In the previous two articles, we discussed the possibility of exporting goats and sheep (small ruminants) to Saudi Arabia, and the importance of commercialising the small ruminants value chain in Zambia. The first article was sceptical and analytical, while the second one was strictly analytical. For those who did not read the articles and are interested in joining the discourse, you can find them on the following links ( and In the later article, I promised to write up on how the small ruminants value chain can be commercialised and who can commercialise it? In this article, I will attempt to answer this question by providing the various ways of commercialising livestock value chains, their merits and demerits, and recommend what Zambia must adopt.

Let us start by briefly describing the current informal small ruminants value chain in Zambia. On top of the chain are producers who are found mostly in rural areas of Zambia. Small ruminants are either set free in communal grazing areas or tethered against trees. When a financial need arises, farmers mostly sell live goats to intermediaries (traders) who buy at lower prices. The lower prices are justified by the high cost of transportation of goats and sheep from the remote to urban areas of Zambia. Thus, the producer gets a lower farm gate value for their goats and sheep, which do not stimulate investment into production. Some traders slaughter goats and sell goat meat (chevon) or sheep meat (mutton) along the road like the one in Chongwe.

At the end of the value chain are rural and urban consumers. Rural consumers mostly slaughter small ruminants during funerals and festivities. They also slaughter and use the meat to barter with grains such as maize and rice after crop harvest. Urban consumers do not have easy access to goat meat. For instance, the common source for goat meat in Lusaka is the Lusaka Urban Small Livestock Market in (Chibolya) managed by Small Livestock Association of Zambia (SLAZ) (Lukubi 2009), which is mostly supplied with small livestock by traders and to a lesser extent, small-scale producers. Another source is the Chongwe roadside market, which is mainly accessed by those travelling along the Great East Road. Food safety remains a significant challenge at these open markets making it difficult for consumers who are food safety conscious. However, there has been a change in consumption patterns as people are eating slightly more of goat meat through the famous “soup ya mbuzi”. Unfortunately, this is usually consumed at beer drinking places, some restaurants, and to a lesser extent at the household level, making goat meat not much consumed by the majority of the people with the buying power in urban areas. The market for live goats and goat meat remains very informal making it a challenge to enforce food safety and hygiene standards.

Another group of urban consumers worth mentioning is the Muslim community, which ONLY buys live goats and sheep for the slaughter at the household level due to Halaal restrictions. The Muslim community is a heavy consumer of small ruminants, and consumption even significantly increases during the two festivities of Eid-ul-Fitr (after the month of fasting or Ramadan), and Eid-ul-Adha (celebration of sacrifice during pilgrimage or Hajji). Every financially able Muslim must at least slaughter a goat or sheep during these festivities. These annual Muslim festivities lead to a shortage of in supply of goats and sheep. The growing Muslim community nationally, regionally and internationally is an essential factor in the commercialisation of the small ruminant value chains as the population keeps increasing with a good purchasing power, as is the case of the much talked about Saudi Arabian goat market deal.

The informality of small ruminants value chain makes price changes of small ruminants not seem to affect the market in comparison to that of beef and chicken. For instance, during the livestock movement ban due to diseases of cattle such as Foot and Mouth Disease (FMD), you will see a significant increase in prices of beef due to a decrease in supply. Why doesn’t the change in prices of goat meat seem to affect the value chain? It is because the majority of middle-income earners do not have easy access to it. Middle-income earners buy meat from established butcheries. The coming of shopping malls has seen more demand for meat from these malls because of the desired hygiene and food safety standards. To incentivise consumption of goat meat in urban areas, there is a need for improved access, tractability, quality and consistency of supply. Consumers wish to find the product they require now (regularity of stocking), on the shelf where they found it previously, equal in appearance to the previous purchase (branded), similar in quality to the previous purchase (consistency), and feel satisfied that they can trust its safety for consumption (Roets 2005). If proved unsafe, the consumer would wish to have some form of recourse, which is enabled through the mechanism of tractability back to the source. There are no doubts that commercialising the small ruminant value chain will increase access to goat meat through local butcheries and other markets in shopping malls. This will stimulate consumption by the majority of Zambians, and eventually have a pull and push effect on production and eventual supply of small ruminants. Studies have shown that supply of goats seem somewhat elastic, meaning that sustained improvements in prices offered would likely result in substantial increases, over time, in the production (supply) of goats (Lukubi 2009). However, many producers and prospective producers of goats face resource limitations which includes; financial, technical knowledge, time or suitable land area. Such constraints may delay response time for increasing goat numbers even when favourable prices are encountered for an appreciable time. Our national small ruminant commercialisation agenda must be cognizant of these limitations for the successful development of small ruminant value chain. Let us look at some mechanisms of commercialising livestock value chains.

Mechanisms of commercialising livestock value chains
To achieve a consistent flow of production and marketing of goats into the small ruminant value chain, a possible mechanism to ensure this would be through formal vertical coordination within the livestock industry. Rehber (1998) recognises four (4) types of vertical coordination that can occur. In layman terms, these are:

1. Coordination without a contract: This is called a spot market or open market transaction since there is no written or oral contract between the firms in the production and marketing chain. Each player in the chain can buy or sell his/her inputs and outputs to whomever he/she pleases, often based on price. The disadvantage of this lack of formal relationship is that there is uncertainty regarding future successful transactions taking place. Spot markets drive the current Zambian informal small ruminant value chain. Accessing regional and international markets with such market governance systems is very challenging owing to its uncertainties along the entire value chain.

