CASE 3: LINKING COMMUNITY SLAUGHTER HOUSES TO URBAN MARKETS; KAJIADO COUNTY, KENYA
TABLE OF CONTENTS 1.0 Introduction ................................................................................................................... 3 1.1
Back ground- origin and history ............................................................................................................. 3
1.2 Context – Kajiado County .............................................................................................................................. 4 1.3 Livestock market access routes ...................................................................................................................... 5 Chart 1: Market routes ....................................................................................................................................... 5 1.4 The Story line .................................................................................................................................................... 6 1.5 Products’ flow and distribution ...................................................................................................................... 7 Table 1: Products and distribution .................................................................................................................. 7 Box 1 The Value Chain ..................................................................................................................................... 8 1.6 Partnership Arrangements .............................................................................................................................. 8 1.7 Map of actors .................................................................................................................................................... 9 Table 2: Main Actors their roles....................................................................................................................... 9 Table 3: Service Actors their roles ................................................................................................................. 10 1.8 Market Dynamics and Drivers ................................................................................................................. 10
2.0 The Innovation ............................................................................................................. 12 Chart 2: The innovation diagram ................................................................................................................... 12 2.1 Learning points from the experience and innovation ............................................................................... 12 2.3. The Future of the Kiserian slaughterhouse .......................................................................................... 13
3.0 Additional reading and references ................................................................................ 14
1.0 Introduction This case write up is about Case 1 in the “Learning Route: Innovative Livestock Marketing from Northern to Eastern Africa� and features the Keekenyokie community owned slaughterhouse in Kiserian, , Kajiado County, southern eastern Kenya. 1.1 Back ground- origin and history The Keekenyoike Market and Slaughterhouse, located in Kiserian, is a Community own and managed business established in 1981 without external support or funding The abattoir slaughters livestock from Maasai pastoralists and sell meat to Nairobi. It offers crucial market access Communities of Maasai pastoralists from south Kenya and part of north Tanzania, covering over 200,000 pastoralists households and family linkages It is a central point for innovation and learning in community owned and –managed livestock enterprise - building its focus on both livestock business and landscape sustainability. The vision is to be an active partner in pastoralist livestock business, and development in the transformation of the pastoralist livestock value chain in East Africa serving the pastoralist livestock keepers while delivering high quality meat to urban markets produced in a sustainable way. The slaughterhouse itself has grown from processing 30 cattle per day in 2005 to 160 per day in to date, while being able to offer pastoralists a 30% better price on their livestock competing markets. It is the most vibrant pastoralist own livestock market in Kenya trading more than 250 cattle and 600 shoats per day 16 members(all clan-related) of the Malaysia pastoralists communities came together in 1981 to establish a slaughterhouse, to be able to sell their meat directly in urban markets to solve the serious problem of access to meat markets. In 1992 it was registered as a private company business. The name Keekonyokie refers to the Malaysia clan to which the members belonged toand which gives the name to the wider area of Kiserian. In business terms, Keekonyokie slaughterhouse was organized as an integrated value chain where its members would sell t own livestock , and are able to compensate market shortages through contributions. In order to have continuity in their business of the slaughtering even during droughts,. each member contributed (between one and five cattle). Members were paid back the livestock they contributed at the time of restocking, and these animals were bought through the revenue gained fro slaughter bussiness. The restocking livestock are sourced from related Malaysia communities in Tanzania, and trekked or trucked back to Kiserian . The Keekonyokie slaughterhouse livestock business was designed to function as a social enterprise with strong social insurance mechanism to the community as below,: 1. Contributions to health/ education/ funeral expenses for members and their family member (there are maximum amounts agreed, in specific cases these are topped up with individual voluntary contributions). No loans or other financial services are provided 2. Special contribution to members particularly affected by droughts in terms of
organizational structure, Keekonyokie has a complex and well through way of being managed by the members: 3. The board of directors, consisting of seven of the 16 members, and including chairman, secretary, treasurer and other four members, is elected annually based on the year’s performance (indicators: income generated and volume of business). Membership in the board of director has rotated substantially during the year. 4. The association adopted a written constitution in 1992, as it was a requirement for being registered as a company. This did not however alter the rules of the association. Members meet once a month and share the revenue generated to the members, minus the social contributions given to the members (for medical, health and funeral expenses) 5. Individual members can agree to contribute extra funds to other members in difficult 6. Main costs met by the association are: electricity, water, salaries, insurance, cartridges, income tax, auditor’s fees, maintenance & repairs, registration fee licenses. Meat certification is carried out by two vets seconded by government to the business Keekonyokie livestock marketing is an example of most successful community initiative in livestock development. The most innovative element of the practice is the way the business is organized and operated commercially yet community owned with social equity and the integration of different actors in both livestock and meat chain. It is a unique case of community empowerment to solve their market access problems 1.2 Context – Kajiado County Kajiado County is in the former Rift Valley province. The neighbouring counties includeTaita Taveta County to the South-east, Machakos County to the East, County to the Northeast, Kiambu County to the North and Narok County to the west. Kajiado County also borders with Tanzania State to the South-west. The climate in Kajiado is of a semi-arid nature (rainfall ranges between500-1250mm) and a lot of wildlife thrives in that area. In recent years there has been a longer period of drought where there has been little or no rain. The main ethnic community of Kajiado County is the Maasai community who are renowned for their strong cultural heritage and exquisite jewellery. There is an increased influx of other people from various regions of the country who flock the area and boost the millions acquire from tourism sector of Kajiado. The Maasai people are pastoralists and therefore rear large herds of cattle that have contributed to the semi-arid nature of the land due to consumption of vegetation cover Please- further information about Kajiado County is contained in Case 1- Siana and Kilitome Market Access Committee in thus same route.
