The government is considering a ban on live goat and sheep exports in a bid to encourage exports of processed meat and to ensure quality.
To implement this, the Meat and Dairy Industry Development Institute, an office established to oversee the livestock business under the Ministry of Industry, is drafting a proclamation that is expected to be implemented by the end of the current fiscal year.
“Eventually, the ban will include the export of live camels and cattle,” Haileselassie Weres, director of the institute, told Fortune.
Before presenting a draft of the proclamation to parliament for adoption, it will be put up for discussions at the ministries of Agriculture & Natural Resources, Industry and Trade, the Ethiopian Chamber of Commerce & Sectoral Association and the Livestock Exporters Associations, according to Haileselassie.
Although Ethiopia is one of the leading countries in livestock resources, it has failed to capture its commercial and market potential.
During the past fiscal year, the country earned 192.7 million dollars in exports from livestock, mainly sending animals to Saudi Arabia, Qatar, Kuwait, United Arab Emirates and other north African countries. However, this export figure is far below the 350 million dollars in revenue targeted by the government.
The size of the revenue generated is not considered satisfactory considering the large livestock population found in Ethiopia. The country tops Africa in livestock resources and ranks fifth in the world with 59.5 million cattle, 30.7 million sheep, 30.2 million goats and one million camels.
Illegal trade and smuggling into neighbouring countries, inadequately organised domestic and export market chains, cattle health, fodder shortage, gaps in the value chain and processing are major reasons cited for the underperformance of the industry, according to different studies.
The proposed government ban on livestock export is expected to encourage exporters to switch to processed meat, according to Fikadu Getachew, director of Livestock Marketing at the Ministry.
There are 12 companies that process and export meat operating in Ethiopia as listed by the Ethiopian Meat Producer-Exporters Association. The country also has 14 meat export abattoirs.
Exporters are not cheering the government’s proposed ban.
“Our business will be put at risk,” said Andargachew Gashaw, general manager of Hermaed Trading Plc, one of the livestock exporter companies.
As an alternative to the proposed legislative action of the ban, the Institute is considering the preparation of a circular letter approved by the Prime Minister that will be distributed to the different stakeholders, according to Haileselassie.
Applauding the move in promoting value addition, Gemechu Desta, an economic development consultant with 15 years of experience working in Ethiopia and Germany, challenges the rationale on quality protection.
“Loose regulatory methods caused quality problems,” said Gemechu. “By working on the regulatory side, quality can be maintained,” he added.
Beyond the ban, value addition on meat products through processing will help set favourable prices in the global market and help the country increase the revenues it currently receives from live animal export, according to an expert with two decades of specific experience in agriculture.
“Having a powerful negotiating power in the global market would help the country increase its export revenues,” he told Fortune.
By the end of the second edition of the Growth & Transformation Plan, the country plans to produce 2.1 million tonnes of processed cattle, goat, camel and poultry meat.
The livestock business in Ethiopia contributes about 16.5pc of overall GDP. Within the agricultural segment of GDP, livestock represents 35.6pc. The contribution of livestock to the overall export earnings of the nation is 15pc, and livestock represents 30pc of all employment in the agricultural sector.
Last December, the World Bank pledged 170 million dollars for the implementation of Livestock and Fisheries Sector Development Project. The Project was launched in 58 weredas in six regional states of the country and is expected to benefit 1.2 million farming households dependent on livestock rearing and fishing.
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