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Assessing the total economic value of pastoralism in Ethiopia

Seminararbeit 2015 38 Seiten




Part I Introduction
1.1. Objectives
1.2. Statement of the problem
1.3. Significance of the Study
1.4. Approach and Methods

2.1. The Economic Valuation Definitions and Concepts
2.2. The livestock economy and Economic significance of Pastoralism
2.3. Total Economic Values of Pastoralism in Ethiopia

Part III. Concluding and Recommendations
3.1. Conclusions
3.2. Recommendations



It has become the willingness of GOD to successfully complete this seminar paper. I, therefore, praise GOD.

I am grateful to thank my advisor Dr. Neduri Suryanarayana for their assistance in the production of this review. I would especially like to thank him for his constructive comments and feedback on all aspects of this work.

Last but very important I would like to express my heartfelt appreciation and gratitude to my Friend Tesfaye Nenko for the grand support and encouragement.


Table 1: the Location and Distribution of pastoral areas in Ethiopia

Table 2: Livestock Population Statistics (2004 ‐2010)

Table 3: Livelihood benefits derived from ruminant and equine livestock, 2008-09 in billion EB.

Table 4: Formal live animal and meat exports from Ethiopia, 2005-2013

Table 5: National Bank of Ethiopia estimates of the value in million US dollars and percentage of export share for major exports, 2002-2009

Table 6: Value (million US dollars) and percentage of export share for major exports, with and without the cross border livestock trade – 2002-03 and 2008-09

Table 7: Conceptual framework for assessing the value estimates for Pastoralism in Ethiopia

Table 8: Summary of valuation approaches and techniques (IUCN 2005)

Table 9: Summary baseline data and estimates on pastoralism Categorization of pastoralism

Table 10: Milk utilization in pastoral areas of Ethiopia

Table 11: Number of Cows for milk production* Ethiopia 2006-2011

Table 12: Producer price of fresh cow milk (USD per ton), Ethiopia 2006-2011

Table 13: Estimated total and proportional meat production from pastoral systems in Ethiopia (millions)

Table 14: Estimated input of Pastoralism to agriculture in draft power

Table 15: The estimated contribution of Pastoralism to Ethiopian Tourism industry

Table 16: Summary of indirect measurable values of Pastoralism in Ethiopia


Figure 1: Simplified schematic of the total economic value of pastoralism


Abbildung in dieser Leseprobe nicht enthalten


Ethiopian Pastoralists make an immense contribution to the national economy despite living in some of the most inhospitable and drought-prone parts of the country. Fundamental misconceptions about the pastoral production system in Ethiopia (like in many other countries in Africa) have led to a general perception among policy makers that pastoral lands are underused and therefore should be ‘developed’. Such misperceptions have subjected pastoral communities to political and economic marginalization. These economic misunderstandings have an important impact on the environmental goods and services that pastoralism provides, since they lead to low and misdirected investment, poor service provision and promotion of less sustainable alternatives to pastoralism. The aggregate results of reviews of the paper indicate that despite the widespread opinion that pastoralism is not an economically viable or rational livelihood activity; it contributes significantly to the GDP of Ethiopian economies.

This Review on the Total Economic Value of Pastoralism has two broad objectives: reviewing the Economic significance of pastoralism and the Direct and Indirect economic contribution of Pastoralism to the Ethiopian economy; by using a framework for Total Economic Valuation of Pastoralism in Ethiopia and the review contains the findings of an assessment of the Total Economic Value of pastoralism in Ethiopia, identify important knowledge gaps; Using the findings, the report discusses trends in pastoral economies and policy options that can support drylands economies more effectively.

The future of pastoralism is the subject of national and global discussions. The concerns are receiving attention from the scientific community to generate knowledge and share experiences and best practices that may offer solutions for the survival of pastoralism and the millions of people dependant on this livelihood.

