International Congress Livelihood 2013, Sustainable livelihoods in the tropical drylands

Mekelle, Ethiopia, 17-21 September 2013

Policy options for reducing vulnerability in conflict-prone areas:

Livestock market dynamics in pastoralist areas of Ethiopia

Bjorn Van Campenhout with Fantu B. Nisrane, Derek Headey and Bart Minten

IFPRI, Kampala and Addis Ababa

Introduction

• Pastoralist and Agro-pastoralist livelihoods = extremely vulnerable

• Stengthening livestock markets to increase resilience:

“An initially localized scarcity can only persist if price signals are not transmitted to other markets” (Ravallion, 1986)

• Study of price movements of commodity in spatially seperated markets to learn how well they work

prices and market performace

1EQ

D

S

S

D

1EP

2EQ

2EP

D’

'2EQ

'2EP

'1EQ

'1EP

S’

Until TPP EE '2'1

Connecting fishermen to markets

• No transaction costs

• Symmetric transaction costs

• Time dependent transaction costs

• Impose 1 structural break in time

Econometric model

Data: livestock in Ethiopia

Addis - Adama

Addis - Adama

Adama – Dire Dawa

Adama – Dire Dawa

Shashemene - Moyales

Shashemene - Moyales

Policy options

• Trade agreements / transhumance arrangements

• Use price information in FEWS• Reduce reliance on trust based relationship• Policies that acknowledge the particular

nature of livestock in a pastoralist setting (adapted savings products, safety nets, destocking funds at regional level)

Thank you!!!