, yielding as much as 80% of the

total hard currency income for Somaliland's population (UNDP 1998).

There are different species of domestic livestock in Somaliland, sheep, goats, camels and cattle -

are reared in the country. Sheep and goats are herded in the largest numbers, although trends in

population growth, increased sedentarisation and markets demands have resulted in greater

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numbers of cattle being reared in recent years (Little, P. 2009)). Many observers believe,

however, that numbers of livestock have been decreasing during the 1990s, as result of pastoral

rangeland degradation and insufficient of grassing space in some areas (Baldwin, R. and

Schleyer, M. Biodiversity of the Northern Somali Coast East of Berbera, IUCN, Nairobi, and

March 1999.). Participants in this research (brokers, traders and producers) asserted that the

livestock population is not increasing, because most of the livestock for export comes from

beyond Somaliland's borders. There are also indications that pastoralists are selling more animals

at lower prices into local markets as well as for household consumption (samater, Salisbury,

1988).

Livestock productions are of significant importance to the economies of Somaliland to local

livelihood systems. In Somaliland, livestock production in the Arid and Semi-

Arid Lands (ASALs) accounts for nearly 90% of the livelihood base and nearly 95% of family

income, with an estimated livestock resource base of 60 million animals, including cattle, sheep

and goat (shoats) and camels (AU-IBAR and NEPDP, 2006), the livestock sector in Somaliland

contributes 70% of total GDP (Somaliland Centre for Peace and Development (1999).

The economy is largely dependent on livestock export to major markets in Gulf countries such as

Saudi Arabia, Oman, Yemen and others. The country export an excess of one million goat and

sheep (shoats) annually compared to 3.5 million prior to 1998when livestock ban was imposed

by the kingdom of Saudi Arabia .The livestock products not only contribute to the livelihood of

the pastoralists, but also a substantial portion of the daily food intake of the population both in

rural and urban (ministry of national planning of Somaliland, 1999).

Livestock is the foundation of the pastoralist economy in the arid and semi-arid areas of

Somaliland, and is the fundamental physical, financial and social capital of pastoralist

livelihoods. (Bailey et al., 1999; Umar and Baulch, 2007)

The livestock trade has been continued by trader support continued from local authoraties,it is

observed that Somaliland is one of the largest exporters of live animals in Africa .Although the

trade mainly involves live animals to the middle east countries, however generally understood

that there is high but currently under exploited potential for reaping greater benefits for

stakeholders in the livestock sector (UNDP 1998).

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Livestock market of the country are placed where the rural pastoral producers, the urban

consumers and exporter come together to make exchanges. Although livestock markets in broad

sense is more than economic significance (EC-FAO, 1995, AND JOHN DRYDALE 1997).

The livelihood of the smallholders is highly dependent on the cash income derived from

livestock and livestock products Alleviating constrains to marketing, improving market

information and upgrading market infrastructures will potentially increased the welfare of

smallholder producers and urban consumers and improve the national balance of

payments,(Andargachew K. and Broken R.F.2003).The more farmers are aware of the market

demand and price, the higher will be their bargaining power that could improve their income

through getting a larger share of the consumer spending. Market infrastructure and institutional

set-ups will improve the access of producers to potential market whereby they could supply more

volume with higher share of the end market price. These improvement measures will raise the

household income and purchasing power of producers and local traders, which in turn will create

positive impacts on the local economy (Brass, Jennifer (2007). On the other hand, when

income of the producers increases through better access to information, market and

infrastructure, they could improve production, in terms of both quantity and quality, thereby

benefiting consumers,(Ministry of livestock of Somaliland. 2006. Draft National Livestock

Policy, 2006-2016).

The purpose of this research is to identify the price of different animals in different seasons in

Somaliland. For instance, information is required to know the fluctuation of price in different

seasons of the country, based mainly on secondary data, the elements of demand of livestock and

between the qualities attributed and price; Case study in Hargeisa.

1.1.1 Literature review

1.1.2 Overview of livestock production in Somaliland

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Somaliland economy is mainly based on range animal’s resource. Over 70%of the Somaliland

population subsists in pastoralism. Pastoralists contribute more than 60 percent of the GDP and

80 percent of National export. Camel, cattle and small ruminants are widely distributed in all

ecological zones of the country. Sheep and goats are dominant animals, but camel population

exceeds cattle in number (Ahmed Haaji, samater, Salisbury 2002)

Over half of Somaliland populations are pastoral heders who live on products provided by their

livestock (e.g., milk, meat and hides) and sell livestock when cash is needed or when

necessitated by climatic conditions. Pastoralists hold animals for a multitude of reasons.

