MINISTRYOFFINANCEANDECONOMICDEVELOPMENT

AND
MINISTRYOFAGRICULTURE

AREVIEWTOIMPROVEESTIMATIONOFLIVESTOCK
CONTRIBUTIONTOTHENATIONALGDP

AUTHORS

Mr. Fitaweke Metaferia, Chairperson, Ministry of Finance and Economic Development,

Dr. Thomas Cherenet, Secretary, Ministry of Agriculture,

Dr. Ayele Gelan, Member, International Livestock Research Institute (ILRI),

Dr. Fisseha Abnet, Member, Ethiopian Veterinary Association (EVA),

Mr. Agajie Tesfay, Member, Ethiopian Institute of Agricultural Research (EIAR),

Mr. Jemal Abdi Ali, Member, Central Statistical Agency (CSA),

Mr. Wondessen Gulilat from Pastoralist Forum Ethiopia (PFA).

December2011,AddisAbaba

ACKNOWLEDGMENT
The Inter-Governmental Authority on Developments Livestock Policy Initiative (IGAD LPI) has
produced a series of working papers on the contribution of livestock to the national economy in IGAD
member states, including Ethiopia. The purpose of these papers is to support Livestock Policy Hubs to
advocate for representation of livestock in national strategy documents to be commensurate with its
contribution to economic growth, poverty reduction and food security. In Ethiopia, the findings of the
studies led to the establishment of a taskforce with a view to recommending changes, where
appropriate, in the calculation of livestocks contribution to GDP.
This work was made possible through the continuous and significant effort of members of the
taskforce drawn from a number of organisations. We would therefore like to thank Mr. Fitaweke
Metaferia from the Ministry of Finance and Economic Development, Dr. Thomas Cherenet, from
Ministry of Agriculture, Dr. Fisseha Abnet from Ethiopian Veterinary Association (EVA), Dr. Ayele
Gelan from International Livestock Research Institute (ILRI), Mr. Agajie Tesfay from Ethiopian
Institute of Agricultural Research (EIAR)-Holetta, Mr. Jemal Abdi Ali, from Central Statistical Agency
(CSA), and Mr. Wondessen Gulilat from Pastoralist Forum Ethiopia (PFA) for their dedication,
expertise and time.

IGAD Livestock Policy Initiative

December 2011

Disclaimer
The designations employed and the presentation of material in this publication do not imply the
expression of any opinion whatsoever on the part of either the Food and Agriculture Organization of
the United Nations or the Inter-Governmental Authority on Development.
The opinions expressed in this paper are solely those of the authors and do not constitute in any way
the position of the FAO, IGAD or the Livestock Policy Initiative.

ACRONYMS

COFOG

ClassificationofFunctionsofGovernment

COICOP

ClassificationofIndividualConsumptionaccordingtoPurpose)

CSA

CentralStatisticsAgency

EIAR

EthiopianInstituteofAgriculturalResearch

ESNA

EthiopianSystemofNationalAccounts

EVA

EthiopianVeterinaryAssociation

GDP

Grossdomesticproduct

GVA

GrossValueAdded

GVO

GrossValueofOutput

GVP

GrossValueofProduction

IC

Intermediateconsumption+

IGAD

InterGovernmentalAuthorityonDevelopment

ILCA

InternationalLivestockCentreforAfrica

ILRI

InternationalLivestockResearchInstitute

ISIC

InternationalStandardIndustrialClassification

LDMPS

LivestockDevelopmentMasterPlanStudy

LPI

LivestockPolicyInitiative

MOA

MinistryofAgriculture

MOFED

MinistryofFinanceandEconomicDevelopment

NAIC

NationalArtificialInseminationCentre

NAD

NationalAccountsDirectorate

NAS

NationalAccountsStatistics

PADS

PastoralAreasDevelopmentStudy

PFA

PastoralistForumEthiopia

SNA

SystemofNationalAccounts

TDMI

TotalDryMatterIntake

TLU

TropicalLivestockUnit

VA

ValueAdded

TableofContents
1. INTRODUCTION...................................................................................................................................5
2. CONCEPTUALFRAMEWORKFORESTIMATINGLIVESTOCKSECTORGDP...................................7
2.1

OVERVIEW...................................................................................................................................7

2.2

THEONEINDUSTRYCASE..........................................................................................................8

2.3

THETHREEINDUSTRIESCASE................................................................................................10

3. ECONOMICACCOUNTSFORLIVESTOCKSECTOR..........................................................................14
3.1

ESTIMATIONOFGROSSOUTPUTOFLIVESTOCKSECTOR...................................................14

3.2

LIVESTOCKSTATISTICS...........................................................................................................15

3.3

TYPESOFLIVESTOCKPRODUCTS...........................................................................................17

3.4

ESTIMATESOFGROSSOUTPUTBYCATEGORIESOFLIVESTOCKPRODUCTS...................19

3.4.1

OFFTAKEOFLIVEANIMALS...........................................................................................20

3.4.2

MILKOUTPUT....................................................................................................................22

3.4.3

POULTRYPRODUCTION...................................................................................................24

3.4.4

HONEYPRODUCTION.......................................................................................................25

3.4.5

OXENDRAFTPOWER.......................................................................................................26

3.4.6

TRANSPORTATIONANDDRAFTSERVICESOFEQUINES..............................................27

3.4.7

DUNGPRODUCTION.........................................................................................................29

3.5

ESTIMATESOFCOSTSOFINTERMEDIATEINPUTSINLIVESTOCKPRODUCTION............30

3.6

ESTIMATESOFLIVESTOCKGROSSDOMESTOCLIVESTOCKPRODUCT..............................32

4. CONCLUSION.....................................................................................................................................34
5. KEYFINDINGSANDRECOMMENDATIONS.....................................................................................36

ListofTables

Table
Table1:
Table2:
Table3:
Table4:
Table5:
Table6:
Table7:
Table8:
Table9:
Table10:
Table11:
Table12:
Table13:
Table14
Table15

Title
A One Industry Matrix Representation For Value Added Estimation In
AnEconomy
A Three Sector InterSectoral Matrix Representation For GVA In
Agriculture
LivestockPopulationStatistics(20042010)
AverageHerdSizeForYears2008To2010 (InThousands)
LivestockTypeByProductMatrix
EstimatesOfGrossValueOfLiveAnimals(2009)
EstimatesOfGrossValueMilkProduction(2009)
EstimatesOfGrossValueOfPoultryAndEggProduction
EstimatesOfGrossValueOfHoneyProduction
EstimatesOfGrossValuesOfOxenTractionPower
EstimatesOfGrossValueOfServicesOfEquines
EstimatesOfGrossValueOfDungProduced
EstimatesOfTotalFeedCosts
EstimationOfHealthRelatedCostsForAnimalsForTheYear2009/10
EstimatesOfGrossDomesticProductsRelatedToLivestockActivities

page
9
10
15
17
18
20
22
25
26
26
27
29
31
31
32

1.

INTRODUCTION

This report is prepared by a taskforce established from experts in different government and
nongovernmental organisations in Ethiopia to examine findings of a consultancy report
producedfortheLivestockPolicyInitiativeoftheIntergovernmentalAuthorityforDevelopment
(IGADLPI).Theconsultancyreportwascommissionedtostudyandsuggestimprovementsto
existing method of estimating contribution of the livestock sector to the national GDP of
Ethiopia. The consultancy report was produced in two separate volumes (Behnke 2010 and
Behnke2011).
The consultancy report recommended that a range of livestock related economic accounts
wouldneedtoberevisedandupdatetoimprovetheaccuracyinmeasuringthecontributionof
the livestock sector in the Ethiopian economy. This required adjustments to a number of
livestock productivity coefficients and derived variables that the Ministry of Finance and
EconomicDevelopmenthasbeenapplyinginestimatingsectoralandnationalGDPofEthiopia.
Therefore, IGADLPI initiated the process of forming a taskforce to gain consensus among
stakeholders to institutionally adopt such a change to the system of economic accounts.
Therefore,themainobjectiveofthetaskforcewastoscrutinizethevalidityandaccuracyofthe
consultancyreportbeforeadoptingitsrecommendations.Inordertofulfilthisobjective,the
taskforcesetouttoaccomplishthreeinterrelatedactivities.
First, it was essential to have a yardstick against which to evaluate the finding of the
consultancy report. This involved establishing a concise but comprehensive conceptual
framework which is consistent with the UN system of national accounts (SNA) a standard
methodofsystemsofnationaleconomicaccountsanditsspecificapplicationtothelivestock
sectorinmostcountriesintheworld.Additionally,itwasnecessarytosettheframeworkby
takingintoaccountEthiopiaslivestockproductionsystems.
Second, since the consultancy report necessarily involved computations of a number of sub
sets of economic accounts for different livestock types and their products, establishing the
conceptualframeworkwasonlyoneoftheinitialprerequisiteforaccomplishingthemissionof
5

