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Ii. Livestock Marketing 48418 Public Disclosure Authorized Support From: SUDAN MULTI-DONOR TRUST FUNDS MDTF-National Sector Policy Note Livestock Marketing in Eastern and Central Sudan Public Disclosure Authorized Babiker Idris Public Disclosure Authorized December 31, 2007 Multi Donor Trust Fund-National Technical Secretariat The World Bank Khartoum Public Disclosure Authorized MDTF Donors: SUDAN MULTI DONOR TRUST FUNDS MDTF-National Sector Policy Note Livestock Marketing in Eastern and Central Sudan Babiker Idris Multi Donor Trust Fund-National Technical Secretariat The World Bank Khartoum ABBREVIATIONS AND ACRONYMS AOAD Arab Organisation for Agricultural Development ARSC Animal Resources Service Company CPA Comprehensive Peace Agreement FAO Food and Agricultural Organization FNC Forest National Corporation FOB (also f.o.b.) Free on Board DTIS Diagnostic Trade Integration Study GAC Gum Arabic Corporation GDP Gross Domestic Product GNU Sudan Government of National Unity GOS Government of Sudan HPS Hand Picked Selected IFAD International Fund for Agricultural Development JAM Joint Assessment Mission JECFA Joint Expert Committee on Food Additives MDTF Multi-Donor Trust Fund MDTF–N Multi-Donor Trust Fund - National MDTF–S Multi-Donor Trust Fund - South MFNE Ministry of Finance and National Economy (GNU) MFT Ministry of Foreign Trade (GNU) MT Metric Ton OC Oversight Committee RVT Rift Valley Fever SC Sudan Consortium SDD Sudanese Dinars SDG Sudanese Pounds SPLM Sudanese People Liberation Movement SR Saudi Riyal SSA Sub-Saharan Africa TLU Tropical Livestock Unit TS Technical Secretariat WB World Bank WHO World Health Organization i TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS........................................................................................ i PREFACE...................................................................................................................................... iv ACKNOWLEDGEMENT ...............................................................................................................v Domestic Supply and Demand................................................................................................2 Export Supply and Demand....................................................................................................2 Export Supply and Demand....................................................................................................3 Export Markets for Sheep and Goats......................................................................................3 The Saudi Live Sheep and Goat Market.................................................................................4 Domestic Livestock Marketing...............................................................................................5 Market Access and Transportation Costs .............................................................................10 The Division of Labour within the Market Channels ...........................................................11 Market Flows ........................................................................................................................11 Livestock Flows in Gedarif Market ......................................................................................11 Marketing Costs and Margins...............................................................................................12 Internal Trade Financing.......................................................................................................14 Transportation.......................................................................................................................16 Veterinary Services...............................................................................................................18 III. CONCLUTIONS ....................................................................................................................20 IV. RECOMENDATIONS ...........................................................................................................22 REFERENCES ..............................................................................................................................24 List of Tables Table 1: Sudan - Live Sheep Exports by Market............................................................................ 4 Table 2: Sudan - Mutton and Lamb Exports by Market, 2002-2005.............................................. 4 Table 3: Sudan - Marketing Margins between Producers and Butchers....................................... 12 Table 4: Sudan - Summary of Sheep Marketing Costs................................................................. 15 Table 5: Sudan - Cost Comparison between Trucking and Trekking of Sheep from ElObeid to Omdurman….………………………………………………………………….16 Table 6: Price Correlations between Markets............................................................................... 17 Table 7: Johansson's Lamda - Max Test for Cointegration among Sheep Markets ..................... 18 ii Annexed Tables Table A. 1: Animal Resources Share in GDP, 2000-2004 ........................................................... 28 Table A.2: Livestock Consumption Estimates, 2000-2004 .......................................................... 28 Table A.3: Livestock Off-Take Estimates, 2000-2004................................................................. 29 Table A.4: Live Sheep and Goat Imports to the Middle East....................................................... 29 Table A.5: Sheep and Goat Meat Imports to the Middle East...................................................... 30 Table A.6: Imports of Live Sheep to Saudi Arabia by Country ................................................... 31 Table A.7: Imports of Sheep Meat to Saudi Arabia by Country, 2000-2003, .............................. 32 List of Figures Figure 1: Sheep Sales – Omdurman Terminal Market, 1995-2004................................................ 2 Figure 2: Livestock Marketing Channels........................................................................................ 7 Figure 3: Terms of Trade between Sorghum and Sheep, Gedarif Market, 2002-2005 ................ 14 Annexes Annex I: Commissioner General Order & Translation…………………………………………..25 Annex II: Livestock Statistics …………………………………………………………………...27 iii PREFACE More than 80 % of the total population is dependent on rain-fed agriculture and related activities. Majority of the farmers are subsistence farmers and animal husbandry is a significant diversification strategy to mitigate crop failure and an income strategy to meet the household’s needs beyond cereals. Livestock is the second most important foreign exchange earner after petroleum products in addition to providing manure for soil fertility, and power for tillage, cultivation, and transport. Given its relative importance to the economy of Sudan, this policy note is intended to identify the key factors constraining livestock marketing. The policy note focused on the role of the public sector to improve livestock marketing. The note’s three main recommendations are; (a) provision of matching grants to livestock exporters for promotion of Sudanese products, for capacity building among exporters and trader organizations and for introducing meat cuts and packaging technology to enable exporters to penetrate this section of the market; (b) public sector to invest in road infrastructure for facilitating and reducing costs of transport of live animals, and (c) on taxation: (i) eliminate internal taxation by localities being careful to distinguish between quarantine and market operation fees and taxes, (ii) eliminate the localities’ share of the market fees, (iii) enforcement of the Council of Minister’s Decree of May 2006 which abolished all tax collection points on highways and amendment of the decree to include tax collection points along livestock routes; and (iv) transfer sufficient income from the central Government to the states and localities to compensate them for their respective losses of livestock tax income including the localities’ share of the market operation fees. The recently approved MDTF-N – Improving Livestock Production and Marketing Project- A Pilot, has taken into account the first recommendation and will build the capacity of exporters and traders through improved market infrastructure and information dissemination to both producers and traders. On the second recommendation, there are already on-going efforts by the GoNU to improve road infrastructure in the country. There are a number of issues on livestock marketing that would benefit from further investigation. These include a review of the experience in the implementation of the various decrees which have been issued with respect to eliminating taxation at the local and state level and a rigorous value chain analyses for livestock products. The importance of livestock sector to the subsistence farmers and to the economy of Sudan cannot be underestimated and efforts should be made to ensure continuation and improved efficacy of marketing livestock products. Elsheikh M. Elmak Corina van der Laan Chair of MDTF-N Oversight Committee Co-chair of MDTF-N Oversight Committee iv ACKNOWLEDGEMENT This policy note is a product of the Multi-Donor Trust Fund - National. This is one of the two trust funds established under the authority of the Comprehensive Peace Agreement (CPA) which was signed in January 2005. The trust funds which assist the Government of National Unity and the Government of Southern Sudan are both administered
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