The impact of COVID-19 on livestock-based economies in the Horn of Africa

From mid-April through June 2020, Mercy Corps monitored livestock systems in Somalia, Ethiopia,

Kenya, Uganda and South Sudan to understand the interplay of diverse market forces as influenced by COVID-19 mitigation measures, as well as seasonality, locusts and Rift Valley Fever (RVF). 

This study focused on live animal, meat and milk value chains originating in the arid and semiarid lands (ASAL) regions and extending on to major domestic and export consumer markets. Information was collected through existing programs and augmented with key informant interviews. 

This report (Mercy Corps, August 2020, 14 pages), developed from that research, aims to fill knowledge gaps and offer recommendations to support coping and recovery.

Opportunities to Build Upon

• A Market actors that adapted quickly have fared the best. From producer to retailer, market actors that found ways to adapt their business models protected their livelihoods or, at minimum, improved their ability to recover. Households and businesses employed adaptations including identifying alternative input and output markets, such as livestock, veterinary drugs and milk; increasing use of mobile phones, using data, SMS and voice services to take orders, communicate availability of supplies and negotiate prices; offering delivery services for products like milk, veterinary inputs and meat; using personal protective equipment to reassure customers of safety; and temporarily leaving livestock-related business for other viable businesses. Scaling these solutions and identifying new adaptations for market actors will improve market function, even during times of public health crisis.
• A Good seasonal pastures are strengthening livestock holdings. Pastoralists and agropastoralists have struggled to recover herds lost to severe drought in 2017. However, above average rainfall has improved pasture availability and quality, and livestock body condition and general herd sizes are good. As countries reopen and economic activity resumes, providing short-term social protection and strengthening alternative income earning opportunities for small herd owners will protect livestock gains, prevent oversupply of animals and decreased livestock prices, assist household recovery and reduce future vulnerability.

Challenges to Consider

• A Loss of consumer income, plus the closure of institutions, restaurants, bars and street-food vendors, have eliminated a large segment of meat and milk value chains and devastated livestock markets across the region. Market closures and movement restrictions disrupted supply chains, but in many cases producers and traders could work around these challenges. However, the sudden loss of end markets quickly stopped the need to supply milk and live animals for meat. Unlike other foods, meat and milk sales are highly price and income sensitive. Consumption of meat and milk decrease when retail prices increase or when household incomes decrease or become less reliable. Meat and processed milk are consumed primarily within urban and peri-urban markets, so the strength and growth of the livestock sector are directly tied to the strength and growth of these consumer markets. 
• Movement restrictions and widespread loss of wages have severely limited pastoral and agropastoral households’ ability to earn income. Agropastoralists and pastoralists earn income through diverse activities both on and off farm. Many of these income-earning opportunities have been inaccessible during COVID-19 lockdowns. Combined with reduced demand for livestock in local markets, this has forced smallholder households to tap into meager savings and food reserves, or borrow against current assets or future earnings. Going forward, households will struggle to recoup losses and prevent further economic backsliding.