the taskforce it was important to go beyond this and redo the actual task of collecting the
necessary data and then computing the estimates. In doing so, the taskforce has followed a
pragmaticapproachforgoodreasons.Tobeginwith,theenvisagedrevisionstothelivestock
sector economic accounts should not be at odds with international practices. The main
purposeofrevisingthefiguresistoimprovethesystemofeconomicaccountsandtheexisting
coefficientswhichcaptureproductivityofthecountriesassets,thelivestock,inarealisticand
practical way. If the revisions were conducted by arbitrarily imposing strong assumptions
rootedinuntestedtheoreticalviewpoints,thenthecountriessystemofeconomicaccountscan
easilygetrenderedincomparablewiththoseforothercountries.Similarly,thelivestocksector
accountscaneasilygetoutoflinewiththesystemofaccountsfortherestofthesectorsinthe
economy.
Third, the findings of the taskforce study were then compared with key findings and
recommendationsidentifiedintheconsultancyreport.Thisenabledthetaskforcetocomeup
withrobustsetsofrecommendationsbymakingfurtherimprovementstotheinsightsgainedin
throughtheconsultancystudy.Accordingly,thisreportispreparedprovidingdetailedaccount
byaccountcomparisonsofthefindingsintheconsultancyreportandthoseidentifiedthrough
thisstudy.
Needlesstosaythisstudyhasitsownshortcomings.Themainsourceofitslimitationliesinthe
paucityoflivestockstatistics,whichisstillatitsrudimentarystage.Inspiteofthefactthata
significant share of Ethiopias livestock are located in lowland and pastoral areas, the Central
Statistical Authority of the county has so far been confined to sedentary farming regions in
conducting censuses and sample surveys. As a result, both the consultancy study and the
taskforcestudywereobligedtostartwithincompletedataandthenrelyingonfindingofadhoc
studies to fill the existing gaps in the data. There are challenges inherent in the existing
practices of measuring economic benefits from the livestock sector. The capital nature of
livestock has always given rise to challenges in appropriately accounting for the services the
livestockprovidealthoughthisvariousfromcountrytocountry.Someofthesechallengesare
veryspecifictoEthiopiasconditionofproduction.Forinstance,farmersinEthiopiarelyheavily
6

onanimaldraftpowertoploughthelandforcropproduction.However,thereisawidegapin
ourknowledgetofullycapturethevalueofservicesthelivestocksectorprovidetothecropping
sectorbothintermsofanimaltractionandthroughmanure.Similarly,thisstudyhasnotfully
capturedthecostsofcropresiduethatprovidesagoodproportionoflivestockfeed.
Theremainingpartofthisreportisdividedintothreesections.Section2presentsaconceptual
developed in this study. Section 3 provides detailed discussions of livestock statistics;
computation methods for estimating values of gross outputs of different livestock products;
costs of livestock production; and then finally the livestock sector GDP as well as livestock
relatedGDPgeneratedbyservicesoflivestockcapitalinothersectorsoftheeconomy.Section
4providesconcludingremarksfocussingonbroadsetsmethodologicalissues.
2. CONCEPTUAL FRAMEWORK FOR ESTIMATING LIVESTOCK SECTOR GDP
2.1 OVERVIEW
We devote this section of the report to discussing the conceptual basis of estimating the
livestocksectorGDPandrelatedsystemofaccountslinkingthesectortothewidereconomy.A
conceptual framework developed for this study is based on the United Nations System of
National Accounts (UNSNA); an international standard which provide guidance for the
developmentofnationalandsectoralGDPestimations.Inanyefforttoundertakeestimations
orrevisionsofGDPatsectoralornationallevels,itisgoodpracticetostarttodiscussingand
clarifyingthebasicconcepts,definitions,andcompilationtechniquesintheUNSNA.
Basically, GDP derives from the concept of value added. Gross value added is the difference
between output and intermediate consumption. GDP is the sum of gross value added of all
residentproducerunitsplusthatpart(possiblythetotal)oftaxesonproducts,lesssubsidieson
products,thatisnotincluded in thevaluationofoutput.GDPisalsoequaltothesumofthe
final uses of goods and services (all uses except intermediate consumption) measured at
purchasersprices,lessthevalueofimportsofgoodsandservices.Finally,GDPisalsoequalto
thesumofprimaryincomesdistributedbyresidentproducerunits.(SNA,2008,2.1382.140)

Theeconomicroleofthelivestocksectorcanbeclassifiedintotwo:
(a)Intrasectoralactivitiesincludingwealthcreatedduetoeconomicactivitiesthatoccurred
withinthelivestocksector
b) Intersectoral activities linkages of the livestock sector to other industries and domestic
institutions
GDPgeneratedinthelivestocksectorcoverspaymentsforservicesofdifferentfactorpayments
in the process of producing livestock product and these transactions fall in category (a).
However,theprocessoflivestockproductioninvolvesinteractionsbetweenthelivestocksector
and the rest of the economy through sales to other industries (e.g, live animals to slaughter
houses, milk to dairy processing plants, manure to crop producers), or purchases of
intermediateinputs(e.g.,feed,hays,cropresidues,vaccines,AIservices),salestohouseholds
forfinalconsumption(e.g.,liveanimals,milk,eggs).Thesefallincategory(b)whichcaptures
themultipliereffectsofthelivestocksectoronthewidereconomy.
TheempiricalchallengeinestimatingGDPofthelivestocksectorliesinensuringthatboththe
sizes of intrasectoral and intersectoral activities would not be underestimated or
overestimated. There is an additional complexity in estimating livestock sector GDP the
capitalnatureoflivestock.
2.2 THE ONE INDUSTRY CASE
ItprovesusefultostartillustratingtheconceptofGDPbyusingahighlysimplifyingassumption
thatEthiopiahasonlyoneindustry.Inthiscase,Ethiopiassystemofnationalaccountscan
then be represented by a very simple matrix of 2 x 2 dimension (shown on the below). The
matrix representation displays information in a highly efficient and concise manner, showing
keyrelationshipsbetweendifferentpartsoftheeconomy.

Table1AOneIndustryMatrixRepresentationForValueAddedEstimationInAnEconomy

Where,

A=totalvalueofintermediate,goodsusedtoproduceothergoods

V=totalpaymentsforservicesofprimaryfactorsofproduction(land,labour,capital)
E = total value of goods consumed by institutions that can be categorised into: households,
government,organisationforgrossfixedcapitalformation,netexport(exportslessimports).
Focusing on the 2x2 matrix (Table 1) and reading down column, we collect value of different
inputsintheprocessofproduction(originsofgoods).Thetotalcostofproductionequalsgross
valueofproductionoroutput(GVO).Therefore,GVO=A+V.Nowreadingacrosstherow,
again we obtain total value of output as sum of sales by destinations total value of goods
consumed (used) in the process of production and total value of goods consumed by
institutions.Therefore,GVO=A+E.ItfollowsthatV=E.
GDPismeasuredbyfollowingeithertheproductionapproach(denotedbyVintable1)orusing
expenditureapproach(denotedbyEintable1).TheidentitythatstatesthatVequalsEimplies
thattotalpaymentsforfactorincomeintheprocessofproductionequalstotalexpenditureby
recipientsoffactorpayments.Inotherwords,ataggregateeconomywidelevel,totalincome
equaltotalexpenditure,oneofthemostimportantidentitiesinmacroeconomictheorywhich
underlie the system of national accounts. Therefore, the simple 2x2 matrix presented above
encapsulatesthemostessentialrelationshipsinvolvedinestimatingGDP.Estimatingsectoral
GDPinvolvessimplydisaggregatingthecellsinthismatrix(column1androw1)bythenumber
ofsectors.Athreeindustriescaseispresentedanddiscussedinthefollowingsection.

2.3 THE THREE INDUSTRIES CASE

Athreeindustriescaseissuitableforthepurposeofillustratingtheconceptualframeworkfor
estimating the livestock sector GDP. Table 2 below displays a system of accounts with three
sectors livestock, cropping, and the other industries. The aggregate intermediate
consumption represented by a single variable A in table 1 above is now disaggregated into a
submatrixof3x3(theintersectionsbetweenrows1to3withthecorrespondingcolumns1to
3).Thefirstandsecondsubscriptsrefertoreceivingsectorandpayingsector,respectively.For
instance,A31denotespaymentbythelivestocksectorforintermediateinputs(e.g.processed
feed) supplied by feed processors in the manufacturing sector, which is categorised under
otherindustries.
Table2AThreeSectorInterSectoralMatrixRepresentationForGVAInAgriculture

1.
Livestock

2.
Cropping

3.
Other
industries
A13

4.
5.
Consumers Total
receipts
E1
GVO1

1.Livestock

A11

A12

2.Cropping

A21

A22

A23

E2

GVO2

3.Otherindustries

A31

A32

A33

E3

GVO3

4.Factors

V1

V2

V3

GVO1

GVO2

GVO3

5.Totalpayments

Atfirstglance,thethreesectormatrix(Table2)maylookdifferentfromthehighlysimplified
smallmatrix(table1).However,thetwomatricesshowessentiallythesamesetofinformation
exceptforsectoraldimensionsandtheexplicitdisplayoftheGrossvalueofoutput(GVO)row
andcolumntable2.Eachaccountisgivenanumberwithadescription(e.g.1.Livestock)and
thevalueaddedrowhasbecomeavectorwiththreeentries,i.e.,grossvalueaddedbysectoral
origin; and the aggregate expenditure column has now three elements, i.e., expenditure by
commodityorigins.
Inthisstudy,weemploythethreeindustriesmatrixasaconceptualframeworkontheground
thatdetailsoftheremitsofthisstudyisexpectedtorevisearangeofestimatesrelatedtothe
10

