13. In many African countries parastatal organisations are actively engaged in the livestock marketing system. These parastatals are normally abattoirs with a monopoly over the export of meat or in the wholesale sector of the meat trade (eg. BMC in Botswana, KMC in Kenya and SOMBEPEC in Mali). Other parastatals have also been established to stimulate livestock trade and promote the stratification of the industry (e.g. the Livestock marketing Division in Kenya), or to regulate the traders. livestock marketing systems by offering competition to private
14. The experience of parastatals in Africa has been mixed. Firstly, there are well managed parastatals which live fulfilled their objectives. Examples are the Zimbabwe Cold Storage Commission, the Malawi Cold Storage Company and the Botswana Meat Commission. Almost invariably such parastatals have held monopoly powers in some part of the marketing chain and, while they may not incur financial losses. the extent to which a lack of competition allows them to operate at higher costs than they otherwise could represents an additional cost to the system. They encounter enormous financial difficulties when their monopoly powers are withdrawn.
15. Secondly, there are parastatals which have accomplished their objectives but with colossal inefficiency and cost. Examples are the Tanzania Meat and Livestock Company, and the Livestock Marketing Division and KMC in Kenya. The intervention of KMC in Kenya ameliorates the depressing effects on farmers' incomes, which result from the seasonality of offtake or when large numbers of livestock in poor condition are offered for sale during drought. The supply of cattle to KMC is at present very seasonal and many of the cattle it buys are in such poor condition that they can only be processed into canned beef. Within the marketing system KMC provides a floor price for the lowest grades of animals, and is in fact the only outlet available for many animals which are in such poor physical condition that -they would be very difficult to sell elsewhere. However, KMC would be unable to provide this service without government subsidy. Finally, there are those parastatals which have failed to achieve their objectives and have in addition incurred substantial losses. A classic example of this is the Meat Marketing Board of Ghana which managed to completely destroy the livestock marketing system in the country (Sullivan and Josserand, 1979).
16. The major reasons for the failure of parastatal agencies in general are (a) poor management, (b) undue political interference and (c) counterproductive price control measures. In the area of livestock marketing price controls have had very undesirable effects. In countries where live animal and meat prices are controlled at unrealistic levels, it is only the parastatals which are effectively made to comply with the controlled prices. Invariably, this forces them to buy dear and sell cheap with disastrous financial results.
17. On balance, the potential damage caused by failures far outweighs the good achieved by the successes. If states feel the need to directly participate in livestock marketing systems for one reason or another, an appropriate policy would be that parastatals are run under commercial conditions and that they are subsidized only for non-business-like transactions specifically requested by the state, such as the purchasing of livestock during drought periods.
