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

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.................................................................................................................

ii

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.

iii

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 Objectives10 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

iv

LIST OF TABLES AND FIGURES

Table one18 Table two...19 Table three.20 Table four21 Figure one..12 Figure Two ....14 Chart One....16 Chart two.....22

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 1

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 SemiArid 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).

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 smallholder producers and market infrastructures will potentially increased the welfare of 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 3

Somaliland economy is mainly based on range animals 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 4

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 consumers 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).

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

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). Droughtconflict relationships are complex but may be tracedwithin 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 alAdha celebrated after the Hajj. Thus, changes in livestock prices are largely supply driven.5 Market 7

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 (ECFAO,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 cames 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
8

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

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 10

Hargeisa is the capital city of the republic of Somaliland, Hargeisa is located Northwest of Somaliland (latitude 9o18N longitude 44o03E). 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 citys 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.

11

MAP OF SOMALILAND Hargeisa study area

STUDY AREA

Figure 1

2.1.2DataCollectionprocesses
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

12

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. 13

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.

14

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 prot.

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.

15

Exporters Exporters are traders who act as the nal 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 3.1.3Livestockgrade: Livestock grades exists in Hargeisa livestock market as three point grading system for smallruminants 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.

16

This information provides an important starting point with regard to formalising these informal grading systems and determines the price of different animals 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.

17

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.

18

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

19

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) 20

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

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

Table four

21

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

22

Sheep grade one

Goat grade one

Camel Grade one

Cattle Grade one

23

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 ow 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 specications 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 24

descriptions to get what they need. In that case the information ows but in a transformed state, hence specic 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 specic 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 scientic 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 specic 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 dening 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; uctuations 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

25

payments, low selling prices, lack of recognized certication, seasonal uctuations 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 smallholders 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. 26

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.

27

REFERENCES: I.
AU-IBAR and NEPDP 2006 Somaliland Livestock Sector study: An analysis of pastoral livestock products market value chains and potential markets of live animal and prices 216 pp. I. Baldwin, R. and Schleyer, M. Biodiversity of the Northern Somali Coast East of Berbera, IUCN, Nairobi, March 1999. II. Bradbury 1997; UNDP & UNHCR, 1999. Bradbury, M. Hostility and Hospitality: The Pastoral Dimensions of the Somali Civil Conflict (unpublished draft) September 1996. III. Binswanger and McIntire 1987, Swinton 1988, Bromley and Chavas 1989, Fafchamps et al. 1997. IV. Brass, Jennifer (2007), the Political Economy of Livestock Policy: The Case of Djibouti, IGAD LPI Working Paper No. 01-08. Devereux, Stephen (2006) V. VI. Bailey et al, 1999; Umar and Blouch 2007: the marketing system of Somaliland. Bradbury, M. The Pastoral Dimensions of the Somali Civil Conflict (unpublished draft) September 1996. DFID, Pastoral Livelihoods: Programme Appraisal (draft final report), DFID, Nairobi, 2000 Drysdale, J. Mini-Research on Somaliland`s Economy 1997 VII. Bertolli, L., Emerging Opportunities to Develop the Processing and Manufacturing Industry with the Private Sector in the Somaliland Republic. UNDP, Nairobi, 2000. VIII. Chen, K, M. Ali, M. Veeman, J. Unterschultz, and T. Le. 2002. Choice-Based Sample. Journal of Agricultural and Applied Economics 34: 67-79 IX. Drysdale J. Stoics without Pillows: A way forward for the Somaliland, Han, London, 2000, Stockbridge, M. 2004. The Marketing System for Livestock Exports: Monitoring and Analysis. X. Dercon & Hoddinott 2004, McPeak & Barrett 2010, Mogues 2011 in livestock price fluctuation in different seasons in Somaliland. XI. XII. EC, FAO, 1995 and John Drydale 1997.report about Somaliland livestock marketing. FSAU, 2006; little 2001d; little et al., 2001little and mahmoud, 2005; mahmoud2001; shank, 1997; Teka and Azeza, 2002; 2002;Teka et al., 1999. XIII. FAO,world Bank and the European Union, 2004; little,2005;little,2003;little, 1996;Holleman,2002;Steffen et al.,1998 EU, 1996;EC_ FA,1995; Stockton, 1997. 28

XIV.

Government of Somaliland, Customs Statistical & General Information Report, Ministry of Finance, Hargeisa, 2000.

XV.

Government of Somaliland. Two-year plan 1997-99. Ministry of Planning Hargeysa, 1998, 1999.

XVI.

Government of Somaliland, Somaliland in Figures (Second Edition), Ministry of Agriculture of Somaliland, 2001.

XVII.

Government of Somaliland National Agricultural Policy, Ministry of Agriculture, Hargeisa 1998.

XVIII.

XIX.

Gees, Mohamed Said Mohamed and Hammond, Laura. Beyond Quick Fixes: Policy Formulation in Post-War, Post-Relief Somaliland. Hargeisa: Ministry of National Planning and Co-ordination, 1998. Knips, Vivien. 2004. Review of the Livestock Sector in the Horn of Africa (IGAD Countries). Livestock Sector Report, Horn of Africa. Livestock Information, Sector Analysis and Policy Branch (AGAL). Rome, Italy: Food and Agriculture Organization of the United Nations (FAO).

XX.

Konczacki (1978); Sanford (1983); Livingstone (1991); Little (1992); Franken (1982); Toulmin (1994); Coppock (1994); Fafchamps, Udry, and Czukas (1998)).

XXI.

Konczacki (1978); Njiru (1983); Livingstone (1986); little (1992); Holtzman and Kulibaba (1994).

XXII.

Little, P.D. 2006. Working across borders: Methodological and policy challenges of cross- border livestock trade in the Horn of Africa. In: J. McPeak and P. Little (editors) Pastoral Livestock Marketing in East Africa.

XXIII.

Little, P. (2009), Hidden Value on the Hoof: Cross-border Livestock Trade in Eastern Africa, Policy Brief, COMESA.

XXIV.

Ministry of livestock of Somaliland. 2006. Draft National Livestock Policy, 20062016.For further details on the composition of these diverse species, see (Schleyer, Baldwin, 1999).

XXV.

Samatar, Abdi Ismail The State and Rural Transformation in Northern Somalia 18841986, University of Wisconsin Press, Wisconsin, 1998.

XXVI.

Somaliland Centre for Peace and Development (1999), for livestock production and pastoral development.

29

XXVII.

Steffen P., Shirwa A. H., Addou S.I. 1998. The Livestock Embargo by Saudi Arabia: A Report on the Economic, Financial, and Social Impact on Somaliland and Somaliland.

XXVIII.

Stockbridge, M 2004. The Marketing System for Livestock Exports: Monitoring and Analysis. Consultancy Report on Livestock Marketing Survey in Somaliland. Terra Nuova, Nairobi, Kenya.

XXIX.

Stockton, G. 1987. The Case for the Development of the Private Livestock Export Infrastructure in Somaliland

XXX.

TN (Terra Nuova), 2006. Relationship between Age, Grade and Price of Animals in selected Markets in Somaliland.

XXXI.

Teka and Azeza, 2002; Teka et al, 1999; Andargachew K. and Broken R.F.2003, Sector in the West Regions of Somaliland,

30

Annex One
ResearchQuestions

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 ,traders 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 _______________ # goats # _______________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

31

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 animals 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)

32

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

33