Analysis of livestock marketing decisions among pastoralists in Il Ngwesi, Kenya

Katherine Lynn Baldwin, Purdue University

Abstract

Since colonialism, Western development workers have tried to solve the “problem” of African pastoralism. Efforts to change the pastoralist situation have ranged from promotion of sedentary agriculture to importation of European dairy cows. But these well-intentioned programs gave little in the way of results and oftentimes further impoverished the very people they were designed to help. ^ In the 21st century, pastoralism is still a hot-button issue for development economists, animal scientists, range ecologists, and veterinarians in Sub-Saharan Africa. Much of the failure in current programs as in those of yesteryear stems from a lack of understanding of pastoralist production systems and livestock marketing situations. Livestock are a main source of income for the pastoralist household, but they also serve as a store of wealth, food source, and status symbol. Recent literature on pastoralism recognizes this multifunctionality, as well as the wealth discrepancies within pastoralist communities. Because pastoralists depend on livestock for numerous reasons, animals are only marketed when the household needs cash to cover other expenses. Keeping this in mind, the most feasible way to increase pastoralist incomes is to raise per animal revenue instead of encouraging increased animal offtake.^ Towards this end, a study of livestock ownership and marketing patterns was conducted in Il Ngwesi, Kenya. Using this knowledge of the existing market chain, a stochastic expected profit maximization model was constructed to simulate the producer marketing decision-making process. The model chooses the optimal market after drawing expected prices and then picking the market which maximizes expected producer revenue according to those price draws. The model predicts both the percentage of Il Ngwesi sales for each destination market, as well as final producer revenues under a given scenario. ^ Using this market decision-making model, several policy scenarios were simulated, including reductions in market risk, decreased time costs for trekking, and increased prices at certain markets. While all policies shifted the priorities of which markets were utilized, not all had a statistically significant effect on profit per animal. Overall, it was determined that the policies which reduced market risk were most effective at improving producer income on a per animal basis.^

Degree

M.S.

Advisors

Kenneth Foster, Purdue University.

Subject Area

Economics, Agricultural

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