5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa04/13/23 – Page 1
,
Statement of the problem… However, as many studies revealed, it is
» Too narrowly centered on technology transfer with insufficient attention paid to the human, social, institutional and organizational aspects.
» Besides, the service delivery has historically predominantly been in the public domain.
On the other side, multiple service providers from the public, private and third sector are emerging in the sector. » This is challenging the traditional livestock services and
service delivery system to become more efficient and effective.
The need for institutional reforms is appreciated now more than ever. » This article reports the result of a study on dairy service
delivery systems in Debrezeit milkshed, in Ada’a district where dairy is an important economic activity.
Dairy Producers’ Willingness to pay for advisory service in Debrezeit milkshed:
Implications for Pluralistic Dairy Service Delivery Systems in Ethiopia
Presented by Anteneh Girma, Mohamadou Fadiga & Ranjitha Puskur for the 5th All Africa Conference on Animal Agriculture and the 18th Annual Meeting of the
Ethiopian Society of Animal Production (ESAP), Addis Ababa, October 25-28, 2010.
Commercialization of Livestock Agriculture in Africa: Challenges and opportunities
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Outline of presentation
Emergence of pluralistic service delivery systems in developing countries
Objectives of the paper
Methods and Procedures
Results and Discussions
Way forwards
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Background Governments have traditionally taken the dominant role
for its funding and delivery of agricultural extension/advisory service since 1840’s
Its contribution to agricultural development Its public good attribute
Ethiopia’s extension systems One of the largest public agricultural extension services in
Sub-Saharan Africa (SSA) and Third largest in the world after China and India
The essential role that agricultural advisory service can play for agricultural development and commercialization
changes in the global market, linking smallholder to high value added export market,
promoting environmentally sustainable production techniques coping with HIV/AIDs and other health changes
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Background…
The experience of this public dominated extension implementation has recorded mixed impact on farm performance
The traditional extension service ( public funded & delivered) is found less effective because of the following major weakness
» Supply-driven and top-down approach » Poor financial and human capacity» Cereal crop-biased with insufficient attention given
high value crops production and commercialization of livestock sector
» Biased in favor of technology transfer at the expense of organizational development
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Background…
Different strategies (market and non market) have been implemented for public agricultural service reforms
» Implementing reforms that depart form the traditional public services models entails institutional innovation
Pluralistic service delivery
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Background…
The need for involving private sector, farmers’ organizations and NGOs/CSOs in sharing, augmenting and supplementing public sector service delivery is being increasingly recommended in Ethiopia
This study selected dairy sector to test the recommendations in an emerging market orientation and with multiple actors’ involvement in the service delivery in the country
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Background…
Demand driven advisory services emerge when» service users ask for,
» need and value
» willing to invest their own resources in order to receive the services.
In Ethiopia, however, there is a lack of information on how producers respond to this emerging market setting where the majority of the service, except advisory service, is paid by dairy producers.
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Objective of the Study
Assess dairy producers’ willingness to pay for advisory service
Understand the factors that determine their willingness to pay for dairy advisory service and
Analyze the possible options for pluralistic service delivery systems in the dairy sector
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Description of the study Area
Market oriented dairy production with multiple actors’ involvement in the service delivery in the country.
Most developed milkshed in the country; » supplying the bulk of dairy products available in the Addis Ababa
market,
Largest and most diversified dairy market in Ethiopia» An extensive collection zone for milk produced by smallholder dairy
producers and dairy farms.
Two dairy processing plants and the biggest dairy cooperative in Ethiopia (the Ada’a dairy cooperative)» In terms of number of members and volume of production and with
its own milk processing and feed processing plants are located in this area
» Started provision of services to members (feed, AI, market)
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Methods and Procedures
Data type
HH survey» 150 dairy producing HH were selected using
two-stage sampling procedure from urban, peri urban and rural kebeles
FGD and Key informant interview Service providers survey Government document review
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Methods and Procedures …
Model used and data analysis Contingent Valuation Method (CVM)
» Double bounded dichotomous choice payment question
The double bound CV model
This is an interval regression where » WTPi is the upper bound and lower bound of various bid levels
for service delivery proposed to respondents» represents the vector of explanatory variables, » is the scale parameter and» is the vector of parameters of the explanatory variables.
20,i i i WTPWTP x where N :
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
WTP intervals
Methods and Procedures …
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Methods and Procedures …
Nine variables (three continuous and six dummy, two of which are interaction terms) were used in the interval regression model
The resulting estimated parameters are used to compute the predicted willingness to pay for service delivery.