Livestock are a form of productive capital, providing a stream of desired goods and services,

including milk (the primary good for most pastoralists in our study region), milk, meat, transport,

and traction (Dercon & Hoddinott 2004, McPeak & Barrett 2010, Mogues 2011 They also serve as an important store of wealth and insurance, functions that are extremely

important in the absence of well-developed rural financial markets and given significant

covariate risk due to climate, civil unrest, and epidemiological shocks. Sometimes this wealth is

consumed directly through slaughtering and meat consumption, but more often livestock are sold

and the proceeds used to purchase grain, pay school fees, etc (Bertolli, L.(2000). The modern

economics literature generally understands this as consumption smoothing (Binswanger and

McIntire 1987, Swinton 1988, Bromley and Chavas 1989, Fafchamps et al. 1997).

Much of the past literature has suggested that the issues of supply response, and consequently

prices and market risk, cannot be separated from the effect of rainfall and social and economic

reasons for large herds of livestock.(Konczacki (1978); Sanford (1983); Livingstone (1991);

Little (1992); Franken (1982); Toulmin (1994); Coppock (1994); Fafchamps, Udry, and Czukas

(1998).

Between 1993 and 1998, the volume of trade in Somaliland increased dramatically, surpassing

pre-war levels. This increase has been based on the growth in livestock exports and opening of

Ethiopia –Somaliland border, which has created a vast new market for Somaliland .through the

year 1996 – 1999 some 65% of the trade through Berbera port was reportedly destined for

Ethiopia (Bradbury 1997; UNDP and UNHCR, 1999 and Mohamuod Yusuf Ismail 2011).

Major source of wealth was the increased commercialization of livestock production. A side

from the restoration of administrative function, an immediate preoccupation of the British

5

administration was to revive the protectorate pre-war economic “foundation” the livestock trade

(samatar1989). The process of commercialization was fuelled further 1950s by the oil boom and

the growth in the number of Muslims going on the Haj, creating an annual demand for meat. As

the trade in livestock grew, traders invested in trucks to transport animals, water and animal

fodder (konczacki (1978); Sanford (1983); Livingstone (1991); little (1992); Franken (1982);

Toulmin (1994); Coppock (1994); Fafchamps, Udry, and Czukas (1998)).

The income from livestock exports was also invested in building of Dams and others. The

development of livestock trade stimulated the expansion of towns, communications and the

import of consumer’s goods, such as trucks, clothes, sugar and cereals. Livestock marketing in

Somaliland has gone through important changes since the early nineteenth century. Until the

collapse of the last regime, livestock marketing was based on an arrangement known as the

merchant “jeeble” system (Samatar, Abdi Ismail The State and Rural Transformation in Northern

Somalia 1884-1986, University of Wisconsin Press, Wisconsin, 1998)

1.1.3 Trade and marketing

As a social and economic category, livestock traders take in a multitude of different

actors; from small-scale 'bush' traders to market brokers to large urban-based merchants with

transport and considerable capital (see little 1992). At the lowest levels in the market chain

traders purchase animals from pastoralists up country and sell them, directly or indirectly

through colleagues or secondary buyers, to processors in and around Hargeisa market and other

terminal markets. Their business is arbitrage, trying to earn profits by buying at low prices in

areas and times of excess supply and selling at higher prices in places and times of excess

demand (UNDP AND FOA, 1995). A group of competitive arbitrageurs is essential to efficient

marketing arrangements. Traders are the vehicles by which price signals in one market are

transmitted to another, thereby propagating information on location-specific (demand or supply)

shocks throughout the broader region. Arbitrageurs' costs relate primarily to transport, storage,

information, finance and risk. As these costs rise, trader activity falls, causing greater spatial and

intertemporal price disparities and greater chance for the exercise of market power by one or a

small number of traders (MEDaC1998; FAO 1999).

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In the large urban markets, such as those in Hargeisa, market brokers (often called dilaal) operate

to match urban-based buyers, such as butchers and processors, with sellers who may be

transporting animals from the range areas. The broker charges a fee to the seller of as much as 3

percent of the animal's market value, in order to match him/her with a buyer. The broker may

also charge a fee to the buyer. This practice reduces market uncertainties for both the seller and

buyer. The principle of trust is important in such relations (FAO, 2002).

Under current conditions of poor market information, infrastructure, insecurity, and unfavorable

market access by herders, ethnicity tends to assume an important role in market transactions.

Since formal market contracts and formal credit are rarely used, trust assumes considerable

importance in market transactions (Konczacki (1978); Njiru (1983); Livingstone (1986); little

(1992); Holtzman and Kulibaba (1994).

