Elusive Profits

the need to strengthen pastoralists' position within the small ruminant

value chain in northern Kenya

Dr. Margareta Amy Lelea

German Institute of Tropical and Subtropical Agriculture

based on research conducted by

Guyo Roba, Margareta Lelea and Brigitte Kaufmann

EU Infopoint, October 17th, 2019 in Brussels

Efforts to link pastoralists to markets

2Photos: Abandoned livestock market in Sololo

Pastoralists are active in markets

3Photo: Old market in Merille

Understanding the functioning of livestock trade

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Qualitative research methods and Quantitative Co-inquiry

Intensive collaboration with pastoralist producers and traders

12 months of fieldwork between July 2014 – Oct. 2016

• Interactions with traders in markets

36 market days - Korr (20), Illaut (9), Merille (3) and Nairobi (4)

• Multi‐stakeholder and intra‐stakeholder meetings

Traders (n=8); Pastoral producers (n=14)

• Traders recorded and shared their business data

59 long-distance traders’ trips

25 inter-local market traders’ trips

25 Ilaut-Merille

51 Korr-Nairobi

8 Marsabit-Nairobi

• Narrative interviews with 20 traders Photo: Lelea and Roba in the Korr market

Organisation of the flow of sheep and goats

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from the production area to the terminal market

Credit: Joana Albrecht

Photo: Aerial view of a manyatta south of Korr

Organisation of the flow of sheep and goats

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Map of Laisamis sub-county and livestock trading routes

Organisation of the flow of sheep and goats

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Network of actors in the small ruminant value chain

Producers and Rearing Traders

9Photo: Women’s livestock marketing group, Ngurunit

Butcher Traders

10Photo: Shared butcher shop in Korr

Stationary traders, inter-local market traders and long-distance traders

11Photo: Weekly livestock market in Merille

Local long distance traders

12Photo: Lorry loaded with goats in preparation for the journey from Merille to Nairobi

Terminal market is a spot market

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Weekly price variability: example for two goat grades

Weekly prices for grade 1 and grade 4 goats at the Kariobangi market, NairobiBased on data from the Kenya Livestock Marketing Council (KLMC)

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March April May June July Aug. Sept. Oct. Nov. Dec. Jan.

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Grade 1 Grade 4

March, 2014 - January, 2015

Terminal market is a spot market

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Weekly price variability: example for two goat grades

Photo: Late morning in the Kariobangi market, Nairobi

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Net

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Trips

Net-Profit per trip Number of animals sold by trader per trip

May Jun Jul Aug Sep Oct Nov Dec Jan Feb May Jun Aug Sep Oct

2015 2016

Fluctuating net-profits of long-distance traders

15Source: Records for 56 trips of long-distance traders (by selling date in Nairobi)

0% 5% 10% 15% 20% 25% 30%

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% of trips

Pro

fit

ran

ge b

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ip (

Ksh

)Assessment of the net-profits of long-distance traders

16Source: 56 trips of long-distance traders

Investment per trip = 500,000 Ksh

Perspectives from long-distance traders

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“The goat business is more like gambling, there are days we get

good profit but there are also days we make huge losses. Even in a situation where we don’t get a

profit, we still have to sell them.” (Anonymous, Merille, August, 2014)

Photo: A long-distance trader, Ngurunit

Net-profits of traders with different trading arrangements

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Practical implications

• Need to shift development interventions from infrastructural investments to strengthening information flow and relationships.

• E.g. exploring contract based trade arrangements to link traders with terminal market clients

• Dealing with problematic situations traders face, e.g. targeted support for traders during droughts through transport subsidies

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Marketing cost

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0 5.000 10.000 15.000 20.000 25.000 30.000

Tax per animal sold

Commission for lorry broker

Truck rental

Handling costs (loading sand and goats)

Security fee for home guards

Herder accompanying the animal

Health permit

Livestock movement permit

Illicit payments at checkpoints

Entry fee (Nairobi)

Commission for broker (Nairobi)

Trader’s personal travel cost (fare & taxi)

Loss of animals

Average cost in Kenya shillings

Co

mp

on

en

ts o

f m

arke

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g co

sts

Traders in Korr, n=13

Average investment/trip= 500000 KSh

Source: 61 trips of long-distance traders: Korr (n=53), Marsabit (n=8)

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How to leverage more value towards pastoralists?

Photo: Fortnighly livestock market in Korr

Research publications for more information

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Roba, G.M., M.A. Lelea, O. Hensel, and B. Kaufmann 2019. Elusive Profits: understanding economic performance of local traders in the pastoral small ruminant value chain in northern Kenya. Nomadic Peoples. 23(1): 78‐105.

Roba, G.M., Lelea, M.A., Hensel, O., Kaufmann, B., 2018. Making decisions without reliable information: The struggle of local traders in the pastoral meat supply chain. Food Policy 76, 33–43.

Roba, G.M., Lelea, M.A., Kaufmann, B., 2017. Manoeuvring through difficult terrain: How local traders link pastoralists to markets. Journal of Rural Studies 54, 85–97.

Our team welcomes questions, comments or article requests:

My email: m.a.lelea@ditsl.org

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apl. Prof. Dr. Brigitte

Kaufmann

Dr. Guyo Malicha

Roba

Prof. Dr. Oliver

Hensel

Dr. Margareta Lelea