The mean WTP is defined as follow: with
and are respectively the cumulative distribution and the probability density function under the normal distribution.
i i i iE WTP x x
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Methods and Procedures …
Fit
Adapted : Birner et a1., 2006: Framework for Designing & Analyzing Pluralistic Agricultural Advisory Service
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Methods and Procedures …
Pluralistic
Dairy Service Delivery System
Fiscal Arrangements
for Decentralized Service Provision
Quality Management Assurance of
Service Provision Service Providers Types (Pluralistic),
Willingness to pay for services
Dairy producers’ ability and
willingness to pay
Production System
Market orientation and access to dairy
related services
Platform Linkage and
partnership b/n service providers
and Learning alliance
Effective Demand Quality of demand,
Articulation of demand and
accountability claim by the clients
Policy Development
and Legislation for services
Capacity & management
Service Providers staff capacity,
motivation, and quality of service
Adapted from: Hagmann, Connolly, Ficarelli, and Ramaru, 2002. The Service Delivery Framework
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Results and Discussions
Preliminary results WTP
» 71.3 % were willing » 28.7 % weren’t willing to pay for dairy
advisory service. Reasons for not willing to pay
» 55.8% pointed out affordability as the main reason,
» 30.2% indicated that it is the responsibility of the government to provide such services and
» 14.6 % do not trust that the service could be improved through payment
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Results and Discussions …
Preferred modes of payment » 80.6 % would like to pay for advisory services through
cooperative » 1.9 % in-group with other producers » 17.5 % of the respondents prefer to pay personally to the
service provider
Conditions that enhance the payment for the dairy advisory services» Improved income from dairy was the main factor (38.3 %), » Improvement in production output and market (36.4 %), » Relevance of the advisory service (15.9 %) and » Effectiveness and efficiency of the development agent (9.3 %)
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Determinants of willingness to pay
Results and Discussions …
Explanatory Variables Estimates P-Values
Intercept 12.495 0.007***
Perception on the quality of existing dairy services
-6.709 0.001***
Sex 0.669 0.521
Location 0.465 0.771
Education status 0.094 0.948
Location*Experience 0.585 0.323
Location*Training -2.739 0.078*
Age of the respondent -0.171 0.065*
Labor 0.918 0.096*
Total income*10 0.002 0.004**
Scale 6.972
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Results and Discussions …
Mean WTP
12.77 Birr per visit, 0.94 US$.
Distribution of Predicted Willingness to Pay across
Participants
0
0.05
0.1
0.15
0.2
0.25
0.3
3.06 6.08 9.09 12.11 15.12 18.14 21.15 24.17 27.19 30.20
Predicted Willingness to Pay (ETB)
Freq
uenc
y
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
» No statistical difference WTP across subsystem
» Difference in community aspects
» Difference in dairy production systems and the policy and institutional arrangement across these sub systems
» Difference in the capacity of potential service providers
Different options for the peri-urban and rural setting on one side and the urban setting on the other.
Results and Discussions …
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Implications Dairy producers have indicated their WTP for advisory service
» The service delivery system might be able to enhanced through cost recovery mechanisms
» Encourage the participation of private service providers Substantial amount of money accrue to the advisory service provider
if the calculated mean WTP were multiplied by the total number of dairy producers,
» Enhance the accountability to advisory specialists to make the service producers relevant
Payment through cooperative was the preferred mode of payment » Majority of the respondents have realized the benefit of being
organized in cooperative 62.9 % of the urban producers are members of a dairy
cooperative and non members are also confident on the performance of the
cooperative to facilitate such service delivery
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Political decision to continue in delivering public advisory service for the rural and peri-urban settings
» Transforming the traditional role of extension to market- oriented public advisory service through participating dairy producers for the financing of the service
Implications …
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Implications…
Urban dairy sub system is neither covered nor designed to access advisory service by the public sector » The urban sub system is covering the majority
of the milk market in the milkshed
» With large number of crossbred cows, which demand better management practices and thereby advisory service, leading dairy producers to join dairy cooperative
Dairy cooperatives could at least contract advisory service from competent service providers or recruit their own advisory staff
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Way forward
Development of demand side of service delivery Community level Organize dairy producer by public / NGOs Empower producers organization
» Articulate, organize the delivery and share the costs of the services
Development of competent service providers District /milk shed levelGood choices of advisors Building competencies of advisors Quality assurance and qualification of service providersDelivery system that makes service providers accountable to the users
Supporting the response National/regional level Producers access to the
advisory services Increased competition
among the service providers
Capacity building and backstopping services to producers and service providers
More enabling environments
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Acknowledgment
International Livestock Research Institute/IPMS project » graduate fellowship to the first author
while undertaking this research » the research costs
5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa5th All Africa Conference on Animal Agriculture , October 25-28, UNECA, Addis Ababa
Thank You