Factors influencing the pastoralists' livestock income

TABLE OF CONTENTS

DEDICATION

BIOGRAPHY

ACKNOWLEDGMENTS

ACRONYMS AND ABBREVIATIONS

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

APPENDIX

ABSTRACT

CHAPTER ONE
1. INTRODUCTION
1.1. Background
1.2. Statement of the problem
1.3. Research questions
1.4. Objectives of the study
1.5. Study hypothesis
1.6. Significance of the study
1.7. Scope of the study
1.8. Limitations of the study
1.9. Organization of the study

CHAPTER TWO
2. LITERATURE REVIEW
2.1. Definitions and Concepts
2.1.1. Pastoralist, livestock herds and income
2.1.2. Livestock income
2.1.3. Livelihood systems in pastoral areas of Ethiopia
2.1.4. Pastoral livelihoods in Oromia region
2.1.5. The Borana pastoralists livelihoods
2.1.6. Livestock production systems
2.1.7. Pastoralists and Livestock
2.1.8. The importance of livestock in countries economy
2.1.9. The challenges and constraints in livestock production systems
2.1.10. Classification of household income
2.1.11. The sources of household income and share of livestock income
2.1.12. Estimation methods of household income
2.1.13. The strength, weakness, opportunities and threats of livestock production
2.1.14. Theoretical literature on factors affecting household income
2.1.15. Empirical studies on factors influencing household income
2.1.16. Conceptual framework of the study

CHAPTER THREE
3. RESEARCH METHDOLOGY
3.1. Description of the Study Area
3.2. The Study design
3.3. Types and sources of data
3.4. Procedures and method of data collection
3.4.1. Sample procedure
3.4.1.1. Sample size determination
3.4.2. Method of data collection
3.4.2.1. Household survey
3.4.2.2. Key informants interview
3.4.2.3. Group discussion
3.4.2.4. Field observation
3.5. Methods of data analysis
3.5.1. Descriptive statistics
3.5.2. Multiple linear regression model
3.6. Definition of variables and working hypothesis
3.6.1. The dependent variable of the model
3.6.1. Explanatory variables

CHAPTER FOUR
4. RESULTS AND DISCUSSIONS
4.1. Results of Descriptive analysis
4.1.1. Demographic, socio-economic and institutional characteristics
4.1.1.1. Sex of the household
4.1.1.2. Age of the household heads
4.1.1.3. Educational level
4.1.1.4. Family size
4.1.1.5. Livelihood strategy
4.1.1.5.1. Why do pastoralists’ households diversify their activities?
4.1.1.6. Livestock price in the market
4.1.1.6.1. Reason for low market price of pastoral livestock
4.1.1.7. Livestock market participation
4.1.1.7.1. Inspirations for selling livestock
4.1.1.8. Livestock breed types
4.1.1.9. Livestock mobility
4.1.1.9.1. Households’ perception related livestock mobility
4.1.1.10. Total livestock compositions
4.1.1.11. Grazing land availability
4.1.2. Pastoralists’ household income sources
4.1.3. Households income
4.1.3.1. Household annual income from livestock production
4.1.3.2. Household annual income from crop production
4.1.3.2.1. The purpose of crop production
4.1.3.3. Household income from off-farm activities
4.1.3.4. Expenditure on production input
4.1.3.5. Pastoralists’ perception of income sources
4.1.3.6. The proportion of household wealth categories
4.1.3.7. Focus group discussion for factors analysis
4.1.4. The share of livestock income in to the total pastoralists’ income
4.1.5. SWOT analysis
4.2. Multiple linear regression for factors analysis
4.2.1. Factors affecting pastoralists’ livestock income model result

CHAPTER FIVE
5. CONCLUSIONS AND RECOMMENDATIONS
5.1. Conclusion
5.2. Recommendations

6. REFERENCE

7. APPENDICES

DEDICATION

This thesis is dedicated to my father Gebisa Degife Yadecha, he taught me that the best kind of knowledge to have is that which is learned for its own sake. It is also dedicated to my beloved mother Gadise Galan Korme; she taught me that even the largest task could be accomplished if it is done one-step at a time. I know they would never read it, but I will do my best to encourage them to think as they always learn. Their support was to different extents and along with many other.

BIOGRAPHY

The author was born in Dukem in 1989. He attended his primary education at Oda Nabe Elementary school and secondary education at Ada’a Model Secondary school and Bishoftu Preparatory school. Then he joined Adama University School of Business Administration, Management and Trade in 2007 and graduated with BA in Economics in July 10, 2010. He was employed in October 2010 in Oromiya road authority Borana Zone Dire district road and transport authority office on the position of Universal Rural Roads Access Program. From September 1, 2011, he was transferred to Borana Zone Road authority and served as planner on the position of planning, monitoring and evaluating expert until he joined the school of graduate studies for his master of science in Agricultural Economics at Dilla University in October 2014.

ACKNOWLEDGMENTS

It has become the willingness of God to successfully complete this thesis work. I therefore, praise God. The pastoralists of Yabello of Borana are the owners of the information presented within this thesis and thanks for none forgot able willingness in sharing their accumulated indigenous knowledge and open support in the case of survey data collection. I am grateful to thanks my advisor Negussie Zeray (Ph.D. Candidate) for his assistance in the production of this thesis. I would especially like to thank him for his constructive comments on all aspects of the work. The last but very important I would like to express my heartfelt appreciation and gratitude to my beloved wife Tihitina Muluhen for her grand support and encouragement and my best son Debi Soboka. The authors would like to acknowledge the Borana Zone Road authority and Dilla University for their financial support for education and for this research work. Finally yet importantly, I want to express my great thanks to my families for their encroachment while conducting the research.

LIST OF TABLES

Table 1: Population size in Oromia and Borana zone

2: Seasonal break down of Borana zone

3: Sample size by peasant association

4: Distribution of household livestock income by gender (ETB) (N = 120)

5: Age statistics of the household (N =120)

6: Distributions of livestock income by age level of households

7: Education status of the household and livestock income distribution

8: The relationship between household family size and livestock income (ETB)

9: Livelihood strategy choice and annual livestock income (ETB)

10: Household livestock price in the market (ETB)

11: Household market participation and annual livestock income (ETB)

12: Livestock production output and income received with market participation

13: Mean of livestock sold by household head (N = 120)

14: Annual income of adopt and non adopt improved breed type (ETB)

15: Effect of livestock mobility on household livestock income (ETB)

16: Households perception related livestock mobility

17: Distribution of livestock ownership in tropical livestock unit (TLU )

18: Relationship between livestock holding and mean annual livestock income

19: Grazing land availability and livestock income (ETB)

20: Distribution of household income by sources in last 12 months (N= 120)

21: Livestock income derived from livestock production (ETB) (N=120)

22: Livestock income distribution by peasant associations (ETB)

23: Share of mean in livestock income by peasant associations

24: Total mean annual crops production (Kg)

25: Total mean annual cropping income (ETB)

26: Purpose of crop production

27: Households annual expenditure on livestock inputs

28: Household annual expenditure on crops input

29: Pastoralists’ perception on income sources

30: Wealth categories of the pastoral economy in the district

31: Pair wise ranking of factors influencing livestock income

32: Survey data results for factors influencing livestock income

33: Households participations by activity (N = 120)

34: Share of livestock income in total pastoralists’ income (’share of mean’)

35: ‘Mean of shares’ of livestock income in total pastoralists’ income (N= 120)

36: SWOT analysis of livestock rearing in Yabello district

37: Determinants of livestock income (Log)

LIST OF FIGURES

Figure 1: Classification of household income source

2: Measuring total household income

3: The livestock value chain SWOT analysis in Ethiopia

4: SWOT analysis of cattle keeping in Khmer community

5: Conceptual Framework of the Study

6: Map of the study area

7: Gender distribution of the household heads

8: Distribution of household heads by education level

9: Distribution of household family size

10: The reasons the household sold livestock

11: Animal feed practice in Yabello district

12: Normal P-P plot of the standard residual for linearity assumption

APPENDIX

Appendix 1: Conversion equivalents of Sub-Saharan Africa Livestock into TLU

2: Conversion factors to estimate Adult- Equivalent (AE)