livestock sector (entries in row 1 and column 1 of table 2). In this context, it is important to
guardagainsttheperceptionthatthewholeexercisewouldbetoestimatejustlivestockGDP
which would deal only with the contribution of the livestock sector to Ethiopias GDP. This
wouldessentiallymeanfocusingononlyoneentryinthatmatrixV1.Thisisarathernarrow
perspectivesoitwouldproveusefultoexplicitlyrecognizethatthewiderroleofthelivestock
sectororthecontributionofthelivestocksectortotheEthiopianEconomy.
Table2providesaframeworkanddetailsofseparateentriesthatwehavetargetedtorevise.It
isusefultobearinmindthatthesystemofnationalaccounts(SNA)approach,sectionsrelated
tothemeasurementofproductionpages127to156andparticularlysection6.41(a)(f)).In
this regard, the key point is that marketed as well as nonmarketed outputs need to be
accounted for in estimating sectoral GDP and GVO. Therefore, we set out to accomplish its
duties by resolving this conceptual issue. In the next few paragraphs, entries in row 1 and
column1arediscussedindetail:
GrossValueofOutput(GVO1):Theprimarytasktoaccomplishwastogatherdataonlivestock
statistics; apply suitable rates and coefficients; and obtain total output of livestock products.
The rates and coefficients are related to direct and indirect methods of measuring livestock
productivity.Forinstance,inordertoestimatetotalvalueofmilkoutputitwasnecessaryto
gatherthefollowingfacts:totalnumberofcattle,proportionofcowsintotalherd,proportion
ofcowsgivingmilkfromtotalcows,andmilkyieldpercowperyear.Ifweapplytheseratios,
thenweobtaintotalvolumeofmilkproducedfromthecows.Sincemilkisalsoobtainedfrom
goats and camels, it is necessary to apply similar methods to obtain milk from the other
livestockcategoriesaswellasotherlivestockproducts(e.g.cattlesalesthroughofftakerates,
etc).SinceGDPisaflowconceptwhichinvolvesaggregationofvaluesofdifferentproducts
produced during a particular year, then it is necessary to select a base year for which the
livestockGDPandrelatedvariableswouldbeestimated.
GrossDomesticProductorGDP(V1):ThisisthelivestocksectorGDPperseanditisrelatedto
valueaddedintheprocessoflivestockproduction.Thisconsistsofactualorimputedestimates
of labour time and hence compensation for labour devoted to the livestock sector; capital
11

rental values (e.g. housing services for livestock, fencing, etc); and land rent. Given data
paucity, it is important to triangulate the estimation of this figure, an extremely important
figureofallelements.Forinstance,itisrelativelymorestraightforwardtoestimatetheGVO.It
isthenpossibleapplyratioestimatesfortechnicalcoefficientsofintermediateelements(A11,
A21,A31)andthenfinallyobtainV1asadifference(V1=GVO1(A11+A21+A31).
Intermediateinputspurchases(A31):Theseareintermediateinputspurchasedbythelivestock
sectors from nonagricultural sectors. Since these inputs are mostly purchased at market
prices,reasonableestimatescanbeobtainedfromdifferentsources.
Imputed Value of Crop Residue (A21): This entry denotes actual or imputed values of
intermediateinputsforlivestockproductionthataresuppliedbythecroppingsector(e.g.crop
residue).Itisnecessarytoaccountforthis,evenifthatwouldmeanreplyingmostlyonother
countryexperiences.
Livestock Products used in the Livestock Sector as Intermediate Inputs (A11): This is highly
relevantestimatebutrarelyaccountedforinlivestockproductioninthecontextofdeveloping
countries.Forinstance,totalmilkproducedincludesmilkusedbycalveswhichisrelevantsince
economicsoflivestockproductioninvolvescalculationofenergyintake,milkyield,etc.
Livestock Products used in the Cropping Sector as Intermediate Inputs (A12): This consists of
importantestimatessuchasactualorimputedsalesvalueofmanureusedtoimprovefertility
ofsoilforthecropproductionsector.
LivestockProductsused in the nonagricultural sectoras IntermediateInputs(A13): A rangeof
estimatesareincludedinthisvariablevalueoflivelivestock(cattle,smallruminants,poultry)
sold to slaughtering houses or directly to hotels; dairy products sold to dairy processing
enterprises;valueofhoneysoldtofoodprocessingindustries.
Livestock Products Sold To Institutions (E1): This incorporates sales of livestock products to
domestic and nondomestic institutions sales for final consumption to households and the
governmentsector(e.g.rawmilkdirectlysoldtohouseholdsorliveanimalssoldtohousehold
12

for informal slaughtering); sales to domestic industries for gross fixed capital formation (e.g.
breedingstocks);andexportsoflivestockproducts,includingliveanimals(e.g.,exportsoflive
cattleorsmallruminantstothemiddleeast).
The Controversial Case of Hides and Skins: The sources of supply for hides and skins can be
classifiedintothefollowingfourcategories

slaughterhousesfarmerssellliveanimaltotraderswhoultimatelyselltoslaughterhouses
locatedintownsorcities(A13)

ruralhouseholdsslaughteranimalsonfarmforownconsumptioneitherslaughteringown
livestockorlivestockpurchasedbyruralhouseholdsfromotherruralhouseholdsortraders
(E1)

urbanhouseholdsliveanimalssoldtotraderswhoultimatelyselltohouseholdslocatedin
townsorcities(E1)

Thesaleofhidesandskinsbyslaughterhouses(case(a))isclearlynonlivestock.Thereasonis
that the international standard industrial classification slaughtering is classified in the 10th
divisionofmanufacturing(A13).Thissubdivisionsellsthebyproducttotanneries,leather,or
salestoexporters,etc.Whichmeansthisisaclearcasewherethelivestockindustrywillbeout
of the picture as soon as the sale takes place and the live animal changes hand. Even in all
othercases,(b)and(c),itisextremelydifficultbothconceptuallyandempiricallytoattribute
hides and skins to the livestock sector. The livestock sector is a primary activity, so post
processing livestock products cannot be classified as primary Hides and skins are partially
processed products. So, hides and skins are inevitably and legitimately belong to
manufacturing,byvirtueofbeingpartiallyprocessedinthe(i)formalsector,whenanimalsare
slaughteredinknownabattoirs;(ii)informalsector,whenhouseholdsandtheircompoundsare
usedassometemporaryslaughterhouses.Inthelatercase,thehouseholdsectorwouldactas
producers of outputs, which are sold to tanneries, leather industries, and exporters pretty
much like sales by abattoirs. We can safely leave aside pursuing hides and skins because this
represents interactions within the manufacturing sector or the manufacturing sector and the
finaldemandsectors.
13

Rentalvalueoflivestockcapital(V1,V2):IntableA1.2,entriesinthevalueaddedrow(V1,V2,V3)
aresumofpaymentsforservicesofallfactorsofproductioncompensationforlabour(ownor
employed); property rents (buildings, land); nonlivestock capital (rents of machineries or
interest payments); and livestock capital. However, there are substantial variations in the
proportionsinwhichthefactorsarecombinedindifferentsectors.Oxendraftpower,whichis
included in V2, are relevant to only the cropping sector and it remains as part of crop sector
GDPbutitshouldbeestimatedseparatelytorecognisetheservicesofthelivestocksectorto
other sectors in the economy (intersectoral linkage effect). Similarly, services ofdairy cows,
includedinV1,areasimportantasoxendraftpower.Whileoxendraftpowerisintersectoral
roleoflivestockcapital,servicesofcowsinproducingmilkisanintrasectoralroleofthecapital
valueoflivestock.Oxenareusedtoproducecrops,butcowsareusedtoproducemilk.These
twocapitalservicesneedtobeexplicitlyestimated.
3. ECONOMIC ACCOUNTS FOR LIVESTOCK SECTOR
3.1 ESTIMATION OF GROSS OUTPUT OF LIVESTOCK SECTOR
Itisessentialtoobtaindataonlivestocknumbersbytypeoflivestocktoestimategrossvalueof
livestock production and then gross value addition that is likely to have taken place in the
livestocksubsectorofagriculture.Inotherwords,establishingtheherdsize,stocksorassets
is a prerequisite for estimating the economic size of the sector, flows, from the livestock
sector. The relationship between stocks and flows is mediated by estimates on the current
levelofproductivityinthesector.
Inthisstudy,theestimatesofeconomicaccountsforthelivestocksectorcoverscattle;sheep;
goats; camels;poultry; equines(horses,mulesanddonkeys); andbeecolonies(beehives). In
this section, we start by examining herd sizes and logically progress to estimating economic
activitiesassociatedwiththelivestocksector.

14

3.2 LIVESTOCK STATISTICS

Table3belowdisplaysEthiopiaslivestockstatisticsfrom2004to2010.Thetableisdividedinto
two subsections, the upper part showing livestock numbers in thousands for eight livestock
types while the lower part shows annual growth rates of the corresponding categories of
livestocktypesduringtheperiod.Thecattlepopulationhavegrownfrom38millionin2004to
51millionin2010.
Table3LivestockPopulationStatistics(20042010)
Numbers(000)
2004
2005
Cattle
38,103 38,749
Sheep
16,575 18,075
Goat
13,835 14,859
Camel
471
459
Poultry
35,656 22,605
Horse
1,447
1,518
Donkey
3,770
3,930
Mule
321
318

Beehives
4,546

%Annualchanges

Cattle
1.7

Sheep
9.0

Goat
7.4

Camel
2.7

Poultry
36.6

Horse
4.9

Donkey
4.3

Mule
1.1

Beehives
11.6
Source:CentralStatisticalAuthority

2006
40,380
20,734
16,364
438
32,222
1,569
4,289
341
4,020

2007
43,125
23,633
18,560
616
34,199
1,655
4,498
326
4,884

4.2
14.7
10.1
4.6
42.5
3.4
9.1
7.2
21.5

2008
47,571
26,117
21,709
1,009
39,564
1,776
5,573
377
4,800

6.8
14.0
13.4
40.9
6.1
5.5
4.9
4.4
1.7

2009
49,298
25,017
21,884
760
38,128
1,787
5,422
374
4,600

10.3
10.5
17.0
63.7
15.7
7.3
23.9
15.7
4.2

2010
50,884
25,980
21,961
808
42,053
1,995
5,715
366
4,598

3.6
4.2
0.8
24.7
3.6
0.6
2.7
0.8
0.0

3.2
3.8
0.3
6.3
10.3
11.6
5.4
2.1
na

Similarly, the total number of shoats (sheep plus goats) has increased from 29 million to 47
million during the period. While the number of camels nearly doubled, the size of poultry
populationincreasedonlybyarelativelysmalleramountarisefrom36millionto42million.
Similarly,theincreaseinthenumberofequineshavefollowedsimilarpatternofgrowthasthat

