Abstract The very nature of pastoralist livelihoods in the Arid and Semi Arid Lands (asal) means exposure to substantial vulnerability. Cattle, the main productive asset doubles as a store of wealth. As such, the buffer stock provided by wealth can not be used as insurance against adverse shocks that affect productive assets. This vulnerability could be reduced substantially through monetization of parstoralist livelihoods. Indeed, over the last decades, there are signs that some markets that focus on live cattle export to Sudan and further to the Arabian peninsula have been booming. Still, the majority of pastoralists' interactions with the market remains low, with frequency and timing determined by immediate cash needs. We look at what structural factors are responsible for the growth of the export markets, and ask if lessons can be learned to increase market participation in poorly integrated pastoralist systems.

1. International Congress Livelihood 2013, Sustainable livelihoods in the tropical
drylands
Mekelle, Ethiopia, 17-21 September 2013
Policy options for reducing vulnerability in
conflict-prone areas:
Livestock market dynamics in pastoralist areas of
Ethiopia
Bjorn Van Campenhout
with Fantu B. Nisrane, Derek Headey and Bart Minten
IFPRI, Kampala and Addis Ababa

2. Introduction
• Pastoralist and Agro-pastoralist livelihoods
= extremely vulnerable
• Stengthening livestock markets to
increase resilience:
“An initially localized scarcity can only persist if price
signals are not transmitted to other markets” (Ravallion,
1986)
• Study of price movements of commodity in
spatially seperated markets to learn how
well they work

3. prices and market performace
1
EQ
D
S
S
D
1
EP
2
EQ
2
EP
D’
'
2
EQ
'
2
EP
'
1
EQ
'
1
EP
S’
Until TPP EE =−
'2'1

4. Connecting fishermen to markets

5. • No transaction costs
• Symmetric transaction costs
• Time dependent transaction costs
• Impose 1 structural break in time
Econometric model

6. Data: livestock in Ethiopia

7. Addis - Adama

8. Addis - Adama

9. Adama – Dire Dawa

10. Adama – Dire Dawa

11. Shashemene - Moyales

12. Shashemene - Moyales

13. Policy options
• Trade agreements / transhumance
arrangements
• Use price information in FEWS
• Reduce reliance on trust based
relationship
• Policies that acknowledge the particular
nature of livestock in a pastoralist setting
(adapted savings products, safety nets,
destocking funds at regional level)

14. Thank you!!!