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ABSTRACT
During 2014–2019, cattle exports from Ethiopia declined more than 95 percent. This trade depends largely on Borana pastoralists of southern Ethiopia and a credit system of deferred payments. The article asks: How did the deferred payment system contribute to the collapse of the trade? It argues that credit defaults ripple through the entire value chain and help to explain the export collapse. By examining how the circulation of credit and debt in the cattle export business disadvantages pastoralists and local traders, the article demonstrates how a once booming trade was undermined by its own contradictory processes and unequal relationships.
Acknowledgements
The research reported in this article was conducted under the ‘Climate-induced vulnerability and pastoralist livestock marketing chains in southern Ethiopia and northeastern Kenya (CHAINS)’ study funded by the Innovation Lab for Adapting Livestock Systems to Climate Change (ALS-CC) Collaborative Research Program based at Colorado State University (USAID grant number EEM-A-00-10-00001). We are very grateful for the support of our colleagues on the study, especially Polly Ericksen, Uriel Kitron, Hussein Mahmoud, Dejene Negassa Debsu, Workneh Negatu, and Carla Roncoli. However, the views expressed herein are those of the authors and do not necessarily reflect the views of these individuals or organizations.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Borana are the ancestors of the larger Oromo group and known for their indigenous socio-political institution called the Gada system. They live in southern Ethiopia and northern Kenya and are mainly cattle pastoralists, although small stock (sheep and goats) and camels are increasingly important (see Bassi Citation2005; Legesse Citation1973).
2 The Boran breed is highly valued by exporters because of its good body conformity, capacity to gain weight quickly, and quality of its beef products (Brasesco, Asgedom, and Sommacal Citation2019; Teklebrhan and Urge Citation2013). Boran cattle fetch relatively favorable prices on international markets where there is ‘a clear preference for the Boran breed (Brasesco, Asgedom, and Sommacal Citation2019, 12).’
3 Oromia is the regional state where Borana Zone is located.
4 Livestock brokers are common throughout the Horn region and in the Somali areas they are referred to as dilaal (Little Citation2003; Ng’asike, Hagmann, and Wasonga Citation2021). In the past dalala in Borana were usually Somali or Burji who often apprenticed for several years before becoming a broker. Now many dalala in Borana are young unemployed Boran and the profession is increasingly without many controls on entry, especially in smaller markets.
5 The practice of partial payments in food commodities is changing as a Saudi Arabian livestock company now operates the quarantine yard at Berbera port, Somaliland, the state’s largest port for livestock exports, and it pays cash to Somali exporters before the animals are shipped (Musa Citation2019). Although the practice of cash payments has reduced payment defaults and is a positive development, the presence of a large Saudi firm has concentrated market power and reduced livestock prices and entry to the trade for local Somalis (27–28).
6 Informal cross-border trade, of course, is a form of export trade, but in this case the trading enterprises that participate have more in common with domestic than export enterprises.
7 A marker is an individual at markets who for a small fee paints the symbol – often initials – of the buyer on purchased animals; a trekker moves animals on foot from the point of purchase to another market or between markets; a truck transporter moves with a truck transporting animals and assists the driver and handler; and a handler also goes with the truck to keep animals under control and herd and water them during stops.
8 The effectiveness of many of these public investments is questionable. For example, the modern market yards with fenced off areas for sales and water infrastructure were often not used by traders and in poor repair within a few years. Moreover, one of the largest and most expensive quarantine stations at Mille near the Djibouti border was still barely operational in 2021 after more than eight years of planning and construction. Many traders complained that the government never sought their opinion about these investments, and they especially questioned the wisdom of building an expensive quarantine yard at Mille when it was apparent that the Djibouti port would require a second quarantine period for animals arriving overland from Mille.
9 Desta and Coppock document the steady decline in average per capita livestock holdings among the Borana since the 1980s, while others highlight the general poverty trends in the area (Desta and Coppock Citation2004; Tache and Oba Citation2010; McPeak, Little, and Doss Citation2012).
10 This calculation compares our recent household data with those of the earlier Pastoral Risk Management in East Africa (PARIMA) project, some of which is presented in McPeak, Little, and Doss (Citation2012) and Little et al. (Citation2008).
