Global Livestock CRSP

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
PROBLEM STATEMENT Pastoralists are exposed to
many and increasing risks. Local systems are
under stress and increasingly unstable. Pastoralis
t welfare is declining.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Central Project Hypothesis Improved capacity to
mitigate risk and uncertainty at individual,
household, community, and regional levels will
improve the well-being of pastoral peoples and
the quality of the natural and social
environments on which they depend.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
RESEARCH DESIGN
Interdisciplinary. A mix of quantitative and
qualitative approaches quarterly surveys, case
studies, and others. Multiple scales
Individual, Household, Community, National
Temporal and cross-sectional comparisons Recordin
g behaviors as well as perceptions

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Site Selection
11 sites in the study region selected to
represent variation in Country Market
Access Ethnicity Agro-ecology

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Site Selection in Kenya

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Site Selection in Ethiopia

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

• We originally began our research effort by
  identifying the following risks
• Climate
• Market
• Insecurity
• Animal and human disease

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Strategies to Reduce Risk Exposure
Herd Accumulation Mobility Marketing Financial
Savings Social Insurance Activity
Diversification External Assistance

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Herd Accumulation Original Hypothesis
Herders traditionally self-insure through herd
accumulation.
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Herd Accumulation Research Methods

• Repeated surveys
• Oral histories of individual recovery patterns
  (species sequencing, use of market purchases,
  transfers, )

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Herd Accumulation Preliminary Findings
Best predictor of post-drought herd size is
pre-drought herd size and recovery is faster when
you start bigger accumulation is costly but
effective insurance
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Herd Accumulation Preliminary Findings
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Herd Accumulation What Lies Ahead

• Analysis of herd rebuilding and poverty dynamics
  who recovers fast and how? Who gets trapped and
  why?
• Use of species diversification and sequencing in
  herd rebuilding.
• Intrahousehold variation who loses the animals
  and who gets restocked quickly?

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
MOBILITY-Initial Hypothesis
Primary traditional means of coping with spatial
and temporal variability in forage and water
availability Increasingly impeded by -
cultivation of key terrain - violence and
instability - growth of towns - gazetting of
protected areas - localized range degradation

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
MOBILITY-Research Methods

• Repeated Surveys
• Baseline survey on past water point use and
  access restrictions
• Case studies on resource tenure and resource
  conflicts

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
MOBILITY-preliminary findings

• Mobility is primary means to maintain herd size
  (Little and Mahmoud, 2000 Little et al. in
  press Kenya Survey)

As measured by a squared TLU share index
Measured in Tropical Livestock Units (1 head of
cattle 0.7 Camel10 sheep11 goats)
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
MOBILITY-preliminary findings
Ethiopia Data

As measured by a squared TLU share index
Measured in Tropical Livestock Units (1 head of
cattle 0.7 Camel10 sheep11 goats)
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

• Household level herd size differences influence
  mobility larger herds are more mobile.
  (Little, in press McPeak, in press McPeak and
  Barrett, in press)
• This can help explain observed localized
  degradation
• This can lead to poverty traps

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Mobility What lies ahead

• Geo-referenced mobility patterns to examine how
  distance and herd size influence mobility
• Analyzing data recording access rights to key
  resources
• Case studies of changing resource access

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing- Initial Hypothesis
Little use of livestock markets in response to
shocks. Trader networks facilitate trade and
reduce transaction costs. Poor market integration
leads to low and volatile producer prices.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing- Research Methods

• Repeated Surveys.
• Study of livestock trade and trader networks.
• Analysis of GTZ livestock market data.
• Study of livestock marketing institutions.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing-preliminary findings
Livestock prices covary positively with rainfall,
so prices collapse when pastoralists most need to
sell .

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing-Preliminary findings
Quarantines affect cattle prices, creating a
distributionally regressive means of livestock
disease control.

  Source Barrett, Chabari, Bailey, Coppock and
Little (2001)
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing-Preliminary findings

Livestock price volatility in northern Kenya is
due primarily to variability in the difference
between the local producer price and the Nairobi
market price.
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing-Preliminary findings

Different groups of traders, characterized by
scale and ethnicity, have preferential access to
different markets.
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing- Preliminary findings
Table with Death rate, Sales rate, purchase rate
By site, by period

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing- Preliminary findings

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Annualized Sales Rates are High, and correspond
to Market Access

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Marketing- What lies ahead

• Effects of conflict on livestock marketing.
• Analysis of nature and effects of market power.
• Differences in incentives to pastoralists between
  auctions and dyadic markets.
• Analysis of the determinants of the pastoral
  marketing behavior.
• Potential synergies between savings institutions
  and livestock marketing.
• The influence of intra-household rights to
  animals on marketing behavior.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Financial Savings- Research Hypotheses
There is latent demand for financial
savings. Conversion of pastoral wealth through
financial savings will improve pastoral welfare
by reducing risk of asset loss. Savings will lead
to asset and income diversification.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Financial Savings-Research Methods