Keywords: Pastoralism, Total Economic Valuation, Direct and Indirect values, Ethiopia

Part I Introduction

Pastoralism occupies a quarter of the world land area which is predominantly arid and semi-arid and supports tens of millions of pastoral households in which 60% are found in Africa. Pastoralism is an economic activity and land use system with its own distinct characteristics and it is a way of life for people who derive most of their income or sustenance from keeping domestic livestock reared in conditions where most of the feed is natural rather than cultivated or closely managed (Sandford, 1983).

According to (FAO, 2001), Pastoralism is one of the key production systems in the world and is taking place in about 25% of the globe and 66% of the entire continent of Africa. About 62 million hectares or 60% of the total land mass of Ethiopia, mostly the drier and hotter lowland parts, is inhabited by pastoralists (PFE, 2009).

Pastoralists represent some 10% of Ethiopia’s population (which is about 72 million) and approximately 40% of the land area of Ethiopia is considered suitable for pastoral land use only (to be under pastoral production) (Helland, 2006). After one year the national census of 2007, show that 12 million or 20% of the total population of Ethiopia depends on pastoralism and agro-pastoralism (CSA, 2007).

The drier and hotter lowlands of the country are inhabited by pastoral populations comprising the whole of Somali region (accounting for 57% of the pastoralists in Ethiopia), the Afar region (26% of the Ethiopian pastoralists). The Borana and Karrayu pastoralists in Oromia Regional State together account for about 10% of the total pastoral communities in Ethiopia. The remaining 7% of the Ethiopian pastoralists inhabit the lowlands of the Southern, Gambella and Beni Shangul regions (Yacob A., 2000; Sandford and Habtu, 2000 as sited in Abebe D. and Solomon, 2015).

The pastoral sector makes a very significant contribution to the national income, employment, agricultural production, and food demand of people in the world. They produce 10% of the global meat used for human consumption (Roger Blench, 2001).

The contribution to national economics is commonly expressed in terms of proportion of Gross Domestic Product (GDP), which in turn, is calculated from national livestock population and production coefficients. Therefore, GDP indicators are indirect measures and in part, depend on estimates of the proportion of the national herd found in pastoral areas of the country concerned and provides an immense contribution to the national economy of Ethiopia by raising 40% of the cattle, 75% of the goats, 25% of the sheep, 20% of the equines and 100% of the camels (Yacob Arsano, 2000). The total direct economic contribution of pastoralism to the Ethiopian economy (through the production of milk, meat, skin, hides, etc.) is estimated at US$ 1.53 billion, which accounts for about 6% of the agricultural GDP per annum (Berhanu and Feyera, 2009).

However, despite their economic contribution, there has been a fundamental misunderstanding of the pastoral production system in Ethiopia (like in many other countries in Africa). Resource alienation and curtailment of mobility has made pastoral households vulnerable to frequent droughts, food insecurity and famine (Eyasu E., 2014).

Work on the economic value of pastoralism and its development potential, showing that far from being the low productivity subsistence economy it was reputed to be, pastoral livelihoods make a major contribution to GDP and in many countries to exports. This is only partially captured by national economic statistics. In Ethiopia the inclusion of more accurate calculations of the contribution of livestock, especially in pastoral production, means readjusting the agricultural GDP figures upwards by 47 percent (IGAD, 2013).

Pastoral system is not simply a mode of livestock production, rather a complex system that needs adequate and careful valuation. They are also consumption systems that support millions of mobile pastoralists globally. There is a multiple and extensive set of values associated with pastoralism: some are tangible but many are not; some can be measured but many cannot; and those that can be measured are often underestimated (Halefom Y., 2014).

1.1. Objectives

The general objective of this paper is to review of the Total Economic values (TEV) of pastoralism and to give bird’s eye view on the total economic values (TEV) of pastoralism in Ethiopian Economy.

Specific objectives are to:

The Specific purpose of the present paper is to review:-

To Review the Economic significance of pastoralism in Ethiopia

To Review the Direct and Indirect economic contribution of Pastoralism to the Ethiopian economy.