3: Estimated crop price

4: Test of linearity Assumption

5: Test for heteroskedasticity

6: Omitted variable test

7: Link test (Model specification test)

8: Tests of endogeneity

9: VIF of continuous variables

10: Contingency coefficient between dummy variables

11: Animal feed practice in Yabello district

12: The reasons the household sold livestock

13: Average daily milk production and average lactation period

14: Average producers' prices of livestock in Borana Zone by district

15: Survey questionnaire on pastoral livestock income

ACRONYMS AND ABBREVIATIONS

Abbildung in dieser Leseprobe nicht enthalten

FACTORS INFLUENCING THE PASTORALISTS’ LIVESTOCK INCOME: THE CASE OF YABELLO DISTRICT OF BORANA ZONE OROMIYA REGION, ETHIOPIA

ABSTRACT

T his study assesses the factors influencing pastoralists’ livestock income in Yabello district in Ethiopia. The study employed primary data collected through household surveys. The 120 respondents were participated in the survey process those culled utilizing systematic random sampling procedures. A multiple linear regression model and descriptive statistics analysis were acclimated to find the result of the study. Livestock plays a significant role in the pastoral economy of Yabello. Most of the sample households’ income source comes from livestock production, crop production and off-farm activities. The prominent result is that livestock production is the largest source of income for the sample household in Yabello. The total household farm income, which is a contribution of income from livestock and crop production, contributes the highest share in total household income in the study area. The statistical descriptive analysis indicated that livestock income was significantly associated with household age, family size, livelihoods choice, market price, and livestock holding of the household heads. The regression model also shows the factors that determine livestock income of the household heads in the study area was family size, livelihood strategy, livestock sales, livestock market price, pastoral extension agent contact and breed type was statically significant at 1% probability level. Livestock disease, drought and conflict risk was statically significant at 5% probability level. The study suggests that these pastoralists’ livestock income-influencing factors should be cautiously incorporated in pastoral development policies in order to ameliorate the pastoral household’s livestock income in the study area.

Key Words: Pastoralists’, Source of income, Livestock income, Yabello, Borana Zone

CHAPTER ONE

1. INTRODUCTION

1.1. Background

Agriculture is the main economic pillars of the Ethiopian economy and the overall economic growth of the country is highly dependent on the success of the agriculture sector. The sector represents 42% of the GDP of the country and about 85% of the population gains their livelihood directly or indirectly from agricultural production (CSA, 2015). The livestock sector plays multiple roles in the country‘s rural economy. With a stock of 42 million cattle and 46 million sheep and goats, Ethiopia has the largest livestock sector in East Africa. More than 60% of the cattle are raised in the highland area, following a typical mixed crop- livestock system, and 60% of the sheep and goats are raised in the lowlands, which are dominated by pastoral systems. Live animals, especially cattle, are the most important source of cash income for many farmers (Diao et al., 2010). In the highland agro-ecology of the country where crop-livestock system dominates, livestock is an essential component of the overall farming system and contributes up to 87% of the cash income of smallholders (NABC, 2010). In the pastoral and agro pastoral areas, livelihoods of society entirely depend on livestock and livestock product (Malede, 2013). Studies by ILRI (2008) showed that food- secure households were associated with high livestock asset ownership, indicating that increased cash incomes primarily came from livestock, through the sale of live animals, milk, meat, hides and skins.

According to Adugna (2012), Ethiopia’s share of livestock income at community level falls into three brackets, namely less than 25%, between 26-75%, and more than 76%, considered as highly, moderately and less diversified households in terms of income source. This suggests that livestock remains the single most important source of livelihoods in Ethiopia and in the Borana pastoral households. The contribution of livestock to agricultural GDP in Ethiopia is the most commonly quoted single measure of livestock’s contribution to the overall national economy. The gross value of 12 categories of ruminant livestock product output totaled 48.095 billion birr in 2008-09, an increase of about 47% over the gross value of ruminant production estimated according to MoFED’s set of coefficients and herd size estimates (Behnke, 2010).

Livestock production is very important to livelihoods for the Borana pastoral. Almost all households produced both large and small livestock. About 71% and 79% of these households consumed large and small livestock, respectively and about 60% of respondents reported selling large livestock (cattle), and 70% sold small livestock (sheep, goats, o r chickens). A large number of households (79%) also produced and consumed milk or other livestock products, and 40% sold livestock products (Solomon et al., 2011).

Livestock production predominantly forms the basis of the economy in pastoral areas of Borana. It is the main source of food as well as income to support the pastoralist's livelihood. The existing livestock production system in Borana is that often identified as transhumance system. Transhumance system featured by strategic seasonal movement of pastoralists along with their animal in search of pasture along with water source for human and livestock enable to cope up the effect of relatively longer dry period and returns back to their original place during the onset of rainy season (CARE, 2009). The Borana pastoral continue to rely on the livelihood, which are highly vulnerable. The probability of occurrence of drought remains high, while at the same time several factors are causing the weakening of traditional resource management institutions and mechanisms for coping with resource scarcity such as seasonal migrations. Privatizations and alienation of traditional rights of access to pastoral resources as well as restrictions of free movement in search of pasture and water are key threats to the continuation of Borana pastoralism (Baxter, 2001).

However, pastoral communities are marginalized and generally not given due consideration in wider socio-political analysis. Although the livelihoods of these communities are vulnerable to climate change, shifting global markets, population growth and increased competition for land and other natural resources, pastoralism remains a viable natural resource management system, and understating its rationale, importance and dynamics is a key element in efforts to reduce poverty (Rota and Sperandini, 2009). In addition to this agreement, the dynamics experienced in pastorals settings and uncertainties faced as result of risks makes sustainability in pastoralism appear like a mirage (Moritz et al., 2009). These is mostly attributed to the misinterpretation of sustainability in the pastoral context, high level of mobility of livestock alongside herders’ families and the need to keep the traditional pastoral cultures that make the issues pertaining sustainable pastoral frontier difficult to tackle (Ayantunde et al., 2011). Nevertheless, sustainable pastoral system especially amongst transhumant pastoralists is still attainable and it depends mainly on having a good knowledge of the challenges that they face. This challenge could also hinder investments, which are a necessary criterion for sustainability (Davies, 2008).

In general, from these and other evidence that are not state the pastoralist area in Ethiopia has numerous problems and constraints that are manifested by natural, human as well as topographic factors are the bottleneck for livestock development (Malede, 2013). Though, there is huge livestock resource in the pastoral communities of Ethiopia in general and pastoralists in Borana zone of Oromiya regions in particular, they are not economically benefited out of it in the extent at which ought to be. Consequently, their livelihood is vulnerable to different natural and artificial shocks. Supporting the pastoralists to engage in different income generating activities including marketing and processing of livestock products could be a means to build their resilience against the shock they are facing (CARE, 2009).

Pastoralism is therefore an economic and social system well adapted to dry land conditions and characterized by a complex set of practices and knowledge that has permitted the maintenance of a sustainable equilibrium among pastures, livestock and people (Rota and Sperandini, 2009). In general, the Ethiopian economy is chiefly subject to agriculture and vulnerable to several internal and external shocks such as frequent draughts, high population growth, low investment, and volatile primary product prices (Mengistu et al., 2013). Despite the fact that, much was thought about livestock production influencing factors. Still does not specifically studied about the livestock income determinants. Subsequently, it is imperative to embrace research on the factors influencing the pastoralists’ livestock income in Yabello, Borana zone Oromiya region.

