April 2 nd 2008

1. April 2nd 2008

2. OUTLINE • Introduction • Livestock Sector Status • Theoretical Framework • Data • Results • Key Discussion Points • Conclusions • Implications

3. INTRODUCTION • Widespread recognition that the Zambian livestock sector has huge potential but continues to receive less attention. • Recent positive growth in agriculture mainly attributed to the crop sector. • 2009 budgetary allocation to livestock development (6%) but FSP (40%). • Potential for growth in the livestock sector is there: • Increasing per capita consumption of livestock products. • Supply of livestock products outstripped by local demand in Zambia. • Demand for Zambian livestock products has been steadily increasing in the Southern African region.

4. Problem Statement • Smallholder livestock producers in Zambia face constraining factors that have inhibited their potential. • Compounded by chronic incidence of animal diseases. • Vital to understand drivers of market participation and animal health management.

5. Study Focus • Smallholder livestock producers in Zambia • Cattle, milk and goat markets: • What influences participation in markets? • What influences sales, conditional on participation? • Cattle disease management • What drives smallholder use of preventive and curative modern methods?

6. Study Objectives • To identify policy options that would enhance smallholder livestock development in Zambia. • Specifically: • Descriptive characterisation. • Identify market participation determinants. • Identify factors influencing animal health management decision-making.

7. LIVESTOCK SECTOR STATUS • Contributes about 35% to the agricultural GDP. • Three main categories of production systems: • Traditional, small-scale commercial & commercial • Traditional is major source of marketable livestock though off take rates are low. • Marketing chain of beef cattle in the traditional sector is lengthy and cumbersome. • Smallholder dairy producers supply most of their milk to the informal sector. • Goat meat not fully integrated into the formal butchery sector.

8. Livestock Policy Focus • ACF identified key areas critical to the enhancement of livestock development: • Animal disease control • Animal production and processing • Marketing • Imperative that devised strategies meant to enhance livestock development are accompanied by well-researched findings.

9. THEORETICAL FRAMEWORK • Market participation: • f(Transaction costs, human capital, physical capital, financial capital). • Heckman selection model. • 1st stage: determine the factors that affect the decision by smallholders to participate. • 2nd Stage: determine the extent of participation. • Cattle disease management: • f(Economic factors, biophysical factors, institutional setting, farmer characteristics, farm characteristics). • Modeled using the probit approach.

10. DATA • Used the 2004/2005 PHS of small and medium sized holdings in Zambia conducted by the CSO. • Based on the new sampling frame proposed by Megill (2004). • A stratified two-stage sampling scheme was used: • Stage 1: The PSUs, SEAs, were selected using PPS • Stage 2: Households selected randomly in each PSU • A sub-sample of 2800 livestock owning households was used.

11. RESULTS

12. Results (2) • Average number of cattle owned was 9.27 per household, with Western (18.85) being the highest and Luapula (3.75) the lowest. • Only 20% of cattle producers sold cattle. • Cattle off-take rates were below 5%. • Daily milk production averaged about 10.77 litres per household • Only 25% of milk producers sold the surplus milk. • Average number of goats owned was 6.80 per household • Off-take rates for goats stood at 17%.

13. Results (3)

14. Results (4) Reasons for not Practicing Tick Control Type of Tick Control

15. Results (5) Sources of Modern Veterinary Medicines

16. KEY FINDINGS • Households with more livestock generated marketable surplus and hence were more likely to participate. • Participation by male headed households was consistent with a priori expectations. • Educated household heads participated more due to their ability to bargain for better offers. • Household size positively influenced participation attributed to availability of labour and pressure to meet household needs.

17. Key Findings (2) • Chronic illness negatively affected participation in milk markets. • Negative association between the proximity variable and the decision to participate in milk markets was counterintuitive: • Opportunity cost of labour • Geographical location of milk producers in Zambia. • High population density was associated with participation and increased sales of livestock products because of the likelihood of increased demand.

18. Key Findings (3) • A high asset portfolio was positively associated with participation and sales for livestock products. • Negative association of the variable sex with the decision to use tick control. • Positive influence of the proximity variable with animal health management decisions.

19. CONCLUSIONS • Participation and sales in all 3 livestock markets was influenced by: • Education level of the household head • Number of livestock owned • Extension visits • Population density • Value of assets • Illness, ownership of other livestock types and proximity to the rail/main road had a negative effect.

20. Conclusions (2) • The decision to use animal health management methods was influenced by: • Household characteristics • Accessibility to animal health management facilities • Location of producers.

21. IMPLICATIONS • Implications from this research were: • Production enhancement. • Training and education. • Empowering producers through group organisation. • Enhancing extension in livestock issues • Gender focused training. • Infrastructural development. • Access to animal health management facilities.

22. Implications (2) • For future research: • Panel data analysis useful for dealing with seasonal dynamics. • Deal with possible endogeneity

23. THE END THANK YOU!!!!