To minimize transaction costs associated with acquiring market information, market fraud and

enforcement, and weak credit markets, traders and herders often deal with market actors from

their own or closely related ethnic groups. The importance of ethnicity also seems especially

important in long-distance livestock trade (see little 1996; Cohen 1965).

Slaughter and meat handling and distribution facilities are a critical link between the livestock

trader and the final consumer. Orderly markets depend on these facilities to efficiently move

products through the final stages of the marketing channel. If demand and supply do not match in

the channel, wide swings in price can take place (Terra Nuova, 2006). Even if livestock supply

from pastoralists and meat demand from final consumers are reasonably price elastic, capacity

constraints in the marketing channel can create inelasticities of meat supply and animal demand

that result in dramatic price fluctuations even in the presence of perfect competition (Konczacki

(1978); Njiru (1983); Livingstone (1986). As a consequence, matching slaughter and distribution

capacity with the demand and supply of meat is a fundamental task of any livestock marketing

system. This matching can be done effectively only if communications and transport

infrastructure enable good market information availability and responsive movement of animals

and complementary products across space and time, and if supply and demand is reasonably

predictable much of the time (Gryseels 1988; UNDP & FAO 1989 AND 1990, respectively).

1.1.4 Price Patterns and different seasons in Somaliland

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While often overlooked in economic studies, environmental conditions play an important role in

livestock marketing in Somaliland (Stockton, G. 1987). Since a primary role of livestock is as a

productive asset generating milk and calves, and since animal productivity has a strong, positive

relation to the condition of the range ecology in pastoral systems, environmental conditions

necessarily affect demand for and supply and prices of livestock (Stockbridge, M 2004).

Moreover, environmental conditions can affect marketing operations, particularly transport and

disease control, that affect the costs and therefore the behavior of market intermediaries (see:

FAO, World Bank and the European Union, 2004; Little,2005; Little 2003; Little, 1996;

Holleman, 2002; Steffen et al., 1998; EU, 1996; EC-FAO,1995; Stockton, 1987).

The connection between rainfall levels and the flow of livestock to markets in the study area is

critical since pastoralists tend to build herds during wet seasons localy known as (GU) and

drastically deplete their herds during periods of drought seasons localy known as (Abaar),

(Konczacki (1978); Sanford (1983); Livingstone (1991); Little (1992); Franken (1982); Toulmin

(1994); Coppock (1994); Fafchamps, Udry, and Czukas (1998)). During dry periods, animal

productivity falls, so the value of livestock to pastoralists’ falls and the need for cash with which

to purchase grain (a cheaper source of essential kilocalories and macronutrients than meat)

increases, fuelling regular, sharp increases in livestock supply(Steffen P., Shirwa A. H., Addou

S.I. 1998). This shift often outstrips the marketing and processing capacity in the system, leading

to disorderly marketing and large absolute price declines (Konczacki (1978); Njiru (1983);

Livingstone (1986); little (1992); Holtzman and Kulibaba (1994).

Livestock cycles, defined as systematic rises and fall in livestock numbers over a period of years,

are common Somaliland and couse the fluctuation of price in the different seasons (Little, P.D.

2006). Drought‐conflict relationships are complex but may be traced—within certain limits—

through price effects associated with production/supply changes, which often result from weather

variation. While some of these relationships appear obvious, there are some that are quite

intricate with nuances worth noting for explaining price movements during drought and famine

(Knips, Vivien. 2004. Review of the Livestock Sector in the Horn of Africa (IGAD Countries).

This holds for livestock prices in particular. Beforehand, the domestic and foreign demand for

livestock in Somalia can be expected to be stable throughout the year, except before Eid al‐Adha

celebrated after the Hajj. Thus, changes in livestock prices are largely supply driven.5 Market

8

supply of livestock varies in terms of quantity and quality within the same species and across

species depending on the regional severity and progression of the drought (Dercon & Hoddinott

2004, McPeak & Barrett 2010, Mogues 2011),

The sale of livestock and livestock products is the main source of cash income. Small ruminants

(sheep and goats) are used as immediate sources of cash income. However, cattle and camels are

sold when there is a need for a higher amount of cash. Camels fetch a higher price than any

other animals (EC-FAO, 1995). The size and condition of the animals, the season of the year and

the distance from the main marketing centers influence the price of animals. There is seasonal

fluctuation in the price of animals coming to the market. In general, animal prices are higher

during the rainy season and falls during the dry season (Teka and Azeza, 2002; Teka et al, 1999).

During the dry season animals lose body condition due to shortage of feed and the pastoralists

also desperately need to sell their animals before further loss of condition and death and to buy

grain for family consumption. These are the main reasons for the significant decline of the price

of animals during the dry season (Assefa M 1990).

