AGP-LMD Project Overview
The Agricultural Growth Program-Livestock Market Development (AGP-LMD) project is a five-year, $41 million USAID-funded project aiming to 1) foster the growth and competitiveness of meat, live animal and dairy sectors; 2) ensure an enabling environment to support the growth and competitiveness of these livestock value chains, and 3) address the needs of the chronically vulnerable through nutrition-based interventions and linkages with other USAID-funded programs in Ethiopia. AGP-LMD’s overall objective is to improve smallholder incomes and nutritional status through investments in selected livestock value chains. These investments must in turn generate increased productivity and competitiveness of these value chains to the benefit of smallholders, both men and women.
In keeping with the principles of the U.S Feed the Future Initiative, AGP-LMD will draw upon a skilled consortium of leading Ethiopian and international development organizations, combining proven livestock and dairy value chain development experience, with expertise in health, nutrition, gender equality, and information and communication technologies. By joining international expertise and worldwide best practices with a leading role by seasoned local partner organizations, the AGP-LMD team will support local partners to spur sustainable economic growth in Ethiopia by leading interventions through existing cooperatives, associations, government agencies, and private firms.
The AGP-LMD project, under IR2, Strategy 4, supports active research in order to strengthen its evidence-based advocacy and lobby for policy change that would create an enabling environment for milk, meat and live-animal value chains in which to operate optimally. Hence, the overall objective of this assignment is to support the Ethiopian Meat and Dairy Industry Development Institute (EMDIDI) and Ministry of Livestock and Fisheries (MoLF) to improve the competitiveness of the Ethiopian beef export industry versus international competitors in similar markets. The results of the study are expected to lead to informed decision making and practical action taken to enhance the competitiveness of the Ethiopian beef export industry.
Ethiopia’s overall strategic goal for industrial development is to bring about structural change in the economy through industrial development. Specifically, by the year 2025, it aims to increase the share of the industrial sector as a percentage of GDP from the current 13% to 27%, and to increase the share of the manufacturing sector as a percentage of GDP from the current 4% to 18% by the year 2025.
In recent years, livestock products have been identified as one of the priority export products that play a major role in industrial development. As a result, EMDIDI was established with the aim of building and developing a globally competitive industry in the subsector by providing necessary capacity building, investment support, and market facilitation.
Currently, Ethiopia exports about 20,000 tons of chilled small ruminant carcasses worth 93 million USD per year (10% of which is variety meat/offal). It is the leading small ruminant meat exporting country in Africa, but its world market share remains very small (1.3%). The meat export volume increased remarkably over the last seven years, and revenue from the meat export trade, primarily shoat carcasses, is on the rise. There are already 10 functional export abattoirs, with 8 more under construction. The plan on the part of the government is to focus on the meat export business rather than export live animals. Major destinations are the United Arab Emirates and Saudi Arabia.
According to the second Growth and Transformation Plan (GTP II) for the period 2015/16-2019/20, the Ethiopian Government has set a target to increase exports to 94,240 tons of meat by 2020. The overwhelming majority of this increase will need to be achieved through the export of beef products, since the quantity (and average carcass weight) of sheep and goat meat required to achieve this figure is not feasible in light of domestic demand for such products.
The size of Ethiopia’s cattle herd, together with ongoing efforts to improve production and productivity in the sector, suggest that Ethiopia has the potential to significantly increase its beef production. There are a number of new, modern, export-oriented meat-processing facilities with cattle kill lines which have started to emerge around the country. Some of these facilities are nearing completion and are expected to begin operations soon. As opposed to sheep and goat meat exports, competitiveness in beef export is a major challenge that Ethiopia should address.
The main competition for the Middle East beef export markets comes from South America, Oceania, Eastern Europe and the European Union. The disease-free status of most of these countries and more efficient production and marketing system they have attained are major competitive advantages which these countries hold over others. The companies use the approach of market and product segmentation with advanced promotion in order to be competitive in the marketplace.
For Ethiopia to be able to expand its market share in beef, it needs to produce products more competitively than its larger international competitors. It is thus important and necessary to assess the competitiveness of the Ethiopian beef industry and to develop strategies to stay nationally and internationally competitive. How competitive is the Ethiopian beef industry today, and will it be competitive ten years from now? If not, what are the implications for industry stakeholders at the various levels of the vertical meat supply chain? Important questions, all deserving of answers, but highly dependent upon thoughtful research and analysis.
Hence, this SoW was prepared at the request of EMDIDI to conduct an assessment and develop appropriate recommendations to address these issues.
The goal of the Consultancy will be to assess, compare and report on the competitiveness of the export value chain of Ethiopian beef to Middle East and North African (MENA) countries, as well as Southeast Asia and other potential markets with internationally competitive beef export value chains. It will also make recommendations on potential actions to increase the competitiveness of the Ethiopian beef industry.
1) Describe the Ethiopian beef export industry structure and characteristics; and evaluate the contribution in volume and value of the different market destinations for Ethiopian beef;
2) Describe the income, cost, and profit structures of each actor in the beef value chains;
3) Benchmark such value chains against international competitor countries;
4) Recommend and substantiate clear and practical solutions (actions) to implement, and suggest policy options to improve competitiveness;
5) Contribute to an understanding of and consensus on opportunities for, and challenges to increasing Ethiopia’s beef industry competitiveness; and
6) Recommend potential destination markets for Ethiopian beef considering the current health and sanitary-phytosanitary (SPS) status (detailed information of those countries, including from which country are they importing? at what price and volume? by which mode of transport? who are the major importer companies? etc.)