15

ofcamels.Thenumberofbeecoloniesorbeehiveshasincreasedonlymarginallyduringthe
period.
Althoughtable3showslivestockstatisticsforsevenyears,itisimportanttofocusononeyear
toestimatetheinterconnectedeconomicaccountsforthelivestocksector(showninTable2,in
theprecedingsection).Inordertochoosethebaselineyear,itwasnecessarytoexaminethe
patterns of changes over the seven years period. The annual growth rate of the livestock
populationsisshowninthelowerpartofTable3.Thereareconsiderablylargedifferencesin
annualgrowthratesforeachlivestockcategoryacrosstheyearsaswellasbetweendifferent
livestockcategories. The substantially large variationsinannualgrowthratescouldpartlybe
explainedbydestructionsinthelivestockpopulationduetorecurrentdroughtsinsomeyears
andrecoveriesduringthesubsequentyears.
For the purpose of this study, it is useful to avoid a baseline year with sharp falls or rises in
figuresforoneormorelivestockcategory.Choosingsuchayearasabaselinewouldjeopardise
theaccuracyoftheestimatesinthecurrentestimatesaswellasfuturerevisions,becausethe
baseline estimates will be used as a yardstick in the subsequent years. For this purpose, we
have opted for taking an average of three recent year figures (20082010) to represent the
baseline livestock number for all livestock categories. Table 4 below shows such a weighted
averagefigurewhichwillbeutilisedforderivingeconomicaccountsforthesectorbyapplying
appropriateproductivityestimates.
Although we have smoothen the data by averaging over large annual variations, it was
necessary to explore further and see if the weighted average figures were good enough to
considered as baseline data for establishing the foundation for aggregate economic accounts
on the livestock sector of the country. To this effect, we have compared the figures under
weighted averages (20082010) were compared with other data sources. Adjusted figures
whichareusedforfurthercomputationsarepresentedinthecolumnlabelledadjustedfigures
2009,andthepercentagedeviationofthiscolumnfromtheCSAdataispresentedinthelast
columnoftable4.Forthisadjustment,wehavereliedonFAOdatabase,Behnke(2010),and

16

Demeke (2008). The adjusted figure for cattle population was obtained from FAO statistical
database,itis3.2%greaterthanCSAdata.
Table4AverageHerdSizeForYears2008To2010(InThousands)

2008

2009

2010

Cattle
Sheep
Goat
Camel
Chicken

47,571
26,117
21,709
1,009
39,564

49,298
25,017
21,884
760
38,128

50,884
25,980
21,961
808
42,053

Weighted
Average
(20082010)
49,288
25,714
21,852
873
39,981

Horse
Donkey
Mule
Beehives

1,776
5,573
377

1,787
1,995
5,422
5,715
374
366
4,600 4,598

1,858
5,573
372
4,599

Adjusted
%
figures adjustment

2009
50,884
3.2
35,866
39.5
34,684
58.7
2,400
174.9
42,100
5.3
1,858
5,573
372
4,599

0.0
0.0
0.0
0.0

Behnke (2010) have undertaken athoroughreview of theliterature to establish thefact that

the CSA data hugely underestimates the small ruminant population. Accordingly, we have
optedtouseBehnkesestimatesonsheepandgoatpopulation,whichis40%and59%higher
than the CSA estimates. The FAO statistical database and Behnkes estimate provide a
considerably larger camel population, 175% higher than the CSA data. The main reason for
which the CSA data consistently underestimates the livestock population figures is that CSA
surveyshavebeenconfinedtosedentaryfarmingzones,excludingpastoralareas.Thisisclear,
for instance, from the huge underestimations of camel and small ruminants. Demeke (2008)
providedpoultrypopulationwhichisslightlyhigherthantheestimatesobtainedfromtheCSA
data.
3.3 TYPES OF LIVESTOCK PRODUCTS
Intheconceptualframeworkdiscussed in section2,grossoutputoflivestock activities(GVO)
was presented as a highly aggregated variable, consisting of a range of livestock products.
These are displayed in Table 5, which shows a matrix of nine livestock types by six livestock
product.
17

Table5LivestockTypeByProductMatrix

Cattle
Sheep
Goat
Camel
Poultry
Horse
Donkey
Mule
Beehives

Offtakes
orlive
sales
L
L
L
L
L

Milk

Egg

Rental
incomes

Honey

manure

L
L

Inthematrix,theintersectionsbetweenrowandcolumnheadingsindicatewhetherornotthe
livestocktypeproducesthattypeoflivestockproduct,withlettersrepresentingexistenceand
emptycellsdenotingnonexistenceofaproductforthatcombination.Forinstance,thereare
onlyonerelevantproductforsheepofftakesorlivesalesorslaughtering.However,cattle
is a multipurpose livestock type that supports livelihoods of farmers by generating income
fromliveanimalsales,milksalesorconsumption,rentalincomesfromdraftpowerandmanure
useorsales.
In section 2 of this report we have discussed that it is not appropriate to classify all outputs
generatedbythedifferentlivestocktypesaslivestocksectoroutput.InTable2,theletter
L denotes livestock products that can be classified under the gross output value in the
livestocksectorwhileOrepresentslivestockservicesthatenabledgenerationofgrossoutput
ofotheragriculturalsectorsornonagriculturalsectors.
Forinstance,milkproducedbydifferentlivestocktypesconstitutespartoftotalgrossoutputof
livestock economic activity. However, while O under rental income and against cattle
denotes oxen draft power service which constitutes gross value of output in the cropping
subsectorofagriculture,butOagainstcamels,horses,muleanddonkeysdenotesgrossvalue
ofoutputinthetransportsector,anonagriculturalsectorwhichpartlyreliesonanimalpower
to provide transportation services. In the context of draft power, it should be noted that
18

owners of the draft animals receive payments for the rental services of their assets which is
utilisedinothersectors.Inmostcases,theservicescouldbeprovidedwithinafarm,butitis
essentialtomakethesedistinctionsinestimatingeconomicaccountssincedifferenteconomic
activitiesofamixedfarmerisaccountedforindifferentagriculturalsubsectorse.g.livestock
andcroppingsubsectorsofagriculture.
InprinciplethereshouldbesomeoutputofmanurefromalllivestocktypesbuttheEthiopian
nationaleconomicaccountshavetraditionallyconsideredonlydungorbakedanddriedcattle
manurewhichismostlyusedforfuel.Accordingly,duetopaucityofinformationonmanureuse
andsaleswetakeintoaccountonlyestimatedvalueofcattlemanureusedforpreparingdung.
The most important point to bear in mind is that a typical livestock type produces multiple
outputs.Forinstance,thecattleofftakesrepresentstheproportionofanimalssoldinthat
year,eitherslaughteredbyhouseholds(e.g.duringfestiveseasons),atslaughterhousesondaily
basistobedistributedtobutchersorhotels,orexportedasliveanimalstoforeignmarkets.In
themeantime,dependingonconceptionandcalvingrates,thematurefemalecattleyieldmilk
and this represents total milk production which multiplied by milk price per litre gives total
valueofmilkduringthatyear.Similarly,someproportionofmaturemalesisusedasoxento
plough crop fields, providing services to the crop sector. This rentalvalue of oxen generates
incomefor livestockkeeping households (as institutions) but this figure is registered as value
addedinthecroppingsectorsinceitisgeneratedinthateconomicactivity.
3.4 ESTIMATES OF GROSS OUTPUT BY CATEGORIES OF LIVESTOCK
PRODUCTS
In the subsections below, we discuss estimates of different livestock products the six
different categories presented as column headings in Table 5: live sales, milk output, egg
output,rentalservices,honeyoutput,anddung.Wetakeeachofthelivestockoutputsinturn
andpresenttheestimates.ItshouldbenotedthatthesumofallentrieslabelledasLintable
5aboveyieldgrossoutputoflivestockproductionwhichisdenotedbyGVO1intheconceptual
frameworkdiscussedearlierinthecontextofTable1.Ontheotherhand,entrieslabelledas
Orepresentgrossvalueaddedinothersectors.Specifically,rentalservicesofoxendraft
19

power (entry O at the intersection between cattle and rental services in table 5),
constitutesV2,orgrossvalueaddedinthecroppingsubsector.Similarly,rentalservicesof
transportationordraftpowerofequines(entryOattheintersectionbetweenrowheadings
of horses, donkey, mule, camels, and column headings rental services in table 5),
constitutesV3,orgrossvalueaddedinthetransportationsector(nonagriculturalsector).
3.4.1 OFF-TAKE OF LIVE ANIMALS
Table6showsdetailsofmethodsforcalculatingvalueofgrossoutputfromsaleofliveanimals
camels,cattle,goatsandsheep.Thesummaryoflivestockstatisticsforeachlivestocktypeis
takenfromtable4above.Theothervariablesinvolvedinthiscomputationareobtainedfrom
FAOstatisticaldatabase.Inadditiontolivestocknumbers,grossoutputisalsoaffectedbythe
offtakecoefficientscamel(0.04),cattle(0.07),goats(0.35)andsheep(0.33).Thecattleoff
take coefficient applied here is equal to the rate MOFED has traditionally applied but lower
than the 0.09 rate used by Behnke. However, the offtake coefficients for the other livestock
categories in this study are consistently higher than those applied by MOFED and Behnke.
WhileMOFEDandBehnkehaveusedaveragepricesofliveanimalsforalllivestockcategories,
wefounditusefultoconsistentlymeasureyieldincarcassweight,asappliedbyFAOformost
countries.
Table6EstimatesOfGrossValueOfLiveAnimals(2009)
Livestockofftakevariables
a. Livestockpopulation(000)
Camel
Cattle
Goats
Sheep
b. Offtakeratios
Camel
Cattle
Goat
Sheep
c. Yield/CarcassWeight(Hectogram/Animal)
Camel
Cattle