1.2. Statement of the problem

Ethiopia is believed to have the most sizably voluminous livestock population in Africa. The total livestock population for the country is estimated to be about 53.99 million head of cattle, 25.5 million sheep, 24.06 million goats, 1.91 millio n horses, 6.75 million donkeys, 0.35 million mules, 0.92 million camels, 50.38 million poultry and 5.21 million beehives to be found in the sedentary areas of the country (CSA, 2013). This livestock sector has been contributing considerable portion to the economy of the country, and still promising to rally round the economic development of the country (CSA, 2013).

In spite of the enormous livestock resource and great potential for increased livestock production, the productivity is disproportional lower due to a number of dynamic economic, technical, policy and institutional challenges (Tesfaye et al., 2010). The subsisting income generating capacity of livestock and livestock products as compared to its immense potentials in the country has not been exploited. The primary reason among others seems to be the inefficient livestock and livestock product marketing characterized by high margins and poor marketing facilities and services. The price gap between terminal and primary markets seems to be too wide CSA (2006) as cited in (Woldemichael, 2008). The length and duration of mobility in a given year and the type and numbers of animals owned determine which livestock markets are accessed by pastoralists. Most poor pastoralists have access to bush or primary markets but they do not have regular access to high value secondary or terminal markets. Better-off pastoralists have access to secondary markets while absentee non-herders and investors also access terminal markets in a few cases (Yacob and Catley, 2010a).

The world of pastoralism is one filled with risks and uncertainties despite its immerse contributions to the livelihoods of many households and countries especially those in the developing world. Most developing countries are not well prepared to mitigate their effects. Therefore, when such disasters occur, pastoralists are face with the loss of their livestock, which is the main source of their livelihood (Abiodun, 2014). In addition to this problem , its contribution to the national economy is below the potential due to various factors including, feed shortage, poor genetic potential for productive traits, poor health care a nd management practices Zegeye (2003) as cited in (Solomon e t al., 2014).

Borana semi-arid climatic ecosystem determines two subsistence production systems in the area: Pastoralism and Agro-Pastoralism. Until recently, these two systems were the major source of subsistence and sustainable livelihoods for local community. A number of causal factors have undermined viability of these livelihood systems, such as recurrent drought, soaring food prices, conflict, declining natural resources base, reduced mobility, declining livestock terms of trade, HIV/AIDS pandemic, years of economic and political marginalization, breakdown of traditional structures and support systems causing a progressive decline of livestock and deterioration of livelihoods of the community. These endogenous and exogenous factors have posed a great challenge for the sustainability of pastoral areas and pastoral way of life (Jebessa and Zelalem, 2014). The Shortage of pasture and other constraints have challenged the pastoral production system and hence affected remarkable food availability at household level in particular and at community level in general in Borana pastoral (Ketema, 2015).

Animals contribute in many ways to household incomes and food security, as draught animals and through milk production. If slaughtered, the animal provides the family with meat and income from hides and skins. With this immense and potentially productive resource, with such influence on household incomes as well as the national economy, it is imperative for the Ethiopians to maximize the economic value of their animal assets, including the use of the animal for value integrated products. Yet by most economic metrics, this is not yet happening. Animals are not managed for high off-take or to maximize their value for meat production. Hides and skins are not adequately preserved for fine leather production or international competitiveness, nor are they effectively collected to reach the tanneries and eventual leather products manufacturing, milk productivity per cow is particularly low, and ineffectively marketed (AGP-LMD, 2013).

The Borana, though one of the major suppliers of livestock in Ethiopia, are not themselves major consumer of it. Borana pastoralism is basically a milk-dependent system though there is a prevailing tendency of a transition to cereal dependence predominantly as a result of livelihood deterioration. The deterioration in their livelihood conditions may have thus forced pastoral households to increasingly seek the procurement of cereal grains in favorable terms of trade with pastoral products in normal times (Wassie and Bichaka, 2010). What makes the deterioration in their livelihood condition and in forced them to diversify from livestock rearing to cereal product?, why Borana pastoral are not themselves a major consume of its product?, is the research gaps that need to determine the factor influencing livestock income.

Changes in the level of income and shifts in its composition will have considerable influencing on the nature of pastoralists demand for goods and services as a result of more encroachment into the exchange economy through involvement in non-traditional income generating activities in the Borana pastoralists. The monetization of the pastoral economy is strongly associated with the prevailing trend of the increasing household livelihood, which is fundamentally driven by crisis survival and accumulation motives. Income diversity, in turn, brings about consumption diversity and thus a higher demand for ‘’non-traditional’’ or ‘’imported’’ items (Wassie and Bichaka, 2010).

The income from pastoralism consists of the cash component (generated from live animal sales, earnings from milk off-take, miscellaneous income from another animal by product sales such as hides and skins), and the in-kind source. The in-kind component of pastoral household income consists of none marketed pastoral and farm outputs, inter-household in kind transfers and food aid. The cash component of pastoralist household income is similarly generated from pastoral and non-pastoral activities. The latter has become a growing source of pastoralist livelihood in recent years in Borana pastoral households (Wassie and Bichaka, 2010). In line with this, determining and identifying the pastoral income sources and the factors, influencing the livestock income will be sought to be important. Furthermore, if diversifying their livestock rearing practice shall increase household income and reduce risk due to livestock failure, overcoming the constraints and exploiting the potential opportunities is imperative. In the study district, much can be seen while pastoralists marvel here and there in searching of non-pastoral activities that supplement their livestock income. Though non– pastoral activity income can solve income liquidity problem and thereby used to sustain pastoralists’ life, their non-pastoral activities are really been a concession. Consequently, no access strip of the districts kept their hands off from stretching for food aid and relief.

The case study by Liao (2014) on rural resilience in Borana show that on the quote explain pastoralists’ contracting attitudes regarding whether livestock herding is the key for resilience. They showed as ‘’livestock herding is getting increasingly difficult’’. On one hand, they understand that the Borana rangelands are unsuitable for other purposes except livestock herding. Livestock are rooted on their culture, and are able to survive the droughts. On the other hands, the frequent drought and encroaching woody plants make livestock herding much more difficult. Such environmental challenges are the main push factors for pastoralists to leave the herding sector. The efforts of non-governmental organization and the government development agents to diversify pastoral livelihood serve as the pull factor to drag pastoralists out of livestock herding. They provided other possibilities to make a living, although there have not been tested through time yet (Liao, 2014). Therefore, simply taking pastoralist areas ‘’out of production’’ and dedicating them solely to other uses of which the lo ng-term socio- economic outcomes are significantly unpredictable-would undermine the agricultural-pastoral synergies that enhance both the values and benefits of each through complementary land use (Schlee, 2013).

Generally, livestock producers in Borana encounter a various livestock management problem, the prevalence of major endemic diseases, poor feeding and high stocking rate on grazing lands. Therefore, the contribution of this sector to the agricultural economy of the pastoral households remains lower. Hence, this study endeavors to fill the gap and it would be important and interesting to study and identify the factors that influencing the pastoralists’ livestock income and draw recommendation on how livestock producer in the Yabello district can reduce their vulnerability to factors affecting the livestock rearing and increasing livestock income.

1.3. Research questions

The major research question that was addressed to answer in this study includes:

- What are the different sources of household income for the pastoralists in the study area?
- How much is the share of livestock income activities in total pastoralists’ household income in the study area?
- What are the strength, weakness, opportunities and threats of the livestock producer in the selected district?
- Which factors influencing livestock income in the study area?

1.4. Objectives of the study

The main objective of this study was to analysis of factors influencing the pastoralists’ household income from livestock in Yabello district, of Borana pastoral, Oromia Region of southern Ethiopia.

The specific objectives of the study are to:

1. investigate the different sources of household income for the pastoralists in the selected district;
2. identify the share of livestock income in to the total pastoralists’ income in the selected
district;
3. assess the strength, weakness, opportunities and threats of the livestock producer in the selected district;
4. determine factors influencing livestock income in the selected district;

1.5. Study hypothesis

The study’s hypothesis on the determinants of pastoral livestock incomes in the areas of the study are developing in the consideration of the researcher past experience about the area and with reference to the literature. The null hypothesis of the study stated that there is no significant association between the pastoralists’ livestock income and factors influencing livestock income.

