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IMUOGROW DATA NM T ,.o. WUiirn AND SUN,,,M.,~rn (tW - I EW-AAJ-28_+ hLOO-0OOO-G 204 The economics of cattle and meat marketing in Ivory Coast ,PIRIOKAL AUNSM (Is"! Staatz, Ja M. ".CORPORAT. A-iDR, S (10i) Mich. Univ. Ctr. for Research on Economic Development 6. DOCUMENT DATE (110) NUPj 07.OV PAGES (120) 8. ARC MNM (170) 1979 617p. 1V338.1762. S775 9. REFERENCE ORGANIZATION (130) Mich. 10. SUPPLEMENTARY NOTES (500) 11. ABSTRACT (950) 12. DM.SCI JTORS (920) 1&roWT Ntn"Im (I") Ivory Coast Meat Cattlei Cattla marketing Supply Transportatlt n I4L IONTRAtr 1M1 f*) I CONTRACT Infrastructure Prices AID/afr-C-1169 TYM(140 Cost analysis Policies - Ag.:icultural ecoromics IT.TY1WI1 DOCOEIW (3I5 21 THE ECONOMICS OF CATTLE AND MEAT MARKETING IN IVORY COAST by John M. Staatz Research Associate Center for Research on Economic Development University of Michigan Chercheur Associ6 Centre Ivorien de Recherche Economique et Sociale Universit6 Nationale de C6te d'Ivoire 6 9 AID/afr-C-tI (1979@ 10R WORD Traditional marketing systems for agricultural products in developing nations have often been accused of driving an unnecessarily large price differential between producers and consumers to the detriment of both. Some critics claim there are too many marketing agents forcing too many intermediate transactions. Others argue that small numbers of traders collude'to exercise oligopsonistic power over producers and oligopolistic power over consumers. Marketing agents are frequently labeled as parasites who serve no useful function. Many developing nations have responded to these criticisms with strict regulation or complete take-over of agricultural marketing. Unfor tunately the government-run system usually does not function so well as its predecessor. Furthermore, the few marketing studies that have been done in Africa and Asia tend to reveal that traditional systems operate relatively efficiently given the available physical infrastructure. John Staatz's monograph on Ivory Coast livestock and meat marketing is an important addition to the small body of detailed empirical work that addresses the commonplace critiques of traditional marketIng systems. His study extends the earlier work by looking at a commodity that raises several potential difficulties for traders because it is first alive as livestock and then highly perishable as meat. The West African livestock trade also pro vides new insights because it covers such long distances, is international, and involves credit and trust relations between people of different ethnic groups residing far apart under different legal jurisdictions. Staatz finds that for the most part the traditional system handles these complex marketing challenges efficiently. and that the best role for government is improvement of physical infrastructure rather than regulation or replacement of marketing agents. Analysis of market structure, conduct, and performance among long distance traders, intermediaries, and butchers reveals fairly low concentration levels, no overt collusion, and modest net margins and rates of return to capital. Staatz discourages proposed government regulation of marketing agents because this is likely to reduce the number of agents and thereby foster collusion. Perhaps moreso than in most similar studies, Staatz specifically inves tigates ways in which government assistance could facilitate marketing. His detailed analysis of potential improvements in physical infrastructure should be an important input to decision makers in the Ivory Coast and perhaps for other nations with similar systems. The comparisons of capital intensive versus labor intensive abbatoirs, trekking versus train and truck for live stock transport, and slaughter near production ratt 7 than near consumption bear critically on numerous projects contemplated or in process. Staatz's work on these and similar infrastructure issues clearly indicates useful directions for interventions by donors and domestic agencies. His analysis of the economic activity of traditional marketing agents significantly adds to our understanding of this sector in developing nations, and concurs with several earlier studies in finding a relatively efficient system, given physical constraints, and no justification for major regulation or take over by government. This monograph is part of a three-year study of West African livestock economics undertaken by the Center for Research on Economic Development, University of Michigan, for the United States Agency for International Devel opment under Contract AID/afr-c-1169. The full study consisted of four eighteen-month field studies, including Staatz's, two focusing on production and two on marketing, in addition to several investigations based on the existing data and