Valuesandcoefficients
2,400.0
50,884.0
34,684.4
35,866.3
0.04
0.07
0.35
0.33
1,200
1,083
20

Goat
85
Sheep
100
d. Production(tonnes)=(a*b*100*c)/1000
Camel
12,000
Cattle
389,880
Goat
103,371
Sheep
117,346
e. ProducerPrice(birr/tonne)
Camel
33,360
Cattle
36,079
Goat
25,218
Sheep
26,962
f. Totalvalueofproductionbyanimaltype(millionbirr) =(d
*e)/1000,000
Camel
400
Cattle
14,066
Goat
2,607
Sheep
3,164
g. Totalvalueofproductionallanimals(millionbirr)
20,237
Source:livestocknumberisobtainedfromTable4above,andtheothercoefficientsare
obtainedfromFAOstatisticaldatabase.Thecomputationsinvolvedareshownasnecessary.
Thisyieldisconvertedtomeatequivalentswhichweremultipliedbypricepertonnesofmeat
toarriveatgrossvalueofsalesofanimals.Theaggregatefigureobtainedthiswayisdisplayed
inthelastrowoftable6.Accordingly,estimateforgrossvalueofsalesofliveanimalsisgivenas
birr20,237million.Clearly,grossvalueoflivestockproductionthroughofftakesismuchhigher
thanthecorrespondingfigureestimatedbyBehnkeandMOFED,whichwerebirr12,757million
andbirr9,653millionrespectively.Themainexplanationforsuchlargedifferenceliesinthe
differencesinthewaytheofftakesarevalued.Pricinglivestockunitsbyaveragingoverallage
and sex groups can lead to considerably large divergence from the realistic prices of cattle.
However, carcass weights or even live weight based pricing follows standard conversion
factorswhichreducethelivestockunitstocommondenominator.Clearly,weknowalotmore
aboutthepriceakgoratonneofbeefthan,forexample,thepriceofcattleingeneral.

21

3.4.2 MILK OUTPUT

The procedure employed in this study to obtain gross value of milk output from different
livestocktypes(camel,cattle,andgoats)isdisplayedinTable7below.
As we have done with offtakes, we start with total livestock population. We then obtain
lactationratiosorproportionofthecorrespondinglivestocktypethatgivemilkduringtheyear.
The FAO statistical database provides lactation ratios of 0.21 for camels (which is about the
sameastheratiosusedbyMOPEDandBehnke)butitgivesunrealisticallylowlactationratios
for cattle (0.13) and goats (0.03). In this study, we opted for using lactation ratios used by
Behnke.Ontheotherhand,Behnkeappliedanextraordinarilylargelactationratioof0.6235
forgoats,whichcannotberealisticfortheEthiopiancondition.Asaresult,wehaveoptedfor
the combinations of lactation ratios MOFED has applied to different livestock categories
camel(0.20),cattle(0.22)andgoats(0.25).
Table7EstimatesOfGrossValueMilkProduction(2009)
Milkofftakevariables
Livestockpopulation(000)
Camels
Cattle
Goats
Milkanimals(ratioofstocks)
Camel
Cow
Goat
Yield(Hectogram/Animal)
Camel
Cow
Goat
Milkproduction(tonnes)
Camel
Cow
Goat
Milkproducerprice(Ethbirr)
Camel
Cow
Goat

Valuesandcoefficients

2,400.0
50,884.0
34,684.4

0.20
0.22
0.25

3,860
2,154
500

185,280
2,411,291
435,289

13,435
5,845
9,132
22

Grossvalueofmilkproducedby
animaltype(millionbirr)
Camel
Cow
Goat
Grossvalueofmilkproducedall
animals(millionbirr)

2,489
14,094
3,975
20,558

MOFEDandBehnkehavethengoneintoclassifyingmilkoutputintoliquidmilkandbutterby
applyingconversionfactors.Fortworeasons,wedidnotfollowthisapproach.First,thereisno
compellingevidencetoguidethedivisionofthevolumeofmilkintotheliquidmilkandbutter
categories. Second, even if there is enough data to guide this allocation, converting milk to
butter involves some processing essentially, butter is not a primary product, it is a derived
product.Thefactthattheprocessinghappenedonfarmdoesnotmakeitanylessimportant.
Suppose liquid milk was sold to dairy processors, who would perform the same task of
converting milk into butter, among other things. Then we would not classify this processed
product as primary livestock output. For the purpose of economic accounting, it would
sufficetoappropriatelyvaluetheprimaryoutputliquidmilkproducedatfarmlevel.
Althoughwehavevaluedonlyliquidmilkequivalent(withoutclassifyingthetotalmilkvolume
intobutterandliquidmilk),thegrossvalueofmilkoutputobtainedinthisstudy(birr20,558
million) is still higher than the correspondingfigureobtained byMOFED (birr19,471million).
However, Behnkes estimate of gross value of milk output is considerably higher than our
estimates for two reasons. First, Behnke applied unrealistically high lactation ratio for goats.
Second,andmostimportantly,Behnkeimplicitlyassumedthatalactationperiodis12months,
but this is not the case in traditional farming systems, where it is common to have 15 to 18
months lactation period. This means, the milk yield per lactation which Behnke used in the
reportwouldneedtobescaleddowntobringitinlinewithyieldperanimalperyear(notper
lactation). In other words, what is relevant for the purpose of GDP estimation is yield per
annum,notyieldperlactation.
As noted earlier, the bulk of production and producer price data used in this study was
obtained from the FAO statistical database. For Ethiopia, milk producer price per tonne is
23

availableonlyforcowmilk.However,weexploredifthiswasthecaseforotherneighbouring
countries and we found out that actually the FAO database has milk producer prices for all
livestocktype(camelmilk,cowmilk,andgoatmilk)forKenya.Therearesubstantialproducer
pricedifferencesbetweenthesemilkcategoriesinKenya,producerpricesforcamelmilkand
goatmilkbeing2.3and1.6timescowmilkpricesrespectively.Wehaveappliedsimilarprice
differentialstotheEthiopiandata.
Tobeginwith,thecowmilkproducerpriceforEthiopia,givenintheFAOdatabaseandapplied
in this study, is 1.2 times higher than the figures used by MOFED and Behnke. Similarly, the
camelmilkandgoatmilkproducerpriceusedinthisstudyare2.4and1.4timeshigherthanthe
correspondingproducerpricesusedbyMOFEDandBehnke.
3.4.3 POULTRY PRODUCTION
Table 8 below displays summary statistics forestimatingpoultry related production. TheFAO
statistical database indicates that about 57.8 million chicken were slaughtered in Ethiopia
during2009.At881gramaveragecarcassweightperchicken,totalchickenmeatamountingto
50.9 million tonnes was produced. In the FAO statistical database, the producer price of
chickenmeatwasgivenasbirr39,103pertonne(oraboutbirr34perchicken).Theestimated
grossvalueofchickenmeatduring2009wasestimatedataboutbirr1,990million.Similarly,
theestimatedgrossvalueoftotaleggproductionwasaboutbirr498million.Thus,estimated
grossvalueofpoultryproductionwasbirr2,488million.Poultryproductionwasnottakeninto
accountinBehnkesestimatesofgrossvalueoflivestockoutput.

24

Table8EstimatesOfGrossValueOfPoultryAndEggProduction

Chickenmeatproduction
Producinganimals/slaughtered(1000head)
Yield/CarcassWeight(gram/Animal)
Production(tonnes)
Priceofchickenmeat(birr/tonne)
Totalvalueofchickenmeatproduced(millionbirr)
Eggsproduction
Laying(1000Head)
Yield(gram/chicken)
Production(tonnes)
ProducerPrice(birr/tonne)
Totalvalueofeggproduced(millionbirr)
Totalvalueofchickenmeatandeggproduction(million
birr)

57,800
880.5
50,893
39,103
1,990

8,600
3,589
30,865
16,124
498
2,488

3.4.4 HONEY PRODUCTION

Information obtained from CSA (2009/10) indicated there were about 4.6 million beehives in
Ethiopianduring2009.ThisisthesameasthefigurereportedintheFAOstatisticaldatabase.
Thebulkofthebeehives(97%)aretraditional,withayieldof7.0kgofhoneyperyear.Modern
beehivesconstituteonly3%ofthetotalbeehivesbuttheiryieldperyearis25kgperhive,more
than3timestheyieldoftraditionalbeehives.Thesemimodernortransitionalbeehivesarea
mere one percent of total beehives but they are just over twice the level of productivity of
traditionalbeehives.Producerpriceofhoneyperkgwas22.0birraccordingtotheinformation
obtained from the producer price database of CSA. Thus, the gross value of total honey
produced in Ethiopia during 2009 was estimated at birr 760.7 million. In addition to poultry,
honeyproductionwasnotincludedinBehnkesestimates ofgross valueof livestockoutputs.
Withregardtobeewaxproduction,nosignificantbeewaxisproducedfrommodernbeehive
asoneoftheindicationsofthequalityofmodernbeehivethatenablesbeekeeperstoproduce
qualityhoney.Transitional(intermediate)andtraditionalbeekeepingpractices,theproportion
of crude wax that can be produced accounts for 20% of the total honey production,
respectively.