2. Contract farming: This entails relationships between producers and private or state enterprises that provide processing, export or purchasing activities that regulate prices, production practices and product quality, which replace spot markets. Variations of contract farming have been called “outgrower schemes”, “nucleus-out grower schemes” and “satellite farming” in various parts of the world, and are generally promoted as an institutional innovation to improve agricultural performance, delivery of farming inputs and information in developing countries (Roets 2005). Contract farming makes small-scale farming competitive because small farmers can access technology, credit, marketing channels and information while lowering transaction costs. It also provides an assured market for the produce at the farmers’ doorsteps, thereby reducing marketing and transaction costs. Contract farming also reduces the risk of production, price and marketing costs. However, contract farming arrangements are often criticised for being biased in favour of firms or large farmers, while exploiting the weak bargaining power of small farmers.

3. Ownership integration: Here each firm loses its identity and becomes an entity within a larger company. The larger company owns its upstream suppliers and its downstream buyers. The benefits include lower transaction costs, synchronisation of supply and demand along the chain of products, and lower uncertainty, which provides an excellent opportunity for investment. Some of the disadvantages are market monopolisation and manipulation of prices.

4. Farmer co-operatives: Here the emphasis is that the firm is owned and controlled by the producers, and operates for the mutual benefit of its members (producers or patrons). A combination of farmer co-operatives and outgrower scheme is the desired option for commercialisation of the small ruminant value chain in Zambia. I propose a cooperative be formed, and members be contracted to supply goats to the cooperative, which in turn off-loads on the market. Such an undertaking can have access or contracted to supermarkets. The schematic cooperative model was presented in the first article which can be obtained via this link

Having discussed some of the methods of commercialising livestock value chains, let us look at the procedure that we can take to commercialise our small ruminants value chains.

Possible ways of commercialising value chain in Zambia
The small ruminant commercialisation process must initially involve stakeholder mapping so as to audit what is currently obtaining in the country. The stakeholders will come up with a strategic plan on how to commercialise the small ruminant value chains, with an emphasis that the commercialisation will be private sector-led. I stress the need to know the key stakeholders in the value chain and understand who is doing what so that we can have synergistic effects. For example;

1. Riding on the pass-on goat value chain development approach by World Vision would be an entry point to organise livestock farmers into cooperatives.

2. Vertically integrating the small ruminant farmer groups with existing commercial farmers or agro-firms would boost domestic production and cut transactional costs. These can make our farmers understand that tethering a goat in the same place the whole day cannot improve productivity.

3. Emergent small ruminant farmers (middle-income earners) are a potential policy lever as they are more prone to adopting agricultural technologies even though most of them are weekend farmers. These have the potential to come together and pool resources to acquire land and produce small ruminants. Incentives can be developed to deliberately link them with small ruminant farmers in the area and bring them into cooperatives.

4. Small ruminants associations affiliated to Zambia National Farmers Union (ZNFU), quasi-government organisations such as Golden Valley Agricultural Research Trusts (GART), and Non-Governmental Organisations (NGOs) can also champion the development of these small ruminant cooperatives.

Take home message
In summary, the informal and formal livestock markets must run parallel, but with more bias towards the formal market and to a lesser extent, informal market to service certain classes that cant access the formal markets for several reasons. Informal markets play an essential role in developing countries because they allow members of the community to buy commodities on credit based on social connections and pay later arrangements. Informal markets also support barter systems as a way of conducting transactions in certain parts of the country where access to cash transactions are far-fetched, and thus livestock and livestock products are traded in an exchange with other commodities such as grains.

The problem with livestock value chains in Zambia is that there is no balance between supply and demand. To balance the production and consumption side, the small ruminant value chain must be expanded along the entire chain. This means that value chains need upgrading at all levels from production, consumption and disposal of livestock and livestock products. We can incentivise goat production to the point of market saturation, but what happens if the consumer side remains constant? Prices will go down, and the ripple effect on production will be quite adverse to the point that producers are pushed out of the market. As long as we do not have contract markets with supermarkets in shopping malls where the middle-income earners buy their goods and services, we will not balance production and consumption. This is true for many other agricultural products. The cooperative livestock markets will carter for both production and consumption, as a cooperative is suitable for contract sells with upstream markets. The cooperative livestock market model must be complemented with out-grower schemes and eventually more developed market models.

Let me end by reminding ourselves that to improve goat meat consumption, a consumer wishes to find the product he/she requires now, on the shelf where he/she found it previously, equal in appearance to the previous purchase, similar in quality to the last purchase, and feels satisfied that he/she can trust its safety for consumption.
In the next article, we discuss a cost-benefit analysis or rather the economic viability of the local, regional (Democratic Republic of Congo) and international (Saudi Arabian goat export market) goat markets. Which market option is profitable and sustainable for the Zambian small ruminant subsector? This might take slightly longer because we will require some resources to collect this data.

(The author is a Senior Lecturer of Livestock/Animal Health Economics at the University of Zambia, School of Veterinary Medicine. Email: [email protected], Mobile: +260977717258)