1.6. Significance of the study

The study was important in analyzing the determinants of pastoralist’s livestock income at household level in order to understand the factors responsible for livestock income variation among households. The aftereffects of this thesis would be applicable and help in managing proper arrangements with respect to the improvement of provincial pastoral in Borana. Notwithstanding this, there would be various reasons to think about the deciding elements influencing of livestock income in Borana pastoralists. To begin with, no exploration has done as such far to survey the common livestock income issues emerging in the zone. The yield of the study would be valuable to the formative associations and for rustic pastoralists in the prepared areas. It would highlight the various element influence the monetary estimations of pastoralists and give critical data to various partners. In addition to this, the study would fill the knowledge and information gaps that exist in the area of livestock income problems and economic benefits of pastoralists’. It trust that aftereffects of the exploration would have critical to give valuable data to get ready option job advancement program that would serve as a rule for intercession to recover pastoralists household income. The research work would likewise earth shattering in making benchmark data. In like manner, the discoveries of the study would lay cement in transit for different analysis that need to lead a point-by-point research on the influencing factors of livestock income.

1.7. Scope of the study

The study deals with a limited and selected sample pastoral household and search to examine factors that influencing pastoralists’ livestock income using primary and secondary dat a from the study district. To analyze the determining factors influencing of livestock income, the study were concentrate just on the one year income (gross annual income) from cattle, goats, sheep, camels, chickens and equines for the year of the survey (Apr. 2015–March. 2016). The study was spread the partial livestock income derived from sold live animal, livestock product, (milk, butter, skin and hides), slaughtered animal for home consumptions were embrace to compute annual income of the households. Both descriptive statistics and multiple regression models were use to analyze the data. The study was covers just four pastoral associations and one of the thirteen districts of Borana zone of the Oromia provincial state.

1.8. Limitations of the study

The thesis study was not, however, free from specific confinements. Pastoralist’s poor recording propensity on such variables as a volume of transaction, price of livestock and exchange expenses, represented a few issues that are not astonishing in information accumulation and association. It was likewise hard to record financial qualities of animal kipper. Nonattendance of past work on the subject and on the regions of the study, security issues, time, and spending plan requirements, cruel climatic conditions, poor base and logistics issues, were the point of confinement the extent of the research. Given the fact additionally, there are no adequate literature on the area of the study and absence of composed information. Getting the definite figure of livestock resources were troublesome. The respondents were reluctant in telling the genuine figure. In this way, these and other a few limitations were making the move back against meeting what was the study tending for.

1.9. Organization of the study

The proposition thesis research is separated into five chapters. Chapter one is encompassed of the background to the statement of the problem, research questions, objective of the study, hypothesis, scope, significant and limitation of the study. Chapter two comprise of the literature reviews on livestock income influencing factors, source of household income that is theoretical and empirical writing of related past studies, the SWOT analysis of livestock producers and reasonable system of the study. Chapter three of the thesis exhibits the methodology of the study that embrace of the study area, data source, method of data analysis. Chapter four presents the results and analyses and discusses the finding of the study. Finally, chapter five presents the conclusions and recommendations.

CHAPTER TWO

2. LITERATURE REVIEW

This chapter presents the review of the theoretical and empirical literature of the study at hand.

2.1. Definitions and Concepts

2.1.1. Pastoralist, livestock herds and income

Pastoralist: According to Krätli and Swift (2014), the term pastoralist can be used to indicate a cultural identity and a production/ livelihood system. This means that it can refer to people who practice pastoralism, those who share a pastoralist background or those involved in activities related to pastoralism.

A livestock herd: refers to those animals upon which a pastoral family depends and which they look after. Pastoralists keep several species of livestock including cattle, goats, sheep, camels, horses, reindeer and donkeys.

Farm income: is the income from the farm households own farm or rented in plot, which includes net income from crops and animals

Crop income: is obtained by subtracting gross costs from the volume harvested times median sales price at the regional level

Livestock income: consists of net income from sold live animals and both consumed and sold raw animal products. Net livestock income is obtained by subtracting gross production expenditure from the quantity of animals sold times producer median prices and the quantity of produced raw animals products time’s consumer median prices in the relevant region.

Gross annual livestock income: is limited to income from sale of livestock and livestock products, milk production in monetary term and value of slaughtered animals for consumption, due to difficulty of valuating other livestock products, by products, services and social values. Gross income of household is the sum of subsistence plus marketed production (Cossins and Upton, 1987).

Off-farm income: is the income earned from all source of excluded the income from the household’s own farm or rented in plot

Household income: consists of all receipts in cash, in kind or in services that are received by the household or by individual members of the household at annual or more frequent interval. Household income refers to income received either in cash or monetary income or in kind (Non-monetary income) by all the residents in a household. This includes all the income generated by other sources such as agricultural and non-agricultural activities, other monitory receipts (social protection transfers) such as pension, disability and relief payments, regular rental and remittance receipts and returns from businesses or investments and any other irregular gains such as compensations, lotteries (SDCS, 2013).

2.1.2. Livestock income

Livestock income represents the sum of net income from livestock transaction, income from animal rent, sale of animal products and imputed value of home consumption from livestock products (Dercon and Krishnan, 1996; Barrett et al., 2000). Additionally, Pica-Ciamarra et al. (2011b) defined livestock income as the value of sales and barter of livestock, plus the value of sales, barter and self-consumption of livestock products (such as milk, meat, eggs, honey, and so forth) minus the expenditures related to livestock production which, depending on the country, may include feed, labour and veterinary services. The livestock income variable are calculated only for livestock keeping households, which ensures that results are not influenced by the pattern of livestock ownership among the population (Pica-Ciamarra et al., 2011b). In the evaluation of the different income activities, three different aspects are analyzed: participation, activity incomes, and income shares. Participation measures whether a household is involved in an activity or not. By definition, the household participates if the activity income is different from zero. In the case of zero activity incomes, the household does not participate. Activity income refers to the income from a certain activity measured in that country’s currency. The percentage shares in activity incomes are calculated by dividing the mean activity incomes by the mean total income. These shares provide an insight into the importance of certain activities for the region. They should not be mixed-up with income shares, which is the mean of the percentage share of the income from an activity in total household income. Income shares highlight the importance of activities at the household level (Schwarze, 2004).

2.1.3. Livelihood systems in pastoral areas of Ethiopia

Pastoralists in Ethiopia mainly found in four lowland regions, Afar, Oromia, Somali, and the Southern Nations, Nationalities and People’s (SNNP) regional states. Pastoral groups are also found in Gambella and Benishangul areas. The main livelihoods systems include pastoralism, farming, and ex-pastoralism – those who have dropped out of pastoralism and now survive on petty income-earning activities (Behnke et al., 2007). Pastoralism livelihood system subsists 49% of the total rural population in lowlands and opportunistic crop production and livestock husbandry are two major sources of income and livelihoods. It is the dominant livelihood system in Somali and Afar lowlands. In these regions pastoral livelihood system accommodate about 46 and 66% of the total population. In Oromia and SNNPR, they account for 41 and 46% of the respective population (PCDP, 2008).