25

Table9EstimatesOfGrossValueOfHoneyProduction

Modern
Transitional
Traditional
Totals

No.of
Beehives
(000)*

Honey
yield
(kg/hiv
e/year)
**

Production
(000,kg)

Total
value
(million
birr)x

%of
crude
bee
wax

118.0
33.1
4,447.0
4,598.2

25
15
7
7.5

2,951.6
497.2
31,129.1
34,577.9

64.93
10.94
684.84
760.71

0
20
20

Crudebee
wax
produced/
annum
(Millionkg)

0
9.94
6.23
16.2

Average
farmgate
priceof
(Birr/kg)

Annual
income
(Million
Birr)

25
25
25
25

0
248.6
155.6
404.3

Source:*CSA(2009/10)
**NationalBeeResearchInstitute(2011).Note:x@22birrProducerpriceofhoneyper

kg,whichwasobtainedfromproducerpricedatabaseofCSA.
3.4.5 OXEN DRAFT POWER
In the Ethiopian agricultural systems, oxen play a major role as source of animal traction for
preparationofcroplands.Accordingto2009/10CSAdata,therewereatotalof12.8million(or
6.4millionpairs)ofoxenprovidingdraftpower.ILCA(1986)estimatedthatoxenworkforabout
60 days per year on average in Ethiopia. Azage (1998) agrees that oxen work for about 2
monthsperyear.TherentalvalueofapairofoxeninEthiopiawithoutfarmerwasBirr40.00
perdayonaverage.
Table10EstimatesOfGrossValuesOfOxenTractionPower
Descriptions
Totalnumberofapairofoxen(million)
Averagenumberofdaysspentbyoxeninlandpreparation
Nationalaveragerentalvalueofapairofoxenperday(birr)
TotalvalueofoxendraughtpowerinBirr(Million)

Values
6.4
60.0
40.0
15,419.1

Behnkesreportedthatanimaldraftpower(althoughitisnotclearwhetherornotthisincludes
equines used in ploughing crop lands) generate gross value added worth birr 21,500 million.
Thisisgreaterthanourestimateby40%.Themainsourceofsuchaninflatedestimateliesin
the method Behnke applied in obtaining the figure. Instead of starting with draft animal
population,theiremploymentrateperyear,andthepaymentfortheirservices,Behnkeopted
forstartingwithcultivatedagriculturalland,proportionoffarmerswhousedraftanimalsand
26

roughestimatesoftheshareofdraftanimalsingrossvalueaddedincropproduction.Surely,
there are plenty of compounding errors involved in such series of strong assumptions and
extremelyindirectmethods.
3.4.6 TRANSPORTATION AND DRAFT SERVICES OF EQUINES
Equinesrenderconsiderableservicestothenationaleconomymainlyindeliveringservicesfor
transportationandassourceofdraughtpower.AccordingtoCSA(2009/10)agriculturalsample
surveyreport,draughtanimalreferstoanimalsthatareengagedinactivitiessuchasploughing,
threshing,etc.Estimationofservicesofequineswasdonebyusingcensusdataof2009/10(CSA
2010). Census data disaggregated (horses, donkeys and mules) aged 3 years and above, and
camelsaged4yearsandaboveaccordingtotheirservices,mainlytransportationanddraught,
asdisplayedintable11below.
Table11EstimatesOfGrossValueOfServicesOfEquines

Number

Horses
Transportation
1,208,433
Draft
143,955
Donkeys

Transportation
3,478,579
Draft
813,845
Mules
Transportation
292,492
Draft
15,062
Camel
Transportation
169,962
Grossvalueofservices
Source:livestockcensus(CSA2010)

Service
Days/year

Rentalservices
(Birr/day)

Value(Million
Birr/year)

46
42

25
35

80
48

1,390
212

15
15

4,174
586

46
42

30
40

404
25

36

40

245
7,035

While horses, donkeys and mule provide both transportation services and draft power to
ploughcroplands,camels(whicharealsoincludedinthisanalysis)provideonlytransportation
services.

27

Thenumberofaverageservicedaysandaveragedailyrentalvalueswereobtainedfromcase
studies and keyinformant interviews with agriculture professionals and farmers of different
regions.ThestudymadebyMengistuetal.(2008)innorthernEthiopia,SouthGonderzoneof
AmharaRegionreportedtheaverageservicedaysofequines(horses,mulesanddonkeys)ina
yearfortransportationanddraftpower.Thisfindingwasconfirmedwithinformationcollected
fromkeyinformanttelephoneinterviewswithagricultureexpertsofAwizoneinwesternparts
ofAmharaRegion,whichisadominantareaintheutilizationofhorsesandmulesasdraught
powersourceandtransportation.Similarly,theannualaverageserviceyearsofdonkeysinthe
central rift valley of the country was obtained from Adami Tulu Jido Kombolcha district of
OromiyaRegion.CamelrentingisalsoacommonpracticeinNorthEasternpartofthecountry
inBatidistrictofAmharaRegion.ThestudymadebyAgajieandTakele(2008)inBatiDistrictof
AmharaRegionreportedaverageservicedaysofcamelinayearanddailyrentalvalues.
Accordingly, gross value of equines transportation and draft services were estimated at birr
7,035 million. It is important to stress that estimates reported here are based on extremely
rudimentary set of information, simply because the economic role of equines are not yet
studied systematically covering different agroecological zones of Ethiopia. This is a very
importantareaforfutureresearch.
Benkes estimate of value added by equines was birr 18,959 million, nearly 3 times the
correspondinggrossoutputestimatedinthisstudy.Themethodologyheemployedforarriving
atthisparticularfigureisveryunclear,buthereliedonastudywhichwascitedinthebodyof
thereportbutnotlistedinthereferences.Inanyevent,thecitedstudycoveredonlyaspecific
district in the Southern Nations and Nationalities Region (SNNR). Additionally, the way the
referencewasmade(seeBehnke2011,p.19),isnotpossibletomakeanyjudgementwhether
theparticularstudywasreferringtogrossvalueofequinesservices,salesvalueoftheequines,
orgrossvalueadded.Therewasareferencetobirr5323perannumperhousehold,whichwas
then grossed over to all households in Ethiopia, but in our view this is a very unrealistic
estimateandanextremelyexaggeratedfigure.

28

3.4.7 DUNG PRODUCTION

Table12belowprovidesasummaryofdungproduction.WehavefollowedBehnkesapproach
butitwasnecessarytorevisetheestimatedvalues.Behnkesestimatewasconfinedtodung
for fuel, which was influenced by a previous study by the Ethiopian Energy Authority (EEA).
Sincedungproductionhastraditionallybeenlimitedtousingcattlemanure,theEEAstudydid
notgobeyondestimatingbiomassofmanurefromcattle.However,Behnkehavegonefurther
andexploredotherresearchfindingswhichestimatedtotalmanureproductionfromallother
livestock categories, by converting this to cattle equivalents using tropical livestock unit
conversion method. In the end, the estimated manure yield was applied to the cattle
population,exceptthatthecoefficientwaschangedfromtheEEAestimateof0.182tonneper
cattleperyearto0.237percattleperyear.Asfarastheroleofmanureofdungproductionis
concerned, it is important to retain the EEA approach simply because it is not common to
produce dung from manures of equines and small ruminants. Therefore, we opted for using
theEEAcoefficientandthenappliedtoonlythecattlepopulation,withouttakingintoaccount
theotherlivestockcategories.
Table12EstimatesOfGrossValueOfDungProduced
Descriptions
Cattlenumber
Dungproductionpercattleperyear(tones)
Priceofdung(birr/ton)
Grossvalueofdungproduced(millionbirr)

values
50,884,000
0.182
306
2,834

Accordingly, the gross value of dung production was estimated at birr 2,834 million, which is
slightlyhigherthantheaverageofMOFEDandBehinkeestimates.Atthispoint,itisimportant
to stress that the role of livestock manure in the Ethiopian economy is likely to have been
grossly underestimated. Perhaps EEAs study seems to have set a tradition of looking at
manure only from fuel and energy perspective. Accordingly, both MOFED and Behnkes
estimated have not gone from beyond manure use for dung production. However, the
economic role of manure as fertilizer in agricultural production activities is by far the most
important economic role of manure production. In this context, there is simply no need to
consider only cattle manure, since manure from all livestock types are equally relevant. In
29

termsofmethodologicalapproaches,thekeyliesinconvertingmanuretofertilizerequivalents
andthencomputehowmuchitwouldcostifthesameplotoflandwasfarmedusingfertilizer
ratherthanmanure.Thisisaveryimportantareaforfurtherresearch.
3.5 ESTIMATES OF COSTS OF INTERMEDIATE INPUTS IN LIVESTOCK
PRODUCTION
Estimateoftotalintermediatecostoflivestockproductionisveryrudimentary.Theestimates
reported here are very likely to grossly underestimate the actual costs because the bulk of
livestockrelyonnaturalresourceswhicharenotyetappropriatelyvaluedecosystemservices.
Even for those that are valued, the information system in the Ethiopian context is extremely
sketchy.Therefore,westressthattheestimatesweprovideinthisregardneedtobereadwith
caution.
There are three different categories of intermediate inputs that are reported in this section.
Table13providessummaryoffeedcosts,takingintoaccounttheproportionoftotallivestock
thatdependonsupplementaryfeed(roughagesandconcentrates)andestimatedcostsofthese
feed types. The total cost of feed was estimated at birr 10,152 million (the sum of costs
estimatedfordifferentlivestocktypes).
Table 14 reports total costs of health costs, which is basically obtained by summing together
totalcostsofdifferenttypesofhealthproductsdistributedorsoldduringtheyear.Theseadd
uptobirr22.3million.Additionally,therewasaseparatelyestimatedtotalbreedingcostwhich
was obtained by estimating total costs of semen distributed or sold during the year, which
comestobirr2.0million.
Therefore, the total cost of intermediate inputs was obtained by addition of the three
categoriesdiscussedabove,andthisyieldbirr10,176million.ItshouldbenotedthatBehnkes
didnotmakeanyattemptatestimatingcostsoflivestockproduction.