In 1994 the average selling price for one head of shoat(sheep and goats) was 55 USD (EC-

FAO,1995).As exports increased the average price per head declined;1996 the average sale price

per head was 38 USD (Drysadle, 1997) and by 1999 the average fluctuated between 27 USD

and 32 USD per head. While the sale price has been declining, the total cost per head to the

supplier has remained virtually the same.

According to senior officials in the ministry of finance, revenue from livestock exports

contributes as much as 30% of the government revenue in 2000. However, since not all livestock

export revenues are reflected in the budget. In 2000 budget submitted by the government was 74

billion Somaliland shillings, equivalent to 25 million USD. Majority of this budget is came’s

from the revenue of the livestock (ministry of finance of Somaliland, 2000).

The price of animal products is dictated by the season of the year and the distance

from the main towns (Chen, K, M. Ali, M. Veeman, J. Unterschultz, and T. Le. 2002). The

price of milk and milk products is generally higher during the dry season due mainly

to limited supply of the products than during the wet season. The price is also higher

9

in places that are closer to towns as there is a higher demand for milk in the towns

than in the rural areas and live animals (Coppock D L 1994)

1.1.5 Livestock production constraints

Lack of feed and water during the dry season and drought is the main constraint affecting

livestock production in the area. Shortage of rain and the frequently recurring drought in the area

is a major cause for reduced forage production and quality. Shortage of feed and water and the

harsh climatic condition of the area seriously affect the health and productivity of animals. Bush

encroachment is exacerbating the problem of feed shortage. Encroachment of the rangeland by

some undesirable plant species can reduces accessibility of forage leading to reduction of

effective grazing areas. The prolonged dry season and drought are the causes for high mortality

rate (Mukasa-Mugerwa E 1981). Diseases such as foot and mouth disease (FMD), anthrax, black

leg, contagious bovine pleuropneumonia (CBPP), contagious caprine pleuropneumonia (CCPP)

and trypanosomiasis are reported to be occasional health problems in the area. External parasites,

particularly ticks and mange mites are also of significant health problem. Ticks suck blood

thereby reducing the condition and productivity of animals. They can also predispose the animals

to tick-borne diseases. However, internal parasites are not a serious threat in the area since the

relatively dry conditions are not suitable for multiplication of most of the internal parasites that

are known to cause animal health problems (Ministry of livestock of Somaliland 2003).

Expansion of cropping and land grabbing for cultivation and private enclosure are causing

shrinkage of grazing areas and loss of key resources for dry season and drought period grazing.

Demarcation of regional boundaries and ethnic conflicts also hinder movement of the pastoralists

in search feed and water thereby hampering the indigenous coping mechanisms (Nicholson M J

and Cossins N J 1984).

1.1.6 Objectives

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1.1.7 General objectives

The objectives of this study are (i) to reviews current knowledge on market structure,

performance, export and related issue, livestock marketing development effort and outcomes. It

then identifies information gaps and recommends research that may help to reduce inefficiencies

in the domestic market and identify opportunities in the market.

(ii) To evaluate the price of different animals (grades) in different seasons (iii) to provide the

dynamic livestock export and price information that informs the process toward

improving livestock trade and marketing.

1.1.8 Specific Objectives

To identify the price of different animal in different seasons in Somaliland.

To determine the factors that affects the price of the animals after seasonality.

To get better knowledge of how the existing livestock trade and marketing systems

operates in Somaliland.

CHAPTER TWO: METHODS AND MATERIALS 2.1.1 Study area

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Hargeisa is the capital city of the republic of Somaliland, Hargeisa is located Northwest of

Somaliland (latitude 9o18’N longitude 44o03’E). The city is situated in a valley in the Galgodon

(Ogo) highlands, and sits at an elevation of 4,377 feet (1,334 m). Home to rock art from

the Neolithic period, Hargeisa is also a commercial hub for precious stone-cutting, construction,

retail services and importing/exporting, among other activities.

Hargeisa is the center of the trade and commerce and harbor the international airport. Being the

capital city of Somaliland, it is also hub for nomadic stock herders, who come here to sell their

animals. Hargeisa city’s present resident population are approximately (650,000 to 800,000)

inhabitants with un-precedent rapid pace of growth according to the latest Hargeisa Abstract

statically 2000 city administration estimate. Hargeisa is also the center of the other key cities

including, Burao, Borama Berbera, Erigavo and lasanod.