Agro-pastoral production system is the second economy subsisting the majority of the pastoral population in the lowlands. Agro-pastoralism, unlike pastoral livelihoods depends on both production of crops and livestock both for the market and own production. Livestock production is subsistence but it is the main source of income and food in this livelihood system. This livelihood system account for two third of the population in the 55 target districts ranging from 15.2% in Somali rangelands to slightly above 52% in Oromia, 15% and 30% of the population in 35 districts of Somali and Afar regions. Sedentary farming is the third livelihood system. This only hosts less than 10% of the population and dominant in the major river valleys. This farming subsists 18.6% of the districts and dominants in Somali, SNNPR, and Argoba district of Afar region (PCDP, 2008). Pastoral development is the development of a livelihood system where households make more than half of their income from livestock-related activities using some degree of mobility to access commonly managed pastures. Such livelihood system are not necessarily based entirely on livestock–they may include some agriculture, hunting or selling charcoal but, livestock are the principle source of income (Krätli and Swift, 2014). Mobility is a key strategy used by pastoralists to cope with environmental variability and to take advantage of the heterogeneity of pasture composition (IUCN, 2011). Mobility classified by purpose: production-related (especially the search for high quality feed), market-related or conflict-related (fleeing a threat) (FAO, 2014).

Ethiopia is among those countries most vulnerable to climate risks in Africa. Its high vulnerability derives in large measure from the country’s heavy dependence on rain-fed, subsistence agriculture (Stark et al., 2011). This has its root in various factors, including its geographic location and social and economic structure (UNDP, 2011). In the same way, Zenebe et al. (2012) also reported that its low adaptive capacity, geographical location and topography make the country highly vulnerable to the adverse impacts of climate change. In addition, dependency of its population on climate sensitive sectors for livelihood, widespread environmental degradation and fragile ecosystems, limited national scientific, technological, financial and institutional capacity, poor infrastructure add-up to heighten Ethiopia’s vulnerability to the impacts of climate change (UNDP, 2011).

2.1.4. Pastoral livelihoods in Oromia region

Oromia Regional State, with a population of over 25 million, is one of Ethiopia’s nine regional states. It has 8 zones, 200 districts and 375 urban centers (Pantuliano and Mike, 2008). At present 33 pastoral and agro-pastoral districts of Oromia National Region State are found in 6 zones ( Borana, Guji, Bale, east Hararghe, east Shoa and west Hararghe) (ONRS, 2011). Agriculture is the basis of livelihood for the majority of the population in the region, and accounts for two-thirds of the total regional GDP; industrial activities contribute less than 10%. The region is also well endowed with livestock resources, although qualit y and productivity is very low. Traditional range management practices have deteriorated, and indiscriminate water development has led to the degradation of some wet season grazing areas. Bush encroachment is also a serious problem. Grazing land has been taken away from pastoralists for other purposes, such as farming and settlement along pastoralist migratory routes (Pantuliano and Mike, 2008). Like most part of Ethiopia mixed farming dominates the livelihood of the region. Land is an important asset of households for production of crops and rearing of livestock (ONRS, 2011). According to BoFED (2008), agriculture remains by far the most important sector in the region’s economy. Over 90% of the people of Oromia live in the rural area, and agriculture has been remained the source of livelihood for the overwhelming majority of the people of the region.

The key livelihood of the pastoral and agro-pastoral areas is livestock rearing coupled with crop cultivation. Most households have relatively large areas of communal grazing lands. As a result, the rangeland and livestock holdings have made the rural pastoral communities primarily dependent on livestock and livestock products and the rest from crops. This implies that livestock is the most important economic sources as compared to the other type of economic activities, because livestock and livestock products are the major sources of food, cash income and asset for most households in the region (ONRS, 2011). The agriculture sector contributed the lion share accounting for about 66.7% of the total regional GDP, where service and industry sectors took 21.2 and 12.1% respectively. Livestock plays a significant role in the economy of the region and the farmers and households in particular, with variations in significance from lowlanders of pastoralists’ society to highlanders of farming (ONRS, 2011). In terms of livelihood smallholder rain-fed farmers and pastoralists in the region are found to be the most vulnerable to climate change shocks and the arid, semi-arid and the dry sub-humid parts of the region are most affected by drought (BoFED, 2008).

2.1.5. The Borana pastoralists livelihoods

The Borana have been occupying the semi-arid and arid rangelands of Southern Ethiopia and Northern Kenya probably since the sixteenth century (Helland, 1997). They subsist mainly from livestock products and indirectly from cereals purchased with proceeds from the sale of livestock and livestock products. Like other Ethiopian pastoralists the Borana have been victimized by the combined impact of drought, conflict, market, and state induced constraints with the consequent shrinking of key resources such as pasture and water the Borana continue to rely on livelihoods, which are highly vulnerable. The probability of occurrence of drought remains high while at the same time several factors are causing the weakening of traditional resource management institutions and mechanisms for coping with resource scarc ity such as seasonal migration. Privatization and alienation of traditional rights of access to pastoral resources as well as restrictions of free movement in search of pasture and water are key threats to the continuation of Borana pastoralism (Baxter, 2001). Livestock production is the foundation of livelihood in Borana with cattle being the most highly valued animals and a characteristic of social identity (Boku and Sjaastad, 2010).

Livestock herding is commonly practiced in Borana, which generally falls in two categories. One is home-based herding, which involves the herding of milking cattle with calves and small stock close to the encampments. The herds in this category are usually referred to as worra. The other is satellite herding, including bulls and immature stock herded further away from the encampments. This group of herds is known as forra. They usually range more widely and have access to better forage ( Liao, 2014).

2.1.6. Livestock production systems

One of the overarching objectives of understanding livestock production systems is to explore the impacts of these systems and changes thereof on people’s livelihoods (Robinson et al., 2011). Livestock farming and production systems are important in developing a suitable development strategy and livestock production systems have a direct relationship to livestock disease risk and vulnerability. There are two main production systems practiced within the Grater Horn of Africa accounting for over 80% of the total livestock numbers. These are pastoral or agro-pastoral production systems and the mixed crop-livestock production system (ADB, 2010). According to FAO (2007) the categorization of the production systems, taking into account variation in climatic conditions have been carried in the Horan of Afr ica and has at least seven different production systems under grassland based systems, mixed irrigated husbandry, mixed rain-fed, and landless systems.

Ethiopia’s livestock production systems are characterized by pastoralism, agro-pastoralism, urban and peri-urban farming and specialized intensive farming systems (Mohammed, 2004). However, pastoralism and agro-pastoralism are the dominant livestock production-based, land-use systems in the arid agro-ecologies of Ethiopia and account for 50% of the total 114 million livestock numbers, out of which 40% are cattle, 52% sheep, 56% goats and 100% camels (ACTESA, 2011). The livestock production systems in Ethiopia predominantly are agro-pastoral system in the lowland and the mixed crop-livestock system in the highlands (Ayele et al., 2003). Climate, types of crops grown, livestock species reared and their economic importance to the producer determine livestock production systems. The main livestock production systems are crop-livestock mixed production system, pastoral and agro- pastoral production systems and intensive urban and peri-urban production systems (Azage and Zinash, 2004). Pastoralism production systems in Ethiopia, utilize unfenced rangeland grasses as a major source of feed or grazing, with limited usage of crop residues (UNECA, 2012). Pastoral production systems are defined as those in which 50% of the household gross service comes from primary livestock production or livestock related activities (ADB, 2010).

Pastoralists, agro-pastoralists and small-scale mixed crop-livestock farmers dominate livestock production. In the highland mixed farming systems, livestock and crop production complements each other where crop productions heavily rely on animal draught power. Livestock production also varies across the different agro-ecological zones in the country, where farmers in the highland areas predominantly rear cattle and sheep and farmers in the lowland area mostly produce camel and goats. It is estimated that the highland crop-livestock mixed farming constitutes about 80% of cattle, 75% of sheep while the pastoral and agro - pastoral farmers (such as Afar, Somali, Borana and others) contribute about 75% of goats of the total national livestock holdings NEPAD-CAADP (2005) cited in (Mamo and Degnet, 2012 ). In the pastoral and agro-pastoral areas livestock production system and the livelihood of the society entirely depend on livestock and livestock products (Malede, 2013).

