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«FAO ANIMAL PRODUCTION AND HEALTH paper ADDING VALUE TO LIVESTOCK DIVERSITY Marketing to promote local breeds and improve livelihoods Cover ...»

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Transport and communication One reason livestock raisers have difficulty in marketing their products is because of where they live: scattered in sparsely populated, remote areas with poor infrastructure. Transport and communication were thus key elements in most of the cases.

Arranging transport from the producer to the processing centre or point of sale was vital for live animals or meat and milk, both of which are highly perishable. Umzimvubu Goats, the Tiviski dairy and the Somali milk traders arranged to collect the raw product from the livestock keepers, either using their own vehicles or by third parties. In Argentina, the infrastructure for transporting goats to the abattoir and meat to customers already existed, so no intervention was necessary. Wool and cashmere are not perishable, so transport from producer to processor was less important in these cases.

The problem of getting the processed product to the retailer or consumer also had to be addressed in several of the cases. Solutions included using their own transport (Tiviski has a fleet of vehicles to distribute its dairy products), using third-party transport companies (as in Somalia), or arranging shipments via export companies (India, Mongolia). At least two cases solved the problem by having buyers come to them: the Mercado de la Estepa caters to passing tourists, while in Kyrgyzstan, village organizations rely on visits by traders to buy their cashmere.

Adequate roads are vital for a functioning value chain. The milk marketing system in Somalia depended on a major infrastructure investment, the building of an asphalt road linking the source area with the market. The lack of roads in much of Mongolia, Mauritania and Somalia is a serious impediment to improving the value chain.

Long distances make good communications vital. Much of this communication occurs via established linkages, networks and cooperatives. Where such institutions exist and can be adapted for the new value chain, it is important to build on them rather than to try to create new linkages.

Where such linkages were lacking, the enterprises tried to create them, either by forming new organizations of producers and processors, or by creating strong ties between the producers and the central enterprise. Such attempts have been succeeded in some instances (Tiviski has links with each of its many milk suppliers), but have failed in others (witness the attempts in Mauritania and Mongolia to form producer groups). See the discussion below on institutions for more on this.

Two of the cases (India sheep and Mauritania camels) mention the increasing importance of mobile phones. Signal coverage is still sparse in many areas, especially in remote and mountainous areas, but mobile phones are a becoming a vital link between raw material producers and the enterprise they supply.

Adding value to livestock diversity The internet is important further down the chain. Email and websites link the enterprise with customers throughout the world: they enable enterprises to promote products, identify potential customers, negotiate deals, coordinate deliveries, and maintain trust.

Standards All the cases involved some kind of standards for product quality. In some cases this was imposed by outsiders. Cashmere, for example, is traded according to recognized standards on the world market: fibres of a certain diameter and length fetch a particular price. Wool is also traded according to particular grades: producers must comply with these if they hope to sell their product. Government food safety regulations, certificates such as Protected Designations of Origin, and supermarkets’ quality controls impose standards and rules that abattoirs must comply with.

In some other cases, the enterprises themselves imposed strict standards. In India, Shramik Kala set design criteria to guide the artisans who make the handicrafts and instituted controls to ensure they comply. The Tiviski dairy in Mauritania also emphasizes quality: it tests all incoming milk, ensures that its products are produced hygienically, and takes back unsold produce from retailers to ensure that customers do not purchase out-of-date inventory.

The Argentina sheep wool case does not mention quality standards. But two mechanisms may be at work here: the committees in the Mercado de la Estepa keep a careful eye on the products that members supply, and carefully vet and guide new members to make sure they conform to whatever guidelines exist. And individual members get paid only when the products they have made are sold. That encourages them to understand customer demands (which they can learn first-hand when they take turns to act as sales staff) and to produce items of a quality, and at a price, that the customers want.

Even in the Somalia case, where there is a weak government and no central organization to manage the value chain, a form of quality control has emerged. Milk that has gone sour because of the heat and bumpy roads fetches a lower price than fresh milk.

The long-distance relationships between market retailers and the primary and secondary traders transmit these price signals back up the chain: one can expect a retailer who gets sour milk from a wholesaler to complain loudly, and for that message to be passed back to the milk suppliers. That is why the drivers who transport the product from the interior drive so fast.

Institutions Building some form of institution featured in all eight cases, but the type of institution varied widely: a loose, spontaneous network (Somalia), production and marketing groups (Mongolia, Kyrgyzstan), coordination bodies (Argentina goats), large, formal cooperatives (Argentina sheep, India, South Africa), and a private company (Mauritania). Most of these institutions had specialist functions and were active only at the beginning of the chain (the shepherds’ cooperatives in India), in the middle (the network of women milk traders in Somalia), or at the end (the organization that distributes Mongolian camel wool in the United States).





Several of the larger institutions had multiple functions and covered most or all of the PART 4: Analysis 123 chain: the Tiviski dairy in Mauritania, Umzimvubu Goats in South Africa, and the Mercado de la Estepa in Argentina. They not only performed functions within the chain (processing, transport, quality control, etc.), but were also responsible for managing the chain as a whole.

But chain managers are not necessarily good at everything. Tiviski deliberately has not got into the business of producing milk – it leaves this to camel owners who are specialized in this task. Shramik Kala has handed responsibility for marketing to Mitan Handicrafts, a specialist company. And although Umzimvubu Goats runs its own retail outlet on site, it sells much of its output through third-party outlets that can reach customers much more effectively.