To Review the environmental values and importance of pastoralism Provide Conclusion and Recommendation based on the review.

1.2. Statement of the problem

- The danger of undervaluation of real economic values of pastoralism is that it may wrongly lead to the tendency of gradual replacement of pastoralism by other land use systems that may be economically less feasible and may impose high costs on the environment in pastoral rangeland areas.
- The economic contribution of the pastoral production system to the national economy is not readily measurable and is mostly understated.

1.3. Significance of the Study

This review will be significantly useful for many reasons. It will help to highlight the multiple economic values of pastoralists that inform researchers, students, donors and development partners; it my fills the knowledge gaps that exist in the area of total economic benefits of Pastoralism by exploring both its direct and indirect benefits.

1.4. Approach and Methods

1.4.1. Approach

This Review adapted to the Total Economic Value (TEV) Analysis as its overall approach for data collection and analysis. The TEV concept is now a well-established and useful framework for identifying the various values associated with such production systems as pastoralism.

1.4.2. Methodology

This reviews has relied heavily on secondary data gathered from a review of previous studies on pastoralism undertaken in Ethiopia and other African countries and existing documentation on TEV of pastoralism in Ethiopia.


2.1. The Economic Valuation Definitions and Concepts

2.1.1. Definition of Pastoralism

Pastoralism is a subsistence (economic) pattern in which people make their living by tending herds of large animals. It is most often an adaptation to semi-arid open country in which farming cannot be easily sustained (Kandagor DR., 2005).

Pastoral development is the development of a livelihood system where households make more than half of their income from livestock-related activities using some degree of mobility to access commonly managed pastures. Such livelihood systems are not necessarily based entirely on livestock – they may include some agriculture, hunting or selling charcoal for example – but livestock are the principle source of income (Kratli and Swift, 2014).

Other definitions relate to the natural resource base in the production system. According to (Dietz, 1987) pastoralism is a livestock-based or a pasture-based economy, in which livestock directly or indirectly provides more than half of the food needs of households.

2.1.2. Total Economic Value (TEV) Concepts

Total economic value is composed of use value and nonuse value. Use value represents the utility enjoyed by people who directly use the good and it require actual participation to enjoy them. On the other hand, nonuse value refers to the value that people assign to preserve the good but do not use in a commercial or other manner. Both use and non-use values can be measured using willingness to pay or willingness to accept (Tietenberg and Lynne, 2012; Hanely and Barbier, 2009; Hackett and Sharpe, 2006 sited in Halefom Y., 2014).

TEV = use value + Non- use value

Use values are categorized in to direct use value (DUV) and indirect use value (IUV). On the other hand, nonuse values (also called passive use value) are inherent in the good. Nonuse or passive use values consist of existence value, bequest value and option value (Perman et al., 2003).

The concept of TEV underlies that Pastoralism is a way of life that adapts to marginal environments, characterized by climatic uncertainty and low-grade resources. It has considerable economic value and latent potential in the dry lands, and is central to the livelihoods and wellbeing of millions of the worlds poor (Hatfield and Davies, 2006).

2.1.3. Total economic value of pastoralism

Two types of livestock values have been emphasized in the empirical literature. These are the direct and indirect values. Direct value involves products that can be quantified such as milk, meat, sales of livestock, savings, cultural requirement among others while the indirect value entails tangible and less tangible values like source of livelihood, social support, market assess, and food security among others (Campbell and Knowles, 2011).

It is essential to extend the concept of pastoralism economic benefits beyond the value of livestock products (milk, meat, hides) to include all “values” associated with it. These values also need to be disaggregated within pastoral systems and households and between them and the broader national economy (Ced Hesse, 2006).

Figure 1: Simplified schematic of the total economic value of pastoralism

Abbildung in dieser Leseprobe nicht enthalten

Source: (Ced Hesse and MacGregor, 2006).