According to Asfaw et al. (2011), in smallholder mixed farming systems, livestock provides nutritious food, additional emergency and cash income, a means of transportation, farm outputs and inputs, and fuels for cooking food. In the case of pastoralists, livestock represents a sole means to support and sustain their livelihoods. The major sources of income for the rich and the medium households are livestock and livestock products, crops, and trading services. Poor and destitute households manage through wages, crop farming, sale of charcoal and firewood, relief food and remittances (payments sent from wealthier relatives). In Ethiopia, especially in arid/semi-arid areas, livestock provides almost 100% of household income (90.0% from cattle; 5.3% from milk, butter and hides/ skins; 1.2% from small ruminants, 0.9% from camels and their products and 1.7% from other sources, whereas income from crops is practically zero (UNECA, 2012). More or less all investigate households in Borana depended on livestock production and opportunistic crop cultivation 91%, while about one- third engaged in non-pastoral activities. Cattle were the predominant livestock species, being kept by all households, while considerable proportions of households also kept goats 94%, sheep 85%, chickens 50%, camels 40% and donkeys 37% (Bekele, 2013).

2.1.7. Pastoralists and Livestock

Development experts and pastoralists themselves maintain that the term ‘pastoralists’ refers to people who still have economic and cultural links with the pastoralists system, even if the they have left pastoral areas or have settled (Boto and Edeme, 2012). Pastoralists are people who live mostly in dry, remote areas. Their livelihoods depend on their intimate knowledge of the surrounding ecosystem and on the well-being of their livestock (Rota and Sperandini, 2009). Pastoral system is not simply a mode of livestock production, rather a complex system that needs adequate and careful valuation. They are also consumption systems that support millions of mobile pastoralists globally (Halefom, 2014).

Pastoralism is a subsistence economic pattern in which people make their living by tending herds of large animals (Kandagor, 2005). The types of livestock kept by pastoralists vary according to climate, environment, water and other natural resources, and geographical area, and may include camels , goats, sheep, yaks, horses, ilamas, alpacas, reinder and vicunas (Rota and Sperandini, 2009). Ethiopia has an estimated 10 million pastoralists and agro- pastoralists, which make up about 12% of the total population. These groups herd their livestock in the arid and semi-arid lowlands that are prone to rainfall variability, extreme drought and flash floods (MoA, 2013). Pastoralism is a production system made up of people, natural resources, livestock and social relations (PFE, 2010). Livestock is at center of pastoral livelihoods and is a key source of food and income in pastoral communities (ONRS, 2011).

2.1.8. The importance of livestock in countries economy

Livestock production is an integral part of the country’s agricultural production system. A study by IFPRI (2006) cited in Azage et al.(n.d.) indicates that the livestock sector contributes an estimated 16% to the total GDP and over 40% to the agricultural GDP. Farmers keep livestock because they provide manifold advantages for farmers as sources of food (meat, egg, milk and milk products), foreign exchange (skins and hides), employment, draught power, organic fertilizer for crop production and means of transport. They are also the main source of income and are closely linked to the social and cultural lives of the community (Getachew et al., 2008).

Livestock also plays an important role as human capital by enabling more healthy lifestyles and empowering people and communities. Income generated through livestock related activities improves educational levels among poor groups and participation of women in household decision-making processes. Moreover, livestock keeping implies sophisticated knowledge and skills, often shared through gender, classes, generation and across cultures (Rota and Sidahmed, 2010). Sandford and Ashley (2010) cited in (Pica-Ciamarra et al., 2011a) identify nine major rationales for households to keep livestock in the Horn of Africa, and in the developing world in general. These can be grouped as generation of cash income, provision of animal food, generation of saving and provision of insurance, production of manure, provision of drought and hauling services, use of the scarce resources available in the drylands and social reasons.

Livestock contribute to household livelihoods through a variet y of direct and indirect pathways. Firstly, livestock provide cash income or income in kind through the sale of animals and/or the sale and consumption of milk, meat, eggs and other animal products. Second, livestock are a form of savings (capital growth through herd growth) and insurance, as the sale of animals provides immediate cash to deal with significant or unexpected expenditures (for example, school or medical fees). Third, livestock provide manure, draft power and transport services, which can be used on the household farm or exchanged on the market (for example, rental of bull for ploughing). Fourth, being a source of wealth, livestock not only contribute to social status but also may possibly facilitate access to financial services, both in formal and informal markets. Finally, because some livestock can be kept close to the homestead and require few labour inputs, such as a small flock of poultry birds, these can be tended by women while managing other time-consuming activities (for example, cooking or child care), thereby falling under their control and providing some degree of empowerment (Alary et al., 2011).

Livestock plays an important role in much of rural Africa where an estimated 50% of the population lives in poverty (World Bank, 2013). The livestock sector, which is largely concentrated in arid and semi- arid lowland regions, contributes 12-16% of Ethiopia’s gross domestic product and 30-35% of the agricultural GDP (MoA, 2013). Livestock perform manifold functions in the Ethiopian economy by providing food, input for crop production and soil fertility management, raw material for industry, cash income as well as in promoting saving, fuel, social functions and employment. Livestock is also an important provider of export commodities such as live animals, meat, hides and skins (Ayele et al., 2003; NABC, 2010).

2.1.9. The challenges and constraints in livestock production systems

A study in Ethiopia by Tibbo (2002) indicates feed shortages, livestock disease, low genetic potential of indigenous livestock, lack of marketing infrastructure and water shortages as the factors affecting cattle and sheep farming in the area. In Southern Ethiopia, Adugna and Aster (2007), reveals that lack of feed and water during the dry season and drought are the main constraint affecting livestock production. Shortage of rain and frequently recurring drought and bush and rangeland encroachment by poisonous and undesirable plant species in the area are major causes of reduced forage production, which in turn contributes to a high mortality rate. Prolonged dry seasons and drought, outbreaks of disease (i.e., foot and mouth disease, black leg, and anthrax), infestation by parasites (e.g. ticks and mange mites) and predators (especially hyena) also have a significant effect on the health and productivity of the livestock in the area. Food insecurity, drought, poor access to livestock market service, poor access to veterinary services, shrinkage and deterioration of grazing land due to bush encroachment and expansion of crop land, inadequate water supply, poor support of crop production activity, degradation of natural resource, weak social services, and poorly developed infrastructure are the major socio-economic constraints exists in the pastoral areas of Borana (CARE, 2009). According to Salem and Makkar (2009), ruminant production is the main source of income for rural population living in dry areas. The lack of adequate year-round feed resource is the most important factor contributing to the low productive and reproductive performances of the farm animals. Rangeland degradation, increasing use of some concentrate feeds in biofuel economical crisis are seriously threating the sustainability of livestock–based production systems. The elders in Borana ranked the major causes of pastoral destitution in order of importance, drought, conflict, water shortage, bush encroachment, kallo or private land enclosures, population growth and alcohol and chat respectively (Yacob and Catley, 2010b).

Pastoralists in Ethiopia lack strategic approaches to produce livestock products for the market. However, livestock production remains a survival strategy and source of livelihoods for 26 million agro-pastoralists and pastoralists in Ethiopia (UNECA, 2012). According to UNECA (2012) report on livestock value chains in eastern and southern Africa a regional perspective report shows that the challenges encountered by pastoralists in Ethiopia are: (a) inadequate rangeland pastures and water for livestock as a consequence of low/erratic rainfall, frequent droughts and overgrazing, which further result in rangeland degradation and bush encroachment; (b) poor animal husbandry practices as manifested by failure to control/prevent intestinal worms/liver flukes infestation and ticks and tick borne diseases (TTBDs); Lack of supplementation with protein sources during the long dry season; and indiscriminate inbreeding. Frequent livestock disease out breaks especially TADs which are associated with illegal livestock movements, poor campaign programmes and vaccination coverage; failure to develop and maintain cold chains for FMD and CBPP vaccines and other important animal vaccines; (c) inadequate veterinary and livestock extension support services.