Hargeisa is the financial center to many entrepreneurial industries ranging from food processing,

gem stonecutters, construction, retail, import and export, Internet cafes, and companies that

process remittances from relatives abroad who send money. Some families have moved back to

the city, living in mansions in the hills during the summer. Hargeisa city is the namesake

of Hargeisa Minerals & Resources Company and contains many of Somaliland's business

headquarters in its city limits. The city also has private and public menageries, housing animals

from the region including lions ,leopards, antelopes, birds and reptiles

Hargeisa receives larger amounts of rain, and used to be surrounded by forest when the city was

smaller but the countryside around the city still has small juniper forests. Near Hargeisa are the

fertile Sheikh and Daallo mountains, which also receive large amount of rain. South of Hargeisa

is the Hawd Savannah (Baligubadle) which attracts many different animals to graze in the area.

Hargeisa is situated near the city of Gabiley, which serves as an agricultural center in northern

Somalia. The town's Allay-Baday area produces tons of tomatoes and onions each month during

the rainy season. The city of Arabsiyo is also located nearby, and is noted for its lemon

production.

12

Figure 1

2.1.2 Data Collection processes  During the processes of data collection the main source of information was gathered from key

informants in the country, these include: livestock traders/exporters, Ministry of livestock,

ministry of national planning, and Somaliland chamber of commerce industry and agriculture

and Terra Nova (International NGOs) which works in the livestock sector in Somali ecosystem.

2.1.3 Questionnaire

A questionnaire was prepared and administered with 27 members including traders, farmers,

brokers, Somaliland chamber of commerce, general director of ministry of livestock. The

questionnaire focused the price of different animals (grades) in different seasons in Somaliland

STUDY

AREA

MAP OF SOMALILAND Hargeisa – study area

13

CHAPTER THREE: RESULTS

3.1.1 Livestock prices

The main determinant of pastoralist and trader incomes is livestock prices, but prices of animals

vary greatly between markets and over time. Some factors that influence price determination are

related to the condition of each animal, such as its breed (e.g. the dominant and preferred breed

of sheep in Somali ecosystem is the Blackhead sheep), age, sex, weight and preferred traits such

as colouring and body shape, which affect breeding potential.

A second set of factors that affect livestock prices is market conditions. Dominant among these

are temporary rises or falls in demand or supply. Spatial variations in livestock prices are also

observed across the region, due either to differences in transport and transactions costs on

different trade routes. Another complex factor influencing prices is seasonality, which affects the

condition of animals and is associated with particular patterns of market demand. In general,

prices are lower during the dry seasons, when animals lose weight, and higher during the rainy

seasons, when the animals are fatter. Specific trends, season by season, are as follows;

Jilaal: during the hot dry season (January to March), livestock are cheap because pasture

and water are scarce, animals are susceptible to diseases, and pastoralists are in great

need for purchased food, so they sell their animals at almost any price.

Gu’: during the first rainy period (April to June), livestock prices rise as pasture and

water are available. Animals are calving and are in milk, and pastoralists are under less

pressure to purchase food, so the volumes offered for sale are low. Instead of selling,

many pastoralists are buying animals for fattening, pushing up prices.

Hagaa: during the dry season (July to September), prices fall as animals lose weight and

exports are limited by shipping constraints, some caused by strong winds blowing in the

Red Sea.

Deyr: during this second rainy season (October to December), prices start to rise again.

From the pastoralist perspective, livestock marketing seasons are either good or bad, according

to supply and demand conditions rather than rainfall. Apart from climatic seasonality, another

powerful seasonal feature of livestock marketing is religious festivals and holidays. Most

significantly, demand for sheep and goats peaks between the Islamic months of Ramadan and the

Arafa – the exact timing of which varies from year to year – when prices also peak. During the

(Haj), pilgrims to Mecca and Moslems who remain at home are required to slaughter a sheep.

14

Large numbers of live animals including sheep, goats (shoats).cattle and camels are brought into

Saudi Arabia, mostly imported from “Somaliland” (through Berbera).

Approximately 70 per cent of annual sheep and goat exports take place in the Hajj period, when

prices are also high. The Red Sea and Gulf of Aden have formed an important trading nexus for

many centuries, linking ancient trading empires. The economic growth in the Middle East has

had an important effect on the Somali territories for several decades, in terms of the importation

of both labour and livestock. Although the majority of meat, particularly mutton/lamb, for the

Middle East comes from Australia, sheep and goats from the Horn of Africa and Somali

territories in particular have an important niche market role. Somali small-stock is preferred for

its taste, smell, colour, longevity and size. Its provenance from another Muslim country is also

frequently mentioned as an advantage, particularly during the Hajj.

3.1.2 Catchment area

Hargeisa livestock market is the catchment area, and it is well structured livestock market which daily are sold different animals include; sheep and goats (shoats), cattle and camel. These animals are intended for two main reasons which are export quality and domestic quality. Figure 2Catchment area Hargeisa livestock market.