1.3 Livestock market access routes Chart 1: Market routes
Livestock – Stock routes and Markets Nairobi
Kiambu
Dagoretti
Narok
Machakos Isinya Kiserian
Emali Mashuru
Oldonyonyokie
Shompole
KENYA
Bissil Mbirikani Namanga Kimana
Engare Nalbor
Kitumbeine
Engare Nairobi Longindo
TANZANIA
Nichael
Arusha
Rombo
Mombasa/ Taita Taveta
1.4 The Story line Vision:
The future vision of Keekonyokie meat business is to secure “Higher and stable incomes for Malaysia pastoralists particularly in the drought years”
Mission:
Mission is to build a fair trade meat marketing chain from the producer pastoralists to the Keekonyokie community own abattoir to the retail outlets and supermarkets in Nairobi city.
Goals:
To archive its vision Keekonyokie business has to: -‐ -‐
Provide a regular supply of high quality cattle(even in drought year) from producer pastoralist members to the Keekonyokie Abattoir; and Provide a regular supply of high quality butchered meat to the Nairobi Supermarkets.
Objectives: a) Objective: To supply to meat high quality meat to supermarkets outlets: 1. 2. 3. 4. 5.
Improve abattoir infrastructure to meet government environment regulations Improve meat handling and preparation to meet government hygiene regulations Organize the separation of slaughtering ‘brand’ carcasses from other animals Install equipment, infrastructure and processes for preparing meat for supermarkets Introduce any necessary change to the handling and management of the abattoir to meet government requirements for brand registration 6. Establish and register the Keekonyokie quality ‘brand’ for butchered meat b) To use the MAC to offer for meat market chain services 1. Seek support for capacity building training of market actors and producer members 2. Offer Transaction Security Services for both livestock and meat marketing chain 3. Seek source and capital to support new and high quality cattle breeds 4. Organize regular supply of quality cattle to meet demands of the abattoir 5. Facilities the process of registering the Keekonyokie ‘brand’ 6. Seek source of capital to make infrastructure and equipments to the abattoir associated with ‘brand’ requirements. 7. Promote the Keekonyokie ‘brand’ name 8. Negotiate order for ‘brand’ meat with Supermarkets(Uchumi and Nakumatt)
1.5 Products’ flow and distribution Table 1: Products and distribution 1. PRODUCT: a) Product name:
Meat on bone, ovals(matumbo), meat cuts and de-boned meat
b) Product Type:
Red meat
c) Distinguishing Features:
Largely organically produced beef from Malaysia pastoralists
d) How product is consumed:
Sold directly to consumers through retail butcheries
e) Research undertaken by Business on product:
Informal research on market trends, demand and supply dynamics
2. PRODUCT FLOW AND DISTRIBUTION: :actors C. Distributors
Meat transporters using trucks, pickups and motorcycles
D. Wholesalers
Keekonyokie Slaughter House, Burma Meat Traders,
E. Supermarkets
Local slaughter house
F. Processor-Shops
Small scale informal processors- deboning, mincing etc
G. Institutions
Veterinary Department, Ol-kejuoado County council, Ministry of Health, NEMA
H. Retailers
Small scale butcheries and processor shops Malaysia pastoralists- livestock traders/butchers-transportersbutcheries- consumer
flow
3. CLIENTS:
a) Types of Clients and Numbers
b) Why they buy the product
Client Type
Butchers
Number
+200
Client Type
Why they buy the product
Butchers
For onward retailing
Institutions
Institutions
+4
Individ ual meat buyers
Meat processors
+300
4
For their clients e.g. colleges Individual buyers
Direct consumption( households)
Processors
For processing- e.g. sausages
The value chain diagram looks as follows� Box 1 The Value Chain
$ Meat Sellers
Pastoralists Cattle Maasai
Sell
SLAUGHTERHOUSES
Traders
Livestock Market Access Company
1.6 Partnership Arrangements The partners that have worked with the MACs include: a) SNV- A- capacity building and partnership development b) Ministry of Livestock Development- extension services c) IFAD- slaughterhouse improvement and bio gas plant d) Agritrade Livestock Company- private sector trading partner e) livestock and meat retail outlets
Large Scale Consumers Urban Consumer Institutions Processors
1.7 Map of actors The following are the actors: Table 2: Main Actors their roles Main Actors Producers
Description and roles
The marketing process begins with the pastoralists and agro-pastoralists at village level. Traditional pastoralists keep sheep, goats and cattle as a source of wealth ‘on the hoof’, provide clothing, shelter, food and when necessary cash. The traditional pastoralists generally have a non-commercial approach towards livestock preferring but instead rear them due to social considerations. The balance of the herd and resistance to drought are important factors. Traders and In livestock marketing traders and middlemen play major role with similar Middlemen functions but somewhat differing roles. Primary Itinerant traders move cattle from producers to