30

Table13EstimatesOfTotalFeedCosts

Cattle
Sheep Goat Poultry
Livestockpopulation
50.9
35.9
34.7
42.1
%oflivestockfedonsupplementaryfeed
8.1
2.5
3.4
3.4
Numberoflivestockfedonsupplementaryfeed(Million)
4.1
0.9
1.2
1.4
TLUConversionfactors
0.7
0.1
0.1
0.0
TLUfedonsupplementaryfeed(Million)
2.9
0.1
0.1
0.0
TotaldrymatterintakeperTLU(kg/day)(Million)
7.1
10.0
10.0
15.0
Totaldrymatterintakealllivestockunits(millionkg/day)
20.5
0.9
1.2
0.2
Totaldrymatterintakealllivestockunits(millionkg/annum) 7476.8
327.3 430.4
78.4
Shareofroughageintakeintotaldrymatterintake
0.7
0.7
0.7
0.7
Shareofpurchasedroughage
0.3
0.3
0.3
0.3
costperunitofpurchasedroughage(birr/kg)
1.3
1.3
1.3
1.3
costperunitofpurchasedconcentrates(birr/kg)
3.0
3.0
3.0
3.0
Costofroughageperannum(millionbirr)
2400.8
105.0 138.3
25.2
Costofconcentrateperannum(millionbirr)
6729.2
295.0 387.4
70.7
Totalfeedcost(millionbirr)
9130.0
400.0 525.7
95.9

Table14EstimationOfHealthRelatedCostsForAnimalsForTheYear2009/10
Typeproducts

Bacterialvaccines

CBPP(ContagiousBovine
Pleuropneumonia)
Anthrax
Blackleg
SheepandGoatpasteurellosis
Bovinepasteurellosis
CCPP(ContagiousCaprine
Pleuropneumonia)
FowlTyphoid

Unit

Unitprice
(Birr)

Dose

Performanceof2009/10
Quantity
Value(Birr)
(Dose)

0.25
5,201,400
1,300,350

"
"
"
"
"

0.25
0.50
0.40
0.40
1.35

8,061,100
6,398,450
6,241,900
4,999,200
543,712

2,015,275
3,199,225
2,496,760
1,999,680
994,276

"

0.20

839,700

167,940

ViralVaccines

"

LSD(LumpySkinDisease)
SheepandGoatPox
PPR(PesteDesPetitsRuminants)
FMD(FootandMouthDisease)

"

0.30

5,081,610

"

0.15

8,864,340

"

0.25

11,653,850

"

7.00

348,370

1,524,483
1,329,651
2,913,463
2,438,590
31

AfricanHorseSickness
NewcastleDiseaseLasotu
NewcastleDiseaseHB1
NewcastleDiseaseThermoStable
Vaccine
FowlpoxVaccine
GumboroStandardVaccine
RabiesVaccine

"

0.45

1,206,660

"

0.12

1,189,140

0.12

1,271,800

"

0.15

2,950,513

"

0.20

586,210

"

0.15

1,235,500

"

7.00

24,922

Subtotal
Saline
Total

66,698,377

3.25

43,334.00

542,997
142,697
152,616
442,577
117,242
185,325
174,454
22,137,600
171,288
22,308,889

Source:NationalVeterinaryInstitute
3.6 ESTIMATES OF LIVESTOCK GROSS DOMESTOC LIVESTOCK PRODUCT

Table 15 provides summary statistics and estimates of livestock sector GDP. This is done by
bringing together estimates reported in Table 614. The first rows report gross value of
livestockoutputassumofvaluesobtainedfromestimatesofofftakes,milk,poultry,honeyand
manure.Thisgivesbirr46,671million.
Table15EstimatesOfGrossDomesticProductsRelatedToLivestockActivities
Categories
Values(millionbirr)
Grossvalueofoutputs
46,671

Offtakes(cattle,shoats,andcamel)
20,237

Milk
20,558

Poultry
2,488

Honey
553

Dung
2,834
Costoflivestockproduction
10,176
GDPoflivestockactivities(GDPLA)
36,495
GDPoflivestockservicesinothersectors(GDPLDA)
22,454
GDPoflivestockrelatedactivities(GDPLRA)
58,949
GDPagricultural(2009)GDPAGRI*
165,489
GDPaggregate(2009)GDPAGG*
357,340
GDPLA/GDPAGRI(%)
22.1
GDPLA/GDPAGG(%)
10.2
GDPLRA/GDPAGRI(%)
35.6
GDPLRA/GDPAGG(%)
16.5
Source:computedfromdifferenttables;*obtainedfromMOFEDswebsite.
32

ByfarthemostconfusingaspectofBehnkesreportwasthefactthathereportedgrossvalueof
livestockproductionaslivestocksectorGDP(seeBehnke2010,pp.3132).Therefore,themain
difference between this study and Behnkes report lies in the fact that Behnke does not
distinguish between gross value of livestock output and gross value added in livestock
activities(orlivestockGDP).However,itisvitaltomakedistinguishbetweenvaluesofgross
outputandgrossvalueadded.
Accordingly, we go further and calculate livestock GDP by deducting total intermediate costs
from the total gross output, as clearly discussed in the conceptual framework in Table 2 and
reportedbelowintable15.Accordingly,thesizeofGDPgeneratedintheprocessoflivestock
production was estimated at birr 36,495 million. Clearly, the GDP figure we report here is
considerablylowerthanthefigureBehnkereportedasGDP.Intable15,GDPgeneratedinthe
livestocksectoritselfislabelledasGDPLA(GDPinlivestockactivity).
ItshouldbenotedthatGDPgeneratedbylivestockcapitalservicesinothersectorsaddedup
toabirr22,454million.ThisisthesumofoxenandequinesGDPgeneratedbydraftpowerin
croppingsubsectorofagriculture,V2inTable2,andequinestransportationservicesinthenon
agricultural sector, V3 in table 2. In table 15, we labelled these as GDPLDA (livestock
dependent activities). If we sum together GDPLA and GDPLDA, then we obtain birr 58,949
millionwhichisGDPgeneratedinalllivestockrelatedactivities(GDPLRA).
Now it is appropriate to present these figures as percentage of agricultural and aggregate
national GDP. GDPLA constitutes 22.1% and 10.2% of agricultural and national GDP
respectively. On the other hand, GDPLRA constitutes 35.6% and 16.5% of agricultural and
nationalGDPrespectively.

33

4. CONCLUSION
The primary purpose of this study was to examine and evaluate findings in Behnke reports
(2010 and 2011) on economic accounts related the livestock sector in Ethiopia. For this
purposeataskforcewasformedbybringingtogetherexpertsfromdifferentgovernmentaland
nongovernmentalorganisationsinthecountry.Thetaskforcestarteditsactivitiesbyfocusing
on establishing a consistent and comprehensive conceptual and analytical framework, which
was then used it to examine details offindings in the two reports produced by Behnke. The
activities of the taskforce was not limited to establishing an analytical framework, but it was
alsonecessarytoredothetaskoftheestimationofgrossoutputsproducedthroughanumber
oflivestockactivities,costsoflivestockproductionandthengrossvalueaddedgeneratedinthe
process of livestock production. In the process, the gross livestock output for different
subsidiaryaccountsinthesystemoflivestocksectoraccountsreportedinBenhkereportwere
compared with the corresponding findings of the taskforce. In each case, we have provided
commentaries throughout the report explaining possible sources of divergence between our
findingsandthosereportedinBehinkesreports.Consequently,itisnotappropriatetorepeat
the detailed assessments here since they are clearly stated in the body of this report in
different sections. Here we concentrate on providing comments on four broader
methodologicalproblemsinBehnkesapproachtoestimatinglivestocksectorGDP.
First,byfarthemostseriousconceptualandmethodologicalprobleminBehnkesreportisthis
nodistinctionwasmadebetweengrossvalueofoutputandgrossvalueaddedorGDP.
In fact, in both reports (2010 and 2011) gross output figures are conveniently referred to as
grossvalueaddedorgrossdomesticproduct.Thisisaveryunusualmethodanditdepartsfrom
theconventionofsystemsofnationalaccountsinamajorway.
Second, the established system of national accounts (SNA), which guides the estimation and
establishments of system of national accounts in all countries in a standardised way clearly
definessectoralvalueaddedcompensationfordifferentfactorsofproductionemployedin
thatsectororindustry.Thevalueaddedbyaparticularfactorofproductioninaspecificsector
34