15

3.1.3 Livestock marketing system in hargeisa: Brokers; Brokers, also known as the ‘Dilaal’ or ‘Dallaal’, are a central feature of livestock marketing in

Somaliland. They are based in main markets and play pivotal role in all transactions that are

concluded in these markets. Chart 1 shows the concentration of brokers relative to other market

participants in Hargeisa livestock markets. Brokers facilitate exchange between other traders and

there is a broker in every transaction in the market. Price is discovered through bargaining

between a buyer and seller through the facilitation of a broker. Besides facilitating exchange,

brokers play the important role of guaranteeing that the livestock being traded is not stolen.

They also facilitate in settling of other disputes and in some markets; they contribute to provision

of security. More often than not, brokers require a licence to operate and derive their payment

from a charge levied on every transaction they facilitate in the market.

Petty traders

Petty traders comprise of the ‘jeeble’. The petty traders are those traders who buy animals in one

market and sell them to another market in order to exploit price differentials between the two

markets. The petty traders may also try to add value to purchased animals through supplementary

feeding and treatment. Many traders who are described as Petty traders operate at a local level,

moving animals from village markets to larger markets in the same district or region or even

other larger markets in other regions. All and all petty traders buy animals from a market and

resale them in the market at a profit.

Agents

Agents are market participants who supply animals in response to orders or requests from actors

further up the supply chain. They source and transfer animals on behalf of their clients based on

an established rapport and trust. In some cases, agents may also act independently by using their

funds and thus trading as petty traders in addition to their role as agents.

16

Exporters

Exporters are traders who act as the final link in the chain between the Somaliland livestock

marketing system and the importing country. They assemble livestock from different regions of

Somalia and transport them to destination countries and arrange for their sale.

Chart 1

 

3.1.3 Livestock grade: 

Livestock grades exists in Hargeisa livestock market as three point grading system for small-

ruminants and large animals which are Shoats, cattle and camel for grade 1,2,3. And these

grades are depending on nutritional status, age and sex. The grading categories in small

ruminants is not as well defined, probably because they are traded in batches in export markets

where exporters may mix different grades in a single batch so as to maxim us profits and by

extension lessen their demand for grades of highest quality this quality traits significantly

buying and selling price of animals .

These have two key implications first there is indeed exists an informal grading system practiced

in the Somaliland livestock market, and secondly this grading system determined by buying and

selling price of livestock.

17

This information provides an important starting point with regard to formalising these informal

grading systems and determines the price of different animal’s either for export quality or

domestic quality. The informal grading is based on a number of attributes:

Age of animal;

Sex of animal;

Nutritional status;

Weight and size;

Breed (in case more than one breed exists); and,

Health status.

Table one (result) shows , Hargeisa- small ruminant export quality price in 2011, table two

shows Tog-wajale-cattle export quality price in 2011,table three demonstrates Hargeisa-camel

export quality price 1n 2011,table four indicating Hargeisa local domestic quality price of

different animals in 2011.

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Hargeisa –small ruminant export quality price IN USD ($):

Table One NB: Age of Grade one= 3-4years and the Grade two= 2-3 years

NB: the blue color indicates sheep and goat grade 1. The red color shows sheep and goat grade 2. The yellow color shows sheep and goat grade 3. The green color shows young sheep and goat grade.

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Tog-Wajale- cattle export quality price in USD ($);

Table two. NB: GR means (Grade). Immature means (young calf). Cattle Age Grade one = 5 years Cattle grade two =4 years Cattle Grade three= 3 years Young calf grade one= 1- 2 years

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NB: LO (means cattle) CJ = Cujul (means young) calf) Hargeisa-camel export quality price in USD ($);

Table three. NB: Age of Grade one=9-10 years, grade two=7-8 years and grade three= 6years NB: GR means (Grade) Immature means (young camel)

21

NB: the blue color indicates sheep and goat grade 1 The red color shows sheep and goat grade 2 The yellow color shows sheep and goat grade 3 The green color shows young sheep and goat grade

Table four

Hargeisa local domestic quality price of different animals in USD ($)  

species  Grade  price ($) shaots  1  33 shaots  2  25 shaotS  3  18 camel  1  280 camel  2  230 camel  3  215 cattle  1  200 cattle  2  185 cattle  3  130 

22

Chart 2 The above chart indicates the price of different animals’ interms of local domestic quality (local consumption), including camel, cattle, sheep and goat, because of it uses localy they do not complete the requirement of export quality

23

Sheep grade one Goat grade one

Camel Grade one Cattle Grade one

24

CHAPTER FOUR: DISCUSSION During this work data of livestock price was collected from key sources in the country including

traders/exporters, ministry of livestock, ministry of national planning and Somaliland chamber of

commerce and TERRA NOUVA. It was established to a large degree that the determining factor

for producers and livestock business trader incomes is the standing livestock prices, which

fluctuates to a great extent between markets and times. Other factors that manipulate price of

different animals are related to the state of each animal (interms of its health and body

condition).