To conduct this study, AGP-LMD will hire one competent international consultant with an economics or marketing background for a period of about 30 days. EMDIDI will assign an expert to serve as a counterpart to the consultant. The final draft report of the study will be presented at the stakeholder workshop for feedback. This assignment is expected to result in a clear understanding of the factors affecting the competitiveness of Ethiopian beef exports, and appropriate recommendations to address the problem. This in turn will contribute to achieving three major project-related outcome level indicators:
– Improvements in the enabling environment
– Decrease in the costs of doing business
– Identifying the factors that make the sector more competitive
AcTivities to be conducted by AGP-LMD
1. Provide the contractor with relevant government documents on the livestock master plan, standards and guidelines for review.
2. Arrange meetings with public officials and experts in MoLF, Ministry of Trade, MoI and other relevant public and private institutions.
3. Organize all local logistics, meetings, and field visits associated with the assignment. This involves identifying and arranging meetings with feedlot operators, live animal traders and producers association, meat exporters association and other relevant stakeholders.
4. Organize a wrap-up workshop and debriefing session at the end of the assignment. Relevant stakeholders from the public and private sectors will be invited to attend the briefing and make comments on the findings
5. Disseminate draft and final report to EMDIDI and the federal MoLF for review and feedback.
6. Review the draft study report and provide feedback/comments to the consultant for integration into the final report.
Performance Activities to be conducted by Consultant
The scope of work for this consultancy details the work to be conducted by an international consultant to be contracted to assess factors affecting Ethiopian competitiveness in beef export and the measures to be taken to address those challenges. The following activities shall be carried out under this scope of work:
1. Analyse and describe the characteristics of the Ethiopian beef industry including the macro- and micro- economic policy framework;
2. Review previous work/studies on end market, value chain, and competitiveness related to Ethiopian beef export;
3. Assess the current competitiveness of the beef supply and demand value chain with specific emphasis on the production, manufacturing (slaughtering and processing), marketing and input sectors through a comprehensive value-chain analysis;
4. Benchmark Ethiopia’s beef value chains against similar value chains of competitive countries with regards to:
a. Production: size and carrying capacity, land price versus stocking rate production per unit area (kg/ha), population and turnoff, cost and revenue per farm unit/hectare, cost and revenue per head produced, cost and revenue per kg produced (kg/live weight) until offloading at abattoir, livestock price comparison, input and financing costs;
b. Processing: comparing processing costs, labour productivity, co-product values –inclusive hides & skins, offal, carcass meal etc., comparing revenues (FOB), input and financing costs;
c. Market and Trade: comparative prices for chilled and frozen products (wholesale & retail), market access arrangements, tariff comparisons, value addition opportunitiesInput and Financing costs, comparison of cost from producer to consumer: primary production, value addition, logistics, wholesale, retail;
d. Critical issues for success: evaluate Ethiopia’s competitive position in terms of: animal disease status, consumer expectations, supply chain efficiencies, and market access (agreements and quality assurance schemes); and
e. Opportunities: determine the opportunities for the beef industry in terms of increasing its competitive potential (innovation and branding, marketing channels, production costs, input costs, supply chain, trade barriers).
5. Recommend potential destination markets for Ethiopian beef, considering current health and SPS status. (Detail information of those countries, including from which country they are importing? at what price and volume? by which mode of transport? who are the major importer companies? etc.)
Outcome of the study
Detailed report including:
· Analysis and description of Ethiopia’s competitive position for beef export;
· Clear recommendations to the Government of Ethiopia on actions to enhance the competitiveness of the Ethiopian beef industry in international markets;
· Advice to EMDIDI on innovation and branding to enhance the competitive position of the beef industry; and
· Advice to EMDIDI on future macroeconomic policy guidelines with respect to increasing the competitiveness of the Ethiopian beef industry.
Performance Deliverables Summary
· Review documents on beef end market study, value chain analysis and competitiveness (3 days) (Consultant, assisted by LMD and EMDIDI, from home location)
· Conduct field visit and hold discussions with VC actors including livestock keepers, traders, feedlots, export abattoirs, live animal and meat export associations, and public institutions at both federal and regional level (10 days) (LMD to organized field visit)
· Carry out a detailed assessment on factors affecting the competitiveness of Ethiopian beef export and possible solutions to address the challenges (14 days). Deliverables: A report on the assessment, PowerPoint presentation.
· LMD to organize a stakeholders’ workshop, provide input and feedback on the draft assessment report – Workshop (1 day) Deliverables: consolidated feedback from LMD and EMDIDI (assisted by LMD and EMDIDI).
· Consolidate inputs to prepare final document (2 days) (from home location). Deliverables: Final document on Ethiopian beef competitiveness study
Proposed Level of Effort: This assignment requires 30 days’ LOE
Required qualifications and experience:
· A university degree, a Master’s or PhD in Agricultural Economy / Economy or Marketing;
· At least 10 years of experience in agricultural economics with respect to the meat industry;
· An expert who has a practical experience and understanding of the global beef market;
· Experience with meat value chains, marketing, or knowledge of global market requirements is advantageous.
The AGP-LMD Project’s Deputy Chief of Party will oversee the overall performance of the assignment and ensure the activities are executed in accordance with the terms and conditions in the SoW. Furthermore, AGP-LMD policy advisor, will provide day-to-day coordination support and monitor the proper execution of the consultancy.