• Repeated Surveys
• Interviews with FSA members, non-members, and
  management.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Financial Savings-Preliminary findings
Sharon Osterloh will present findings from her
survey of micro-finance institutions in northern
Kenya. Hussein Mahmoud will mention use of
savings accounts by traders

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Financial Savings-Preliminary findings
Kenya results below. In Ethiopia, only 2 sample
households had accounts when we started, none do
now.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Financial Savings What lies ahead

• Relationship between household wealth and savings
  and credit behavior
• Analysis of institutional design
• Exploration of link between formal finance and
  income and asset diversification.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Social Support Networks Original Hypothesis

Customary transfers between households of cash,
food, and livestock help households and
individuals cope with risk. Access to these
networks varies across and within households.
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Social Support Networks Research Methods

• Repeated surveys
• Focused survey and open-ended interviews on
  intra-household property rights and transfers

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Social Support Networks Preliminary Findings

Survey evidence from the Kenyan Gabra and
Ethiopian Boran show livestock transfers are
quantitatively very small. Livestock transfers
depend on past transfer history. (McPeak 2001
Lybbert et al. 2001)
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Social Support Networks Preliminary Findings
Net cash transfers - Ethiopia
Number indicates mean amount in birr over 9 month
period

213
233
88
-371
84
-996
217
-285
-50
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Net Cash Transfers Kenya
Number above is in shillings over 9 month period

2270
761
2569
229
1071
4107
-964
-1571
-870
-203
-2216
-1262
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Social Support Networks What Lies Ahead

• Analysis of the role of inter-household livestock
  transfers in drought recovery.
• Oral histories of changing support mechanisms.
• Explore relationship between nonpastoral income
  and cash transfers, food security and restocking.
• What is the role of interhousehold food transfers
  in enhancing food security.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Activity Diversification Original Hypothesis

Asset and income diversification are key ways to
improve risk management by pastoralists.
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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Activity Diversification Research Methods

• Repeated surveys
• Focus group interviews
• Interviews with entrepreneurs

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Activity Diversification Preliminary Findings

• Much activity diversification has been ex post
  coping among the poor (push not pull).
  (Little et al. 2001).
• Those with education and/or good market access
  enjoy ex ante diversification yielding higher
  incomes.
• Women have different and worse opportunities.
• Salaries have a stabilizing effect.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Activity Diversification Preliminary Findings

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Activity Diversification What Lies Ahead

• Osterloh thesis research on the potential of
  nonpastoral activities to support households and
  financial systems.
• Identification of which types of diversification
  increase risk exposure and reduce welfare and
  which types mitigate risk and improve welfare.
• Role of activity diversification in assisting
  drought recovery.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Original Hypothesis
Pastoral populations growing increasingly
dependent on disaster relief, yet neglected by
service providers. Much previous pastoral
development assistance was misdirected.

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Research Methods

• Repeated survey
• Action research
• Extensive review of secondary literature

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Preliminary Findings
Food aid distribution ubiquitous and doled out in
equal shares. Food aid volumes are modest at
best and nonresponsive to need. Potentially
adverse effects on local range conditions (McPeak
2001) Service providers come from multiple sectors

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Preliminary Findings
Kenya

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Preliminary Findings
Ethiopia

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Preliminary Findings

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance Preliminary Findings

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project

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Consumption by site and period

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
External Assistance What Lies Ahead

• Analysis of whether interhousehold transfers get
  food to people who need it most, in spite of the
  fact that food aid is equally distributed.
• Analysis of environmental implications of food
  aid form (fuelwood and grazing).

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Preliminary Findings The Highlights

• Not always in the same boat risk is
  idiosyncratic
• Some pastoralists indeed use markets aggressively
  in response to drought.
• Income diversification widespread in Kenya, but
  not all forms are equally helpful
• Mobility, herd accumulation and salaried income
  are effective risk management strategies.
• Use of financial institutions and social support
  networks is minimal
• Few households depend on food aid

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Practical Implications
What can be done to improve pastoral risk
management? Essential short-run principle
Support, dont undermine, pastoralists
preferred means of managing risk herd
accumulation, mobility and marketing YES
restocking of viable herds, improved security,
primary education, strengthen marketing
infrastructure and institutions, find better
animal disease control measures than
quarantines NO destocking programs for
moderate-sized herds, nonresponsive food aid

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Global Livestock CRSP Pastoral Risk Management
(PARIMA) Project
Practical Implications
What can be done to improve pastoral risk
management? Longer term Invest in marketing
infrastructure and institutions to reduce price
volatility and transactions costs Develop more
effective means of distributing emergency
relief Reevaluate potential for sustainable
financial systems once market activity and income
opportunities expand Promote investment in
non-pastoral economic activities to widen the
range of desirable employment and investment
opportunities