Another factor that couses the fluctuation of the prices is season; during droughts a greater

numbers of livestock are sold for slaughter, as herders attempt to minimize the complete loss

represented by livestock mortality. Sales are low in the years following a drought, when

producers reconstitute their herds. Seasonal variation in livestock slaughter is also considerable.

Greater numbers of livestock are sold and slaughtered during dry season than during the rainy

season. Forage availability is lowest during Jilaal (2nd dry season), so milk production and the

general condition of the livestock deteriorates. The nomads slaughter and sell more livestock,

consuming more meat and using the money from livestock sales to buy grain. Moreover, the

nomadic herds are closer to towns and livestock markets, as the pastoralists return during the dry

season to watering points. Livestock become widely dispersed and there- for less accessible to

butchers and traders. The condition of the animals improves and most of the calf, lamb and kid

drop takes place at the beginning of GU season. Livestock numbers and livestock product are at

their highest level during the rainy seasons, when milk becomes abundant & the principal item in

the pastoral diet. It is imperative there, that herders have little or no need to sell their livestock.

They prefer to hold on to their animals while they gain weight, thus fetch more prices.

It was observed that, in the absence of formal public sector market information dissemination

system, there is limited flow of information on the supplies, qualities and prices of livestock

along the market value chains ( as Andargachew K. and Broken R.F. Said in 2003).This is

because some traders, especially exporters, are aware of the specifications of quality

requirements and prices in the importing countries while others are not and voluntary sharing of

information may not take place where information may be a source of market power. However,

there is a possibility that knowledgeable exporters transfer their knowledge to their purchase

agents and small traders down the value chain in a different form to suit locally used terms and

25

descriptions to get what they need. In that case the information flows but in a transformed state,

hence specific responses by market agents about product attribute requirements in the importing

countries may differ. It was also found that some traders target specific type of the animals that

they purchase, depending on the target market as there are preferences for specific types in

different recipient markets. In Consistence with type preferences, there are also differences in

prices. However, local type names are used in the absence of scientific terms that would have

been useful for grading. Also there is much more uniformity in terms of size among individual

animals in this region or even among different animals (sheep, goat, cattle and camel) produced

in Somaliland, hence this may not be a key variable for quality or grade determination. In

general, the assessment of traders’ knowledge of live animal quality requirements in the

importing markets provides insight into the development of formal grades and standards, (as

Stockbridge, M Said 2004). MAL

Another point that was found during this work was that livestock traders describe the quality of

the animals according to grades. There are three most commonly used animal grades in the

market: Grade I, Grade II, and Grade III. Grade I refers to the best quality animals and this is the

most frequently demanded class of animals, it is the most expensive to purchase. Nevertheless,

most traders also take Grade II and a few Grade III animals. When the traders were asked to

describe what each of the different grades embodies, it was observed that a combination of

different levels of specific attributes or characteristics attributes is considered when assigning

these grades to animals and such attributes include nutritional status of the animal, age, size and

weight. While nutritional status was the most frequently considered interms of quality attribute in

defining grades, quality attributes such as age, size and weight of an animal tend to be highly

correlated with each other and could therefore be viewed as representing the aspect of the

volume quantity of meat that an animal can produce. Size may have also represented a substitute

for body conformation of an animal since tall and large size animals are reported to be preferred

for export quality, and others which do not have the above characteristics are used for local

consumption.

Some of the traders identified some constraints during the course of this work; fluctuations in

livestock prices, high costs of animals, unauthorized multiple road taxes and poor market support

services. The problems in the destination markets (importing countries) include: delayed

26

payments, low selling prices, lack of recognized certification, seasonal fluctuations of import

demand, and low preferences for Somaliland animals in some countries.

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION 5.1.1 CONCLUSION This study was conducted with the main intention of identifying and undertaking the price of

different animals in different seasons in Somaliland. This study identified that the prices of

animals fluctuate to a great extent among markets and over time. The major important factors

that influence the fluctuation of price are related to the condition of each animal, seasonality,

(during the drought animals become weak due to lack feed and water, and during the rainy

season animals become good interms of body condition), In broad-spectrum, prices are lower

during the dry seasons, when animals lose weight, and higher during the rainy seasons.