isaccountedforasvalueaddedinthesectorthathasemployedthefactorofproduction.For
instance,oxendraftpowerisacapitalserviceemployedinthecroppingsectorandthevalue
addedshouldbeaccountedforinthecroppingsectorNOTinthelivestocksector.Ofcourse,
the owner of the oxen receives payments for the services of the oxen, and in most cases,
actuallyitisthesamefarmerwhousedtheoxentoploughhisownfieldwherehewouldliketo
grow crops. However, the system of national accounts records these separately, even if the
activitiesaregeneratedonthesamefarm.Thefactthatthevalueaddedattributabletooxen
draft power is recorded in the cropping sector does not make the livestock sector any less
importantinitsroletosupportlivelihoods.Inspiteofthesefacts,Behnkesreportpresented
draft power and transport services related valueadded or GDP as livestock sector GDP.
However, we have clearly shown in Table 15 that these constitute part of GDP generated in
livestock dependent other sectors. For this purpose, we have separately reported livestock
specific valueadded (GDPLA), livestock dependent sectors valueadded (GDPLDA), and
livestockrelatedvalueadded(GDPLRA=GDPLA+GDPLDA).
Third,thelackofconceptualclarityandtheextentofdeparturefromthestandardmethodsof
SNAgotevenworseinthesecondBehnkereport(Behnke2011).Thefinancial,insurance,and
riskrelatedvaluesreportedaslivestocksectorGDParebyfarthemoststrangeandunheard
of methods. This is not to say such concepts do not exist in the literature on the rural
economies, particularly in the context of livelihood frameworks. However, these are not yet
broughtinlinewithsystemofnationalaccounts,asreportedinaggregateeconomicstatistics.
Even if we decide to be innovative and start imputing such services including them into
Ethiopias system of national accounts, Behnkes report has not applied the kind of rigor
requiredtoaccomplishsuchatask.Forinstance,inflationadjustedruralcreditinEthiopiawas
assumedtobear100%interestrate,thiswasarrivedatbyapplyingthemaximumofreferences
cited(seeBehnke2011,p.16,table4).Attheveryleast,someaveragefigureshouldhavebeen
taken.Inanyevent,thiswassimplygrossedoverimplicitlythroughsomedoublecountingin
effect,theofftakevalueestimatesweresimplymultipliedby2.Thisimpliesthat,forinstance,
whenafarmersalesanoxenforbirr3000,thenthisofftakevalueconstitutesasalesvalue,a
directbenefit,andthenwewouldneedtoaccountfortheinsurancevalueoftheoxenduring
35

its stay on farm, because the farmer did not take any credit on which he would have paid
another3000asinterest.However,wedonotfindthislogicconvincingatall,andwewould
needtoconfinetheestimatestoexistingpractices.
Fourth, in addition to the finance and risk related conceptual problem, the second Behnke
report confused the production and expenditure approaches, on the one hand, and the
SNA based direct estimations of economic accounts with multiplier methods. In spite of
someshortcomings,mostofwhichwerereportedinthisstudy,Behnkesfirstreport(Behnke
2010) was confined to the production approach in estimating gross outputs. However, the
secondreporthasgoneoverboard,mixingproduction,expenditure,andevenmultipliereffects.
Consequently,Behnkemovedveryrapidlyfromtherealisticrangeofestimatesforthelivestock
sectorGDPinterchangeablyusinggrossoutputs,grossvalueaddedorGDP,ontheonehand,
and production approach and expenditure approach on the other, and as well as multiplier
effectsandeconomicbenefits(seeBehnke2011,p.20Table11).
5. KEY FINDINGS AND RECOMMENDATIONS
In line with the remits of this study, the taskforce is expected to come up with
recommendationsforMoFED,CSAandMoAtoimprovetheaccuracyofestimatesoflivestocks
contributiontoEthiopiasGDP.Suchrecommendationsarealreadystatedindifferentsections
ofthisreportwherefurtherdetailsofrecommendationsformethodologicalimprovementscan
be found. Here we focus on summary of key recommendations by classifying them under
broadtopics.
Improvementsoflivestockstatistics
ThetaskforceagreeswiththefindingsoftheBehnkereportsEthiopiaslivestockstatisticsis
incompleteandfluctuatesconsiderablybetweenyears.First,thelivestockdataisincomplete
becauseithasbeenconfinedtosedentaryfarmingpartsofEthiopia,andthepastoralistareas
are yet to be brought into theCSA census and sample survey frameworks. However, agood
proportionofthelivestockpopulationislocated,andmostimportantly,theroleoflivestockin
livelihoodsismostcriticalinlowland,pastoralandperipheralpartsofthecountry.
36

Recommendation 1: The CSA, in collaboration with the MoA, will need to conduct a baseline
estimateofthelivestockpopulationinpastoralistareas.
Second,theCSAlivestockdataliesinitsextremeyearonyearvariation.Itisnotclearwhether
suchoscillationsinthetimeseriesdataareduetoexogenousshockssuchasdroughtsoranimal
diseases or data inaccuracy. In any event, the existence of such variations is likely to
considerablyreducedconfidenceamongresearchersandpolicymakersinthereliabilityofthe
dataseries.
Recommendation 2: The CSA censuses and sample survey reports should be accompanied by
explanationsforextremeyearonyearvariationsinthelivestockdataseries.Ifthevariations
areduetochangesinsurveymethodsandprocedures,thenitisimportanttoupdatethedata
series by adjusting the data series of the previous years by using methods and procedures
appliedtothelatestyear.ThekeypointhereisthatCSAhastoimprovelivestockdatareliability
andhencegainconfidenceofusersofthedataseries.
Livestockproductivitymeasurements
ItshouldbenotedthattheconsultancystudypresentedintheBehnkereportsaswellasthe
taskforce study have not had enough time and resources to undertake a complete and
comprehensiveassessmentofproductivityofEthiopiaslivestock.LiketheBehnkereport,this
study relied on ad hoc coefficients to estimate productivity of the livestock population.
However, the taskforce study has developed consistent and comprehensive sets of logic to
improvemeasurementsoflivestockproductivity.Amajorshortcomingoftheexistingmethods
employed by MoFED and also implemented in the consultancy study was the inappropriate
valuationmethod.Asnotedinthereport,averagepricesofliveanimalsareextremelyarbitrary
since they involve averages over livestock units in different age, sex categories as well as
differentbodyconditions.Asaresult,itisimportanttofollowestablishedFAOmethodologyin
usingcarcassweightandthenapplyingpricesofmeatperunitofweight(kgortonnes).
Recommendation 3: In estimating gross value of livestock output, MoFED should follow the
animalcarcassweightbasedvaluationmethod,changingfromthecurrentpracticeofapplying
37

averagepricesoflivestockunits.Similarly,CSAwillneedtochangevaluationoflivestockunits
to weight based methods in generating producer prices and consumer prices for livestock
products.
Inadditiontovaluationmethods,livestockproductivityisaffectedbythecoefficientsappliedin
measuring such key variables as offtake rates. In livestock weight based productivity
measurements, estimated gross values of offtakes of different livestock types are
determinedbytheofftakeratesortheratiooflivestocksoldtothecorrespondinglivestock
population and the estimated average carcass weight of each animal sold. The most
importantpointtotakeintoconsiderationinrevisingthesecoefficientsistochecktheaccuracy
of theexistingestimatesbycomparingthecoefficientstotheactualproductivity, ontheone
hand,andcomparingfindingsfromlocalestimatestointernationalstandards.Forinstance,the
offtake rates applied to cattle in Ethiopias data in the FAO statistical database, 0.07, is
closely to the corresponding figures applied to livestock data in the same database to
neighbouring countries in the same level of development Uganda (0.07) and Sudan (0.09),
althoughKenya(0.21)ismuchhigherandperhapsrightlysosincethelivestocksectorinthat
country is more developed than that of Ethiopia or the other countries. However, carcass
weightappliedtoeachcattleforEthiopiaisconsiderablylowerthanthecorrespondingfigures
fortheothercountrieslowerby38%thanUgandancattle,11%thanSudancattle,and28%
thanKenyacattle.
Recommendation4:CSAandMoFEDshouldconductacollaborativestudytoestimateofftake
ratesandcarcassweightperanimalfordifferentlivestockunits.Revisingtheseestimatesis
extremelyimportanttoupdateEthiopiaslivestockproductivityandmakethemcomparableto
other countries. The productivity assessments should aim at updating productivity of most
livestockunitsandtheirproductsasdisplayedinTable5thederivationmethodsdiscussedinthe
subsequentsections.
Economicvalueofmanure

38

The measurement of the economic value of manure has traditionally been confined to dung
production,andhencebyimplicationitislimitedtocattlemanure.AsnotedintheBehnke
report, this tradition has simply followed the early start of the Ethiopian Energy Authority to
estimatetheenergyroleofdung.However,thereisnoreasontolimittheeconomicvalueof
manuretodungproduction.Itisimportanttoexpandtheroleofmanuretoitsroleasfertilizer.
Recommendation 5: MoFED should expand the gross value of manure production by going
beyond therole ofdung cake asfuel and recognizing therole of manure asfertilizer. To this
effect,werecommendtheconversionofmanurebiomassproducedtofertilizerequivalentand
hencecomputethegrossvalueofmanureproductionaccordingly.
Rentalvaluesoflivestockascapital
This study has provided a conceptual framework for studying the role of livestock as capital.
However,wehavereliedonincompleteinformationtoprovidetheinitialestimatesofthesizes
ofthegrossvalueaddedgeneratedthoroughlivestockcapitalinothersectorsoftheEthiopian
economy.
Recommendation 6: MoFED should revise and reallocate factor payments in the cropping
subsectorofagricultureandthetransportsectortorecognizetherolesofequinesandoxenin
generatinggrossvalueaddedinthesesectors.Intheexistingestimatesofcroppingsectorand
transportsectorGDPfigures,theshareoflivestockcapitalhavebeensubsumedundertheshare
ofcapital,withoutexplicitlyandspecificallyrecognisingthesharesofthelivestockcapitalin
aggregate capital. Therefore, MoFED should spit shares of payments for capital services in
thesesectorsintotwo:livestockcapitalandothercapital.ThiswillleavethesizesoftheGDPin
thosesectorsunchangedbutitrecognisestheshareofthelivestockcapital(andhenceowners
of livestock assets or capital). If this revision is undertaken, then the role of livestock in
improvinglivelihoodswillberecognisednotonlyintermsofdirectlivestockproductionbutalso
indirectlybygeneratingincometoownersoflivestockcapital.
Recommendation 7: The initialestimates on the sizes of GDP attributable to livestock capital
arelikelytounderestimatetheactualroleoflivestockcapitalintheEthiopianeconomy.Forthis
39

reason, CSA, MoA and MoFED should work together in establishing a methodological
framework in CSA and MoA census and sampling surveys to more accurately estimate gross
value added by the livestock as capital in different sectors of the Ethiopian economy.

40

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42