The major constraints limiting livestock production were feed shortage, animal health, labour scarcity and lack of capital in central Ethiopia (Belay et al., 2012). In additions Hailemariam et al. (2013), in a study of traditional sheep production in Southern Ethiopia, state that disease, parasites and lack of proper water and feed resources, followed by lack of extension support, are the major constraints facing sheep farming in the area. According to reports of Ethiopian Ministry of Agriculture (MoA, 2013) the major challenges in livestock production systems are:-

Technical constraints: genetic limitation for production, inadequate and poor quality of feed resources, prohibitive price of crossbred heifers and poultry, lack of poultry parent stock, and prevalent animal diseases

Institutional constraints: poor linkage between research, extension and technology users,

Socio-economic constraints: the unavailability of adequate land, specific problems to pastoral areas (shrinkage and degradation of rangelands, recurrent drought and conflict)

2.1.10. Classification of household income

There has been a wide range of different systems in classifying sources of income. Terms like off-farm and non-farm income are used at first glance in a synonymous way, but with slightly different definitions. Ellis (2000) defines off-farm income as income originating from wage labor on other farms whereas Barrett et al. (2001) refer to off-farm income as all activities away from the farmers’ own property. The classification proposed by Barrett et al. (2001) according to sectors (agriculture and non-agriculture) and functions (wage and self- employment). Figure below illustrates the concept and the classification of the different income sources.

Figure 1: Classification of household income source

Abbildung in dieser Leseprobe nicht enthalten

Source: (Barrett et al., 2001)

2.1.11. The sources of household income and share of livestock income

Livestock is a source of income, employment, and alleviation of poverty for rural masses. Livestock join with farming system, as safety deposit for crucial circumstances (Upton, 2002). Pastoralism also contributes immensely to the gross domestic product of certain countries with contributions of over 80% in countries such as; Sudan, Niger and Mongolia and between 20 to 80% in countries such as Senegal 78%, Somalia 65%, Kenya 50%, Kazakhstan 42%, Ethiopia 40%, Chad 34% and Burkina Faso 24% (Hatfield and Davies, 2006). The research paper series on determinants of rural income, poverty, and perceived well-being in Mozambique shows a deeper look at the variation in household income by assessing the determinants of the most important sources. The paper examines seven sources: (1) net crop income, (2) livestock income, (3) off-farm self-employment, net small-business income, (4) off-farm self-employment, resource-extraction income, (5) off-farm agricultural wage income, (6) off-farm non-agricultural wage income, and (7) net remittance income (Walker et al., 2004).

According to Schwarze and Zeller (2005), agricultural activities are the most important source of income for rural households in vicinity of the Lore Lindu National Park in Indonesia. They contribute 68% to total household income with the remaining 32% originating from non- agricultural activities. Considering the wealth status, the better-off households derive 40% of their income from non-agricultural activities whereas it accounts for only 10% of the poorest households’ income. In the rural Tanzania income is disaggregated into 7 main categories which include agricultural wage, non- agricultural wages, crop activities, livestock activities, self employment (household nonfarm enterprises), transfers and other non–labor sources (Covarrubias et al., 2013).

A research study conducted in middle Awash, Southern Afar identified four major sources of household income for the study area; these are livestock, wage employment, crop, and rent of land. The result of descriptive analysis of study further shows that majority of pastoralists’ household income in the study area is from livestock. Livestock income contributes 73.30% of the total household income in the study area; followed by employment 18.09% and crops cultivation 5.28% (Derib, 2010). The main source of income for pastoral households in urban and peri-urban spaces in Borana is fuel wood trade 59.41% followed by agriculture 44.60% and livestock herding 27.05%. Other livelihood activities that emerged as significant were sale of water 15.88% and paid agricultural work 15.20% (Edlam, 2003). In the Taltale, Dillo and Dire district of Borana zone in Ethiopia, the very poor households generated their cash income through livestock sales 40%, labour 20%, and safety net 40%. The poor, through livestock sales 60%, labour 5% and safety net 35%. The middle and better-off groups generated all their cash income from livestock sales (Yacob and Catley, 2010a). According Adugna (2012) on entitled the determinants of livelihood diversification in pastoral societies of southern Ethiopia identifies from null to four income-generating activities among livestock, crop, petty trade, remittance, handcrafts and wage.

2.1.12. Estimation methods of household income

There is no standard classification of income components, although several are used at national levels and proposed at international level (ILO, 2003). Given the different nature of sources, the data necessary to estimate them have been collected in different modules. The natural place to collect the data for estimating income from wages is the employment module, data income from household agriculture and non-farm enterprises can naturally be collected in the agriculture and household enterprise module, while data on non-labour income can be gathered in one or more short modules designed mainly to identify such income (Kimsun et al., 2013).

Figure 2: Measuring total household income

Abbildung in dieser Leseprobe nicht enthalten

Source: (McKay, 2000)

2.1.13. The strength, weakness, opportunities and threats of livestock production

According to Mercy Corps and SOS Sahel (2015), on an investment forum organized in Borana zone to learn about the challenges and opportunities in Yabello district, potential investment areas and six favorable environmental opportunities were identified. Potential investment areas are livestock fattening, meat processing and exporting, dairy farms and factories, poultry farms. Opportunities encouraging investment activities in the zone are: government policies and structures that support investment; extensive and productive land resources for investment activities; large livestock population; existence of different NGOs supporting investment, innovation and business development; availability of public media promoting investment opportunities in the area; and Ethio-Kenyan road construction project. According to Burns and Solomin (2010) on the baseline and mid-term assessment of the PSNP plus project in Raya Azebo entitled linking poor rural households to microfinance and markets in Ethiopia report presents the livestock value chain SWOT analysis.

Figure 3: The livestock value chain SWOT analysis in Ethiopia

Abbildung in dieser Leseprobe nicht enthalten

Source: (Burns and Solomin, 2010)

Trung (2010) conducted the analysis of Strengths, Weaknesses, Opportunities and Threats of cattle keeping in Khmer community on the study of cattle keeping among Khmer people in Vietnam. Based on the results synthesis of group discussion and interview the results were showed as follows.

Figure 4: SWOT analysis of cattle keeping in Khmer community

Abbildung in dieser Leseprobe nicht enthalten

Source: (Trung, 2010)

2.1.14. Theoretical literature on factors affecting household income

The basis for the household’s participation decision is the theory of agricultural household model, where the household has a dual role of producer and consumer. If markets are perfect, the household first maximizes profit by choosing different sets of income generating activities based on its resources and prices, and then maximize utility by choosing between different levels of consumption and leisure given profits Bardhan and Udry (1999) cited in (Haile, 2012). Theoretical analysis of household income revealed that rural income is mainly derived from farm and non-farm sources. Farm and non- farm variables played a vital role in rural household economy. All variables had their inequality increasing or decreasing effect (Akram et al., 2011). The wage income and livestock income was found to be helpful in reducing overall inequality in rural Egypt (Croppenstedt, 2006). The findings of Berg and Girma (2006) also suggested that agriculture was the main source of rural inequality in Oromia, Ethiopia.

The household is assumed to maximize its utility that is a function of the consumption of goods and leisure. It is subject to various constraints, such as a cash constraint. According to its objective, the household allocates its resources to activities subject to factors, which are external to the household (Schwarze, 2004). The sustainable livelihoods are achieved through access to a range of livelihood assets, which are combined in the pursuit of different livelihood strategies to achieve certain livelihood outcomes such as increased income (Alinovi et al., 2010). The decision of rural households to participate in non-farm activities is influenced by individual or household specific factors, as well as other social, economic and environmental factors (Barrett et al., 2001).

Barrett and Reardon (2000) also developed approach linking assets, activities and income. They argued that it is useful to have an image of a production function in mind when analyzing the components of diversification behavior, assets are the factors of production, representing the capacity of the household to diversify; activities are the ex-ante production flows of asset services. Incomes are the ex-post flows of activities, and it is crucial to note that the goods and services produced by activities need to be valued by prices, formed by markets at micro and macro levels, in order to be the measured outcomes called incomes. The main factors affecting household income include household size, the age and gender of household members, composition of the household, education, health, social capital, assets and endowments and employment, among others. There are also community factors that significantly determine household income such as weather, prices and infrastructure (Benin and Randriamamonjy, 2008).