Generated results were presented in tables, pie-charts and graphs. This study also found that

there were no planned formal channels for disseminating marketing information (prices, quality

attributes, volumes, etc) to support Somaliland livestock marketing. Establishing an effective

livestock market information system that serves both the public and private sectors is critical to

the improvement of the operational efficiency of livestock marketing in Somaliland. Current

knowledge on livestock market structure, performance and price is poor and inadequate for

designing policies and institutions to overcome perceived problems in the domestic and export

marketing systems. The source of revenue of the smallholders is extremely dependent on the

cash income originated from livestock and livestock products. Solving any constraints in the

market, improving market information and upgrading marketing infrastructures will potentially

increased the welfare of smallholder’s producers and urban consumers and improve the national

balance of payments.

5.1.2 RECOMMENDATION The study brought the ideas and endeavors of a number of organizations that support livestock

marketing in Somaliland. These include; Livestock traders, brokers, petty traders, and exporters,

Veterinary service, and Local government municipalities.

27

On the other hand, in order to increase the benefits and the price of different animals in

Somaliland. A number of factors that can improve the price of animals were highlighted as

shown here:

Price intervention must be done by the government when and where needed.

Different markets must be exploited in order to increase the price of different animals and

also to increase the income of the producers of the livestock.

Somaliland livestock producers are pastoralists in which case they should be trained in

basic animal health treatment and their awareness of the adverse effect of incorrect usage

of veterinary drugs must be raised, in order to increase the quality and the price of

animals.

Secure an adequate access to basic production inputs together with risk coping

mechanisms for natural disasters and price shocks.

Policies and strategies to enhance the ability of smallholders and small-scale market

agents to compete in livestock product markets; for instance to improve the income of the

livestock stakeholders must be put in place.

Strong relationships among various chain actors (including producers, agents, petty

traders, exporters and the government to cooperate on mutually beneficial

actions/investments) and strengthened farmers’ organizations be developed.

Standards and grading mechanisms should improve in order to identify high-quality

animals and their price.

Dissemination of livestock market information to livestock producers, in order to increase

the communication between livestock stakeholders in the country.

Government should improve the infrastructure of the livestock market in order to increase

the volume of the animals marketing per day.

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Annex One     

Research Questions 

During my research a set of questions were created in order to facilitate the identification data sources, check list and structured questionnaires as appropriate the questions formulated were related to the specific aspects of livestock marketing such as graded and standard ,trader’s awareness of import quality specification requirements, prices , transaction costs and margins and flow of information. The main research questions as follow below: 1. What percent of people trading in the market do you think are traders and what percent are Producers/farmers? _____________% producer/farmer ______________% trader 2. How many people do you think trade in this market on an average day? _____________ Sales and Trading 3. What are the animals that you are selling in this market today? _______________# Sheep _______________ # goat’s # _______________cattle# _______________camel 4. Do you have to pay a fee to sell your animals at this market? Yes ____________ No 5. How much is this fee? ____________ Cost per sheep ____________Per goat ____________per cattle ___________per camel 6. Do you own transport? Yes No 7. Do you rent transport? Yes No 8. What is the cost for the transport of animals? (Please describe) Trucking fee____________ from where____________ Distance traveled? ____________ Other _________________ 9. Are the animals you are selling acquired locally or from outside the province? Local ____________ outside ____________ 10. If you are selling animals from outside the province where are they from? ______________ 11. What is the price of the sheep, goat, camel and cattle? That you are selling? ________________ Grade 1 ________________ Grade 2 _________________ Grade 3 12. What factors most influence the price of the animal? 13. If you are a trader, how many animals do you sell in one month? ______________ 14. Is the volume of animals traded throughout the year relatively stable? Yes ____________ No ____________ 15. If it varies, what is the season when you have the highest volume of trade? Summer____________ winter ____________ spring ____________ What is the period when you have the lowest volume of trade? Summer____________ Winter____________ Spring ____________ For the period of high volume of trade How many animals do you sell in 1 month? __________ Sheep, goats, camels and cattle

32

16. Are there government regulations for the selling of animals here? Yes____________ No ________ 17. Do you have to obtain licenses to trade your animals? Yes____________ No ____________ 18. Do you have any suggestions for how government policies or investments can improve the Livestock market trade? Annex TWO Total animals marketed in last year (2011), either its quality exported animals or local domestic quality animal’s interms of small ruminants, cattle and camel in the three main markets of Somaliland; Hargeisa, Tog-wajaale and Burao as follow:

Hargeisa – Total Number of animals marketed (export and domestic quality)

Burao – Total number of animals marketed (export and domestic quality)

33

Tog-Wajaale-Total Number of animals marketed (export and domestic quality)