literature. The geographic area of focus involved the five member states of the Conseil de l'Entente, Ivory Coast, Togo, Benin, Niger, and Upper Volta, but also included, in a more general fashion, Mali and Nigeria. The following documents have been produced as a result of this study: K. Shapiro, ed., Livestock Production and Marketing in the Entente StaLes of West Africa: Summary Report. (This volume contains an overview plus separate summaries of each monograph.) A. Ergas, ed., Livestock Production and Marketing in the Entente States of West Africa: Annotated Bibliography. (Included as part of the summary report.) MONOGRAPHS: Delgado, C., Livestock versus Foodgrain Production in Southeast Upper Volta: A Resource Allocation Analysis. Staatz, J., The Economics of Cattle and Meat Krketing in Ivory Coast. Eddy, E., Labos and Land Use on Mixed Farms in the Pastoral Zone of Niger. Herman, L., The Livestock and Meat Marketing System in Upper Volta: An Evaluation of Economic Efficiency. WORKING PAPERS: 1. Ferguson, D., A Conceptual Framework for the Evaluation of J1ivescock Pro duction Development Projects and Programs in Sub-S4haran West Africa. 2. Wardle, C., Promoting Cattle Fattening Amongst Peasants in Niger. 3. Swift, J., West African Pastoral Production Systems. 4. Sleeper, J., An Economic Anal sis of the Role of Ox-Plowing and Cattle- Feeding in the Stratification of West Airican Livestock Production. 5. DeBoer, A.J., The Short Run and Long Run Position of Australian Beef SuRp :.: the Competitiveness of Australian Beef in International Trade. 6. Porter, R., The Uses of Economic Models in Analysis of the Cattle Sector. These documents are available from the United States Agency for Interna tional Development, Bureau for Africa, Office of Development Resources (AFR/DR), New State Department Building, Washington, D.C. Some may be available from the Center for Research ou Economic Development. The monographs and the summary report are also available in French. Ann Arber, Hichigan Kenneth Shapiro March, 1979 Project Director TABLE OF CONTENTS Page FOREWORD LIST OF TABLES LIST OF ILLUSTRATIONS PREFACE i NOTES ON TERMINOLOGY AND THE VALUE OF THE CFA FRANC ix LIST OF ACRONYMS x Chapter PART I: IVORY COAST'S MEAT SUPPLY 1 THE MEAT SUPPLY IN IVORY COAST: RECENT EVOLUTION AND CULRIENT TRENDS . ... .1 The Ivorian Market for Meat . 1 Demand for Animal Protein in Ivory Coast ........ 3 Population Growth . 3 Urbanization ................... 5 Changes in Real Income and its Distribution . • 11 The Ivorian Red Meat Supply . .. .... 15 Domestic Livestock Production . & 16 Imports of Livestock....... 23 Imports of Fresh, Chilled, and Frozen Meat . .. 35 The Ivorian Red Meat Supply: A Summary . 50 Per Capita Meat Conewption ........ .... 54 Per Capita Beef UL'nsumption by Region ....... 56 Government Livestock Development Projects and the Future Role of Cattle Imports .... , , . 62 Chapter 2 FLOWS OF TRADE CATTLE IN IVORY COAST. * * . 73 Flows of Trade Cattle in Ivory Coast . 73 Seasonality of Cattle Flows ... *.. * . .. .,. 78 Recordd Imports ........ .. 79 Recorded Slauahter ... .. 86 Types of Cattle Markets in Ivory Coast ......... 91 Chapter PART II: THE ORGANIZATION OF CATTLE AND MEAT MARKETING 3 THE STRUCTURE OF CATTLE AND MEAT MARKETS: PART I . 93 Introduction ......... ........................ 94 Cattle Merchants ....... ................... 95 Merchants Based in Northern Exporting Areas . .. 96 Merchants Based in Bouak6 and Abidjan . .. 97 Chapter Page Intermediaries ..................... 102 Taxonomy . ... ....... ..... 103 Background and Activities of Abidjan and Bouak6 Intermediary-Landlords. .... .. 109 Landlords and Credit ..... ..... ........ ... 113 Market Concentration Aiong Intermediaries . .. 124 Possible Abuses by Intermediaries ............. 134 4 THE STRUCTURE OF CATTLE AND MEAT MARKETS: PART 2 . 141 Types of Butchers in Ivory Coast ... ............ 142 The Wholesale Trade in Frozen and Chilled Beef . 143 The Wholesale Trade in Fresh Beef .......... 145 Market Concentration Among Butchers . 146 Licensing Requirements .. ......... 147 Capital Requirements for Butchering . ... 148 Interview Data .. ...... .......... 149 Retail Butchers ... ........ ..... , . 167 Class i Retailers. ...... ..... .. 167 Class 2 Retailers. #.. *..... 168 Apprentice Butchers . e 9 . * * a 169 Employment Generated in Cattle and Beef Marketing . 171 Differences in Market Structure Between Abidjan and Bouakf . 174 PART III: PROBLEMS OF TRANSPORTING CATTLE AND MEAT 5 TRANSPORTATION INFRASTRUCTURE FOR CATTLE AND HEAT . 178 Volume of Cattle Moved by Different Means of Transport . 179 The Available Infrastructure: Cattle Transport .. 182 Trekking ........... 182 Trucking ........ .. .. 184 Rail Transport . ... ...... 188 The Available Infrastructure: Meat Transport