2.1.15. Empirical studies on factors influencing household income

A case study from a Kerio river basin community in Kenya on determinants of incomes OLS estimation results are show that the selected independent variables explain the variances in the total gross income 53%, total gross crop income 36%, and total gross livestock income 46%. Among the household variables, age and education years are significantly positive with total gross income and livestock income. This suggests that more experienced and educated people get higher total and livestock incomes. The years in participating in activities of a farmers group are positive for total gross crop income and total gross livestock income. It probably means that exposure to knowledge through participating in activities of a farmers’ group is more likely to contribute to earning higher livestock incomes. Moved dummy is positive on total gross livestock income. The effect of having stayed outside the areas (mostly in the highlands or the neighboring districts) is less straightforward to interpret. One possible explanation is that those owning many animals but having stayed in areas where land was getting scarce decided to move to settle in the Kerio river basin in search for grazing areas. Labour by adults resulted to positive to total gross income, suggesting more labour ability contributes to intensive engagement in agricultural activity by households (Iiyama, 2006b).

In the same year and in different study Iiyama identified that, among the off-farm income dummies, regular off-farm and casual income dummies positively affect the total gross income and total gross crop income levels. Off-farm income accounts for 50% of the total gross income and higher income casual and crop income are more important for lower income groups Iiyama (2006a), because they do not keep enough livestock. Remittance dummy is positive on total gross crop income but negative on total gross livestock income though at 10% significance level, which is difficult to interpret at this stage of the analyses (Iiyama, 2006b). Among the principal component score variables, component I (more staple crop and indigenous cattle, less fruits) is significantly positive for total gross income and total gross livestock income, but not on total gross crop income. Component II (more exotic cattle, less shoats, more fruits) score is significantly positive at 1% for all the total gross income, total gross crop income, and total gross livestock income. Component II contributes to livestock income through exotic animals and crop income, probably through better integratio n, in comparison to component I with staple food crops and indigenous animals (Iiyama, 2006b).

A research report on determinants of rural income in Tanzania that based on the econometric analysis show that the variables were found to be significant in determining household income are, level of education of the household head, size of household labour force, acreage of land used, ownership of non- farm rural enterprise and gender of the household head. Linear models for these factors were estimated by applying generalized least squares technique. The analysis found that improvements in four variables had a significant positive impact on the income of rural households (Aikaeli, 2010). According to Akram et al. (2011) by using cross- sectional data to analyze an empirical analysis of rural household income in Pakistan finds that, the increase of land holding size, the level of household head education and the households rental income are significantly increasing the rural household incomes. The study used semi log multiple regression model to analysis the cross-sectional data.

According to Shahid et al. (2013) study on livestock sectors as income source to mitigate energy crises, with the emphasis on Pakistan analyzed using Statistical Package for Social Science (SPSS) finding indicated that livestock and crops farming together appeared as most prominent income source. The constraints being faced by the livestock farmers were related to finance, feeding, breeding, management, service and marketing. Thus in Pakistan productivity of livestock is lower than the potential also causing of lower income generation to farmers.

A study conducted in four district municipalities in the Free State province of South Africa by using descriptive statistics and the OLS regression show that household livestock numbers is influenced by different factors. The descriptive statistics results indicated that lack of camp systems, drought prevalence, increased feed costs, poor veterinary interventions, insufficient breeding stock, high cost of fuel and transportation, lack of equipment, diseases, stock theft and pilfering, and insufficient grazing land were the prevalent factors that affected cattle and sheep farming in the province. In the same case the OLS regression results indicated that the variables that significantly affected livestock numbers were district, household size, and livestock numbers in 2008, planted pastures, grazing land condition, grazing land acquisition, service, advice / training, veterinary services, purchase of dosing products and sales per year. The results also indicated that the majority 96.8% of the smallholder cattle and sheep farmers would like to increase their livestock numbers (Ogunkoya, 2014).

A study conducted by Derib (2010) on determinants of pastoralists’ livestock income in ‘Amibara’ and ‘Gewane’ district of the middle Awash, Southern Afar, in Ethiopia by using multiple linear regression model and Statistical Package for Social Science (SPSS) version 15.0 for analysis reveal that income of a household generally is determined by wider range of factors. The range of factors may vary between the different sources of household income. The dependent variable considered in the analysis is the total (gross) annual household income derived from livestock and 15 explanatory variables are used to estimate, out of the 15 explanatory variables, only 6 variables are found to be significantly affecting pastoralists household livestock income. The variables that are considered as important determinants of livestock income as per the analysis result are, the total livestock holding and availability of grazing land exerts a positive impact on the level of income from livestock at 1% level of significance. Access to credit is significant at less than 5% level, the risk of predators, livestock breed types and the livestock mobility impacts livestock income significantly at less than 10% level of significance.

As Adugna (2002), cited in Tessema (2015) identifying the determinants of household income in rural households of Ethiopia indicates that, the household demographic characteristics like family size, education status of the household heads and sex of the household heads is determining the income of the household to enhancing or to lowering. A research study conducted by using OLS regression analysis model on the assessment of factors affecting agricultural production; evidence from smallholder farmers of southern Tigray, northern Ethiopia result reveals that, farm income was significantly influenced by age, family size la nd size, plot distance, plot slop, fertilizer use, row spacing, access to credit, membership to a certain association and TLU. Except age and dummy steep slope, the rest have a statistically significant positive relationship with farm income (Berihun, 2014).

The study on diversification, income inequality and social capital in Northern Ethiopia results of the Tobit estimation show that, land owned, social capital, number of pack, big and small animals all in TLU and social capital are positively correlated with total income. On the other hand, sex of household head and family size are negatively correlated. A large family and women headed household have a negative impact on the level of income. In the case of livestock income, next to regression residual, big animals owned has the highest inequality share of 6.3% followed by small animals owned 5.2% and age of household head 0.1% (Fredu et al., 2007).

The study conducted by Roba (n.d.), in the assessment of the role of cooperative in livestock marketing in Borana Zone of Oromia regional state identified different factors affect livestock marketing of cooperative members. The access to market information, transaction cost, saving habit, members education level, grazing land, water source, prevalence of livestock disease, access to credit, seasonal variation, financial problem, competition, market participation, distance from market place and total livestock holdings were identified as the major factors that may affect livestock marketing of cooperative members. By using multiple linear regression model statistically significant variables affecting livestock marketing of cooperatives members were identified. Accordingly, access to credit, prevalence of disease, transaction cost, seasonal variation, access to market information, level of members’ participation and distance from market place was statistically significant and identified as the top factors limiting livestock marketing in Borana pastoralist area. The study made by Tessema (2015), in the determinants of agricultural productivity and rural household income in Ethiopia, by using the fixed effect (FE) model, found that both labor and land productivity, household’s non-farm income, the livestock owning in tropical livestock units and sex of the household head are the main determinates of rural household income in Ethiopia. However, the number of dependent household member significantly and negatively affects rural household income. There were also socioeconomic factors that explain the variation in income among the rural households.

A literature review in Ethiopia deals with issues related to total household income improvement by analyzing determinate factors affecting total household income in Ethiopia. This limited literature on determinants of household income does not clearly indicate the determinants of pastoral livestock income in Ethiopia. By taking into account the literature in Ethiopia that stated in this research work, this work try to identify the gaps and intend to fill the gaps for future studies and in order to make improvement innervations for the livestock sectors and income derived from livestock in Ethiopia on the following issues. It could contribute the factors that influencing pastoralists’ livestock income in Yabello in general and in Ethiopia in particular. It also contributes the impact of the factors on the pastoralists’ livestock income in Yabello by relating the mean livestock income and the effects of the factors. This study also included the household perceptions on some influencing factors.

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