In Kyrgyzstan and Mongolia, NGOs have taken on the role of managing the chain, but they lack the range of skills required to perform all the necessary tasks. They have tried to stimulate the creation of new institutions to handle these – producers’ cooperatives, marketing organizations, etc., but so far with limited success.

Building institutions. Efforts to benefit the poor are often started by development projects that involve government, donors, NGOs, consultancy companies and research institutes. Six of our eight cases fall into this category. But funds run out and projects come to an end, so it is necessary to create new institutions that carry on and expand the production and marketing effort as viable, self-sustaining economic concerns.

This institution building has been successful in three cases. In India and Argentina, cooperatives manage the production and marketing of wool products. Good product design, active marketing and buoyant demand result in profitable enterprises and rising incomes for members, and attract new members to join the cooperative. A democratic structure and clear rules encourage members’ involvement in the cooperative’s work. In South Africa, a community-controlled company manages production and marketing of goat meat and handicrafts, but governance problems need to be fixed if it is to function properly.

In three other cases, attempts at institution-building are still at an early stage, or initial attempts have failed. In Kyrgyzstan and the Argentina goats case, it is too early to tell whether attempts to institutionalize the marketing have been successful. In Mongolia, the NGO leading the project has tried to create producers’ cooperatives to manage the production and marketing of camel wool. But cultural and logistical constraints make it difficult for artisans in widely scattered locations, some of whom are nomadic, to get organized. The NGO is thus left with the task of coordinating production and marketing itself.

The Mongolia case illustrates a dilemma that is typical of market-development projects:

should efforts go first into building local institutions and then to helping them produce products and build links to the market? This approach runs the risk of local people losing interest because they do not see a quick return. Or should it seek first to match a product to a market, then build the local institutions, and transfer responsibility to them? This approach risks failure because it proves impossible to transfer the skills and responsibility adequately.

The Mauritania dairy case is different because no transfer of skills and responsibility was involved. Tiviski is a private company that established and manages the marketing chain.

Its founder did not plan to hand over responsibility for managing the chain to another organization at some point in the future. She had to start from scratch and learn by herself Adding value to livestock diversity what works and what does not. Tiviski’s owners have a deeper commitment, and need, to making the chain work than (say) the staff of an NGO, a development project or research institution. If the chain works, Tiviski prospers; if it fails, it will go bust. There is no outside donor ready to extend funding for another five years; if it wants to invest, Tiviski must apply for loans at commercial rates (though the dairy did receive an initial loan from a development agency early in its history).

The Mauritania case also illustrates how hard it is to build local-level institutions. Tiviski encourages its suppliers to form interest groups or cooperatives. Paradoxical though it may seem, this would be in Tiviski’s interest: strong local groups of suppliers would be negotiating partners on subjects such as prices and quality, and would ease activities such as organizing, payments, quality control and extension work. But efforts to organize such groups have failed, for similar reasons to those in Mongolia: the independent, mobile lifestyle of the pastoralists.

In the eighth case, Somalia, the milk marketing system was established by local women without outside involvement. Like Tiviski, they have a built-in commitment to making the chain function. Outsiders have tried to improve the marketing system by building infrastructure and providing equipment. This had met with only limited success, however: a dairy established by outsiders operates only part-time because it is poorly integrated with the local system. Nevertheless, it is difficult to see how this admirable local system can be improved further without an injection of outside capital and expertise in appropriate ways.

Building pastoralist institutions. As mentioned above, it is particularly difficult to build viable institutions in pastoralist societies, home to many local livestock breeds. The obstacles are formidable: lack of infrastructure and communication facilities, an absence of support services, vast distances, sparse populations, limited education, restrictions on women, a mobile lifestyle, an independent existence, suspicion of outsiders.

Of course, pastoralists have their own organizational structures, often based on kinship

ties, with rules that may be unique to particular societies. The Somalia case illustrates this:

the dominant institutional structure is the clan, which restricts sales of milk. It is only the women, who are outside the clan structure, who are able to circumvent these rules and create the marketing system. We may conjecture that similar restrictions apply in other pastoralist societies. Any attempt to develop niche markets for pastoralists’ products must take these characteristics into account.

EXTERNAL INFLUENCES

We now turn to two external influences on the eight cases: culture and government policy.

–  –  –

Caste. In India, only certain castes normally keep sheep or are engaged in activities such as slaughtering and tanning.

Mobility. Many livestock keepers have a pastoralist or transhumant lifestyle because their environment requires it: to feed their animals, they must take them where the grazing is, either up a mountain, or to a patch of land where it has rained recently.

This mobility makes it difficult to organize various types of production and marketing activities.

Independence. Perhaps because of this mobility, livestock keepers are often more independent than (say) crop farmers. Unlike farmers, they have the option of moving elsewhere if they do not feel they are benefiting from an activity. Often in conflict over scarce resources, they find it difficult to cooperate with people from rival clans.

And after years of pressure from governments to settle down and grow crops, they are often justifiably suspicious of well-meaning outsiders.

Marketing efforts link communities to the outside world, so inevitably induce cultural changes. They may undermine the livestock keepers’ culture, for example by empowering women (which outsiders usually see as a positive change), trivializing traditional products in order to please tourists, opening contacts with a consumer society, or encouraging mobile herders to settle in one place.

Sometimes the changes can reinforce the local culture, for example, by increasing the awareness and pride of local people and outsiders in their cultural values (including the local breeds), empowering local people to press for their interests, encouraging them to rediscover lost skills or reviving traditional handicrafts.

But perhaps the most important effect is to enable livestock keepers to generate a reliable income, allowing them to carry on their livelihoods. They are not forced to give up livestock keeping and move to the cities in search of employment.



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