1. DETERMINANTS OF MARKET PARTICIPATION AND ANIMAL HEALTH MANAGEMENT OF SMALLHOLDER LIVESTOCK PRODUCERS IN ZAMBIA
April 2nd 2008
Presentation to Stakeholders in the Livestock Sector in Zambia.
World Bank Office, Lusaka, Zambia By
Chewe Nkonde
May 28th 2010
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2. OUTLINE Introduction Livestock Sector Status Theoretical Framework
Data
Results
Key Discussion Points
Conclusions
Implications
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3. INTRODUCTION
Widespread recognition that the Zambian livestock sector has huge potential but continues to receive less attention.
Recent positive growth in agriculture mainly attributed to the crop sector.
2009 budgetary allocation to livestock development (6%) but FSP (40%).
Potential for growth in the livestock sector is there:
Increasing per capita consumption of livestock products.
Supply of livestock products outstripped by local demand in Zambia.
Demand for Zambian livestock products has been steadily increasing in the Southern African region.
4/02/2008

4. Problem Statement
Smallholder livestock producers in Zambia face constraining factors that have inhibited their potential.
Compounded by chronic incidence of animal diseases.
Vital to understand drivers of market participation and animal health management.
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5. Study Focus Smallholder livestock producers in Zambia
Cattle, milk and goat markets:
What influences participation in markets?
What influences sales, conditional on participation?
Cattle disease management
What drives smallholder use of preventive and curative modern methods?
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6. Study Objectives
To identify policy options that would enhance smallholder livestock development in Zambia.
Specifically:
Descriptive characterisation.
Identify market participation determinants.
Identify factors influencing animal health management decision-making.
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7. LIVESTOCK SECTOR STATUS
Contributes about 35% to the agricultural GDP.
Three main categories of production systems:
Traditional, small-scale commercial & commercial
Traditional is major source of marketable livestock though off take rates are low.
Marketing chain of beef cattle in the traditional sector is lengthy and cumbersome.
Smallholder dairy producers supply most of their milk to the informal sector.
Goat meat not fully integrated into the formal butchery sector.
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8. Livestock Policy Focus
ACF identified key areas critical to the enhancement of livestock development:
Animal disease control
Animal production and processing
Marketing
Imperative that devised strategies meant to enhance livestock development are accompanied by well-researched findings.
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9. THEORETICAL FRAMEWORK
Market participation:
f(Transaction costs, human capital, physical capital, financial capital).
Heckman selection model.
1st stage: determine the factors that affect the decision by smallholders to participate.
2nd Stage: determine the extent of participation.
Cattle disease management:
f(Economic factors, biophysical factors, institutional setting, farmer characteristics, farm characteristics).
Modeled using the probit approach.
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10. DATA
Used the 2004/2005 PHS of small and medium sized holdings in Zambia conducted by the CSO.
Based on the new sampling frame proposed by Megill (2004).
A stratified two-stage sampling scheme was used:
Stage 1: The PSUs, SEAs, were selected using PPS
Stage 2: Households selected randomly in each PSU
A sub-sample of 2800 livestock owning households was used.
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11. RESULTS
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12. Results (2)
Average number of cattle owned was 9.27 per household, with Western (18.85) being the highest and Luapula (3.75) the lowest.
Only 20% of cattle producers sold cattle.
Cattle off-take rates were below 5%.
Daily milk production averaged about litres per household
Only 25% of milk producers sold the surplus milk.
Average number of goats owned was 6.80 per household
Off-take rates for goats stood at 17%.
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13. Results (3)
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14. Reasons for not Practicing Tick Control
Results (4)
Reasons for not Practicing Tick Control
Type of Tick Control
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15. Sources of Modern Veterinary Medicines
Results (5)
Sources of Modern Veterinary Medicines
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16. KEY FINDINGS
Households with more livestock generated marketable surplus and hence were more likely to participate.
Participation by male headed households was consistent with a priori expectations.
Educated household heads participated more due to their ability to bargain for better offers.
Household size positively influenced participation attributed to availability of labour and pressure to meet household needs.
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17. Key Findings (2)
Chronic illness negatively affected participation in milk markets.
Negative association between the proximity variable and the decision to participate in milk markets was counterintuitive:
Opportunity cost of labour
Geographical location of milk producers in Zambia.
High population density was associated with participation and increased sales of livestock products because of the likelihood of increased demand.
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18. Key Findings (3)
A high asset portfolio was positively associated with participation and sales for livestock products.
Negative association of the variable sex with the decision to use tick control.
Positive influence of the proximity variable with animal health management decisions.
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19. CONCLUSIONS
Participation and sales in all 3 livestock markets was influenced by:
Education level of the household head
Number of livestock owned
Extension visits
Population density
Value of assets
Illness, ownership of other livestock types and proximity to the rail/main road had a negative effect.
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20. Conclusions (2)
The decision to use animal health management methods was influenced by:
Household characteristics
Accessibility to animal health management facilities
Location of producers.
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21. IMPLICATIONS Implications from this research were:
Production enhancement.
Training and education.
Empowering producers through group organisation.
Enhancing extension in livestock issues
Gender focused training.
Infrastructural development.
Access to animal health management facilities.
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22. Implications (2) For future research:
Panel data analysis useful for dealing with seasonal dynamics.
Deal with possible endogeneity
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23. THE END
THANK YOU!!!!