11 Ng’asike et al. point to a similar case in northeastern Kenya where young unemployed Somalis increasingly engage in small-scale livestock brokering as a survival strategy (Citation2021, 6–7). Additional research is sorely needed on labor informality among pastoralists, especially youth, which was beyond the scope of our study.
12 There also is a regional market for oxen as plow animals, but this trade is very different than the others and focused on mixed breed, older cattle, rather than prime Boran cattle. It was not addressed in this study.
13 Mariam et al. reported in 2013 that ‘several exporters have legal cases against them (related to tax evasion) for exporting below the ‘average’ price that the National Bank determines (Mariam et al. Citation2013, 15).’ The same study also indicates a required minimum weight (325 kg) per bull was required to obtain an export license from the government, and that a ‘basement price’ of US$ 500 was being enforced at the time (15). Clearly there is ambiguity surrounding official livestock export policy, but exporters we interviewed operate on the basis that exporting bulls of at least 325 kg or more was a way to minimize government scrutiny when navigating the different check points and required permits to move animals the approximate 800 km from Adama to the port of Djibouti.
14 Key secondary markets in Borana include Harobakke and Dubuluq. The former settlement was a small bush (tertiary) market in Borana as recently as 2000, but grew to be the second most important market for the export trade by 2013.
15 One Tropical Livestock Unit (TLU) = 1 cattle, 0.7 camel, or 10 small stock (goats and sheep).
16 This represents the percentage of the herd that is marketed annually.
17 Mahmoud’s (Citation2008) work on cattle trade from the Ethiopia/Kenya border to the Nairobi market, which is controlled by powerful meat wholesalers, is instructive here. The study shows that because of lengthy payment delays and frequent defaults many border traders work with a partner in Nairobi whose main job is to collect on payments and debts.
18 Average profits per TLU sold were estimated at 12 percent and total average annual sales were calculated at $28,475 with net returns of about $3,417 for quartile I and II traders.
19 There has been growth in camel trade but much of this activity entails non-Borana actors. Frequently the animals are sourced from Somali Regional State or across the border in northeastern Kenya. There is a strong preference in the export trade for the large Somali camel rather than camels produced in Borana.
20 Further evidence of the increased significance of small stock exports is that Borana pastoralists are now accustomed to selling small stock on a per kilogram basis, which is how the export abattoirs and small stock exporters purchase their livestock. More than 80 percent of pastoralist households indicate that when they sell small stock the buyer now uses a weigh scale.
21 A few exporters also spoke about gaining access to foreign exchange as an advantage of the export over domestic trade unrelated to price. This edge is probably even greater today since the current political turmoil and conflict in Ethiopia is likely to have made access to foreign exchange especially difficult for the private sector.
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Waktole Tiki
Waktole Tiki received his BA in Sociology and Social Administration from Addis Ababa University, MSc in Natural Resource Management from Egerton University, Kenya, and PhD in Environment and Development Studies from the Norwegian University of Life Sciences. He had been teaching at Hawassa University, Ethiopia, before moving to his current job at Tetra Tech ARD. His research works focuses on pastoral risk management, pastoral livestock marketing risks, climate change, indigenous knowledge, natural resource management, conflict, and conflict resolution. Waktole has published several articles in peer-reviewed journals, including Historical Geography, The Geographical Journal, Human Ecology, Journal of East African Studies, Nomadic Peoples, and Journal of Borderlands Studies.
Peter D. Little
Peter D. Little is the Samuel Candler Dobbs Professor of Anthropology and Director of the Global Development Studies Program, Emory University, USA. He has conducted studies of political ecology, pastoralism, poverty and inequality, informality, contract farming, and development in Africa, especially Kenya, Somalia, and Ethiopia. Dr. Little is the author of Economic and Political Reform in Africa: Anthropological Perspectives (Indiana), The Elusive Granary: Herder, Farmer, and State in Northern Kenya (Cambridge), and Somalia: Economy without State (Indiana/James Currey), as well as the co-editor of six books, including Living under Contract: Contract Farming and Agrarian Transformation in sub-Saharan Africa (with Michael Watts) (Wisconsin).