57. Government investment policy in the livestock sector has put great emphasis on development through producers cooperatives and parastatals. A central point in this policy has been that these organisations would facilitate "modern" technology adoption and achieve higher productivity in operations with greater economies of scale. However, there is little evidence to support that this strategy has been successful in improving livestock production in Ethiopia. There is an imminent need to examine alternative approaches to livestock development in the peasant sector.
58. From the foregoing discussions it can be concluded that successful financing of livestock development in the peasant sector as a whole is in the main contingent upon policy measures dealing with technical (feed supply and breed type) and non-technical (pricing and institutional) constraints facing the sub-sector. The major policy issues singled out for discussion are: mixed farming systems, pasture land allocation, animal breeding, credit services, pricing, and farmers' participation.
59. Mixed farming at the smallholders' level is still widely practiced in its traditional form without any policy guideline. It needs to be developed further in the stricter sense of the concept. It is grossly neglected at cooperatives level however; mixed farming systems do not end with the keeping of draft oxen. Despite the fact that livestock generate the greater proportion of farmers' cash income, development policy is unduly skewed in favour of crop production.
60. It is necessary to reverse this trend and to strike a balance between crop and livestock development. A policy which promotes and supports mixed farming development should be adopted as a strategy in the highland regions in general and central highlands in particular. Credit services should also be orientated to a mixed farming concept. The optimal allocation and efficient utilization of scarce resources would be better achieved through such a policy.
61. The vast number of animals presently depending on communal grazing land are almost on a starvation diet. The absence of conscious pasture land allocation as well as its improper management have resulted in overstocking and the eventual exposure of the communal grazing land to erosion and degradation cannot be overemphasized. To mitigate and subsequently avoid this situation a policy to guide the composition and size of individual livestock holding and the corresponding management system (extensive and/or intensive as the case may be) should be elaborated. Destocking of communal grazing land (may be through levying prohibitive fees on surplus animals) would hopefully coax farmers to be quality conscious.
62. Government services promoting livestock development should seriously re-examine the present ad hoc policy of introducing exotic breeds particularly for dairy purposes. Spontaneous and arbitrary distribution of low potential cross-bred dairy animals such as Arsi crosses, which have become notorious for their low productivity and adaptability problems in other regions, would have grave consequences in improving the productivity of the national dairy herd. Hence, a well defined breeding policy to be enforced by law should be considered as soon as possible. Indeed, it should be a priority task in developing the subsector.
63. The introduction of livestock technology in the peasant sector should as much as possible be compatible with the farmers' level of management and debt absorbing capacity. Concurrently, its sustainable supply as well as availability of credit to facilitate its acquisition by farmers needs to be accorded close attention. Along with this consideration, the operation needs to be market-oriented so that the cost of technology could be recouped within an acceptable period of time.
64. Financing of improved livestock enterprises, notably dairy, is mostly handicapped by, among other constraints, the supply of foundation stock and feed, as well as market outlets. Therefore, credit services should first focus on linkage projects such as heifer supplying ranches, feed supplying enterprises, milk processing technology, and the like.
65. In order to attract potential entrepreneurs, adequate price incentives should be given to smallholder livestock producers. In general, the price ratios between grain and livestock commodities need to be carefully re-examined. But, most urgently, the current milk price offered by the Addis Ababa dairy industry will have to be revised. With the present price it is highly likely that the industry would ultimately not be able to attract most of its smallholder clients. If this happens, there would be no choice except resorting to reconstituted milk which would in fact defeat the import substitution and export promotion goals of the government.
66. Producer cooperatives have shown very little or no measurable success primarily due to the undesirably high degree of government intervention. In the future farmers should be allowed to exercise their freedom to participate at grassroots level in generating project ideas, designing, implementation, monitoring and evaluation. This, however, should not necessarily imply that government support is not desirable, but it means that the government should have more of a facilitative role than one which involves it in major direct production activities.
67. In order to develop a viable and sustainable, as well as a replicable group farming system, priority should be placed on applied research that would serve as a basis for formulating appropriate policies. More specifically, the research should focus on systems of production, processing, marketing and credit. In the light of the recently declared "Mixed Economy" policy, the author strongly feels that a new livestock development strategy is desirable for a meaningful intervention. Concerted efforts of the MOA, AIDB, International Livestock Center for Africa (ILCA), the Food and Agricultural Organization (FAO), and IFAD can be expected to help generate a workable system.
