Opportunities to Strengthen the Marketing of Red Meat in Afghanistan

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Opportunities to Strengthen the Marketing of Red
Meat in Afghanistan

• Euan Thomson, Independent Consultant and Macaulay
  Institute, Aberdeen, UK
• Philippe Chabot, Mercy Corps, Kabul
• Iain Wright, Macaulay Institute, Aberdeen, UK

2
Estimated sales and consumption of meat in
1976/77 in Afghanistan
Sources of data 1Hakimi (1976).
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Estimated sales and consumption of meat in
1976/77 and 2005 in Afghanistan
Sources of data 1Hakimi (1976) 2Data compiled
by Chabot (unpublished). 3NRVA (2004) surveys
show a value of 1.9 kg.
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In 2005 the value of meat consumed in Afghanistan
approached US0.5 billion
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Future prospects for meat sector

• Growth of GDP in 2002 was 29, in 2004 16 and in
  2004 10??
• Meat has high income elasticity of demand,
  possibly 1 to 2 or higher
• Producers could fatten sheep and earn between 23
  and 70 per sheep sold, after paying feed costs.
• As sheep numbers recover retail value of mutton
  could grow from 135 million in 2005 to between
  200 and 250 by 2010

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Forecast of the value of the sheep market
by 2010, assuming a 10 annual growth in GDP
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An efficient marketing chain

• Can help producers receive fair share of retail
  price
• Reduces transaction costs, particularly informal
  costs
• Helps ensure consumer offered a quality product
  at affordable prices

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Efficiency of a marketing chain a conceptual
issue
Pc
FP2 FP1
Market cost functions
Consumer price (retail price)
Farm-level price
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Reducing transaction costs in order to increase
returns to producers
Market fees 0.2 Storage 1 - 3 Transportation
3 - 5 Trader margin 7 Informal payments 10 - 25
Sales price for medium sheep 95
Farm-level price 79 - 83
Farm-level price 55 - 74
With informal payments
Without informal payments
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Market information systems (MIS) contribute to
efficient marketing chains

• MIS help
• Producers take decisions about where and when to
  sell animals and thereby increase returns
• Help ensure that prices offered are fair

Credit Solidarites, Yakawlang District
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MIS have limitations

• Even though mobile phone network is spreading in
  Afghanistan, traders will still better informed
  than producers
• Often producers have no choice about what, where
  and when to sell
• Prices announced need be current

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MIS some problems to overcome

• Who is responsible for collecting / disseminating
  price information?
• A private agency or the MAAHF?
• Who will pay the cost of the MIS? Should a small
  levy be charged for each animal sold?
• Where is the information displayed?
• How often is it updated?
• Should new criteria be introduced when
  determining price (live weight, finish of animal,
  age, sex)?

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Fattening and finishing livestock as an income
generating activity

• Surveys showed that some farmers already earning
  23 to 70 from fattening lambs
• Other farmers would fattening lambs if start-up
  credit available

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Intensive lamb fattening in Syria(photo courtesy
of IFAD)
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Encourage sheep fattening and finishing in
Afghanistan (1)

• Give producers the option to exploit the income
  generating potential of their animals
• Promote pilot studies at backyard and in
  small-scale units (30 100 head)
• Fatten a range of ages (lambs, 2-year olds, cast
  ewes)

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Encourage sheep fattening and finishing in
Afghanistan (2)

• Identify breeds with greatest potential for
  growth and fattening (!)
• Need credit to help get units started
• Supply of animals good but is there enough feed?
• Establish small private feed enterprises.
• Promote weighing of animals at sale

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Some topics for discussion that could provide
basis for project activities

• Building capacity in MAAHF to provide policy
  oversight and regulation of the meat marketing
  sector
• Review and if needed revise current policies
  regarding meat marketing
• Disseminate to producers, traders and
  transporters regulations concerning legal charges
  levied by customs and market operators
• Promote backyard and private sector-based sheep
  fattening operations
• Implement first phase of a MIS such as posting
  prices at major livestock markets and VFUs