Figure above presents a conceptual framework composed of four “values” with which to assess the total economic value (TEV) of pastoralism to a national economy.

2.2. The livestock economy and Economic significance of Pastoralism

2.2.1. The Pastoral Economy in Ethiopia

Pastoralism is a production system made up of people, natural resources, livestock and social relations. None can exist without land of some sort (PFE, 2010). Pastoral livestock production is more profitable than crop cultivation even where cultivation is mechanized (Little et al., 2010 as cited by Abebe M., Dejene D. and Solomon B., 2015).

Pastoralists in Ethiopia are mainly found in seven regions. The main livelihoods systems include pastoralism, farming and ex-pastoralism those who have dropped out of pastoralism and now survive on petty income-earning activities (Behnke et al., 2007).

Pastoralists constitute a minority in Ethiopia, with an estimated 12–15 million of Ethiopia’s 77 million people (PFE, 2006). Livestock in pastoral regions accounts for an estimated 40% or so of the country’s total livestock population (Pantuliano, S. and M. Wekesa., 2008). The Intergovernmental Authority for Development (IGAD) estimates that in 2008/09 the pastoral livestock population contributed 34.8 billion ETB (Ethiopian Birr) out of the total national livestock value of 86.5 billion ETB to the national economy.

According to the Ministry of Agriculture, Ethiopia’s total livestock population has reached more than 88 million the largest in Africa and the livestock sub-sector contributes an estimated 12% to the total GDP and over 45% to the agricultural GDP (Courtenay Cabot Venton, Tenna Shitarek, Lorraine Coulter, and Olivia Dooley, 2013). In inclusion of more accurate calculations of the contribution of livestock to Ethiopia economy, especially in pastoral production, means readjusting the agricultural GDP figures upwards by 47 percent (IGAD, 2013).

Over 97% of the pastoral population lives in Somali, Oromia, Afar and Southern Region States (Table 1). It is estimated that in a country of close to 80 million people about 9.8 million people in Ethiopia are pastoralists. The data shows that out of the total 37.9 million TLU of livestock the country owns, 9.9 million TLU of livestock are found in the Pastoral areas. It shows that the share of pastoralism in the national livestock wealth is 26%.

Table 1: the Location and Distribution of pastoral areas in Ethiopia

Abbildung in dieser Leseprobe nicht enthalten

TLU = Tropical livestock unit, equal to 250 kg of live weight (Jahnke, 1982).

Source: (MoA and RD, 2004; (EEA, 2005).

The Economic potential of the area is immense indeed. The expensive rangelands are rich in bio-diversity. Big rivers cut across the pastoralized areas of the country. 40% of the cattle, 75% of the goats, 25% of the sheep, 20% of equine and 100% of the camels are found in the pastoralized area of the country. Almost all the National Park is situated in this area (Yacob, 2000).

2.2.2. Livestock Numbers, Products and Consumption in Ethiopia

Ethiopia has a huge livestock population. The sector also provides livelihood for 65% of the population. In different parts of the country livestock and livestock products account for 37–87 percent of the total household cash income. However, its maximum contribution to the total GDP is about 16 percent and to the agricultural GDP is around 30 percent (EEA, 2005 and Ayele et al., 2003).

In the pastoral and agro pastoral areas, livelihoods of the people entirely depend on livestock (Birhan, 2013). Significant reliance on livestock by household producers as a basic source of livelihood is one of the defining features of pastoralism. Studies indicate that an estimated minimum of 93% of the population in pastoral areas is directly dependent on livestock for subsistence (Mohammud Abdullah, 2003). The pastoral economy is also a significant source of surplus to the national economic growth. Data on pastoral livestock are significantly inaccurate, but some studies roughly indicate that the pastoral regions of Ethiopia account for 42% of the total national livestock population (Coppock, 1994; Desta and Coppock, 2002).



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Titel: Assessing the total economic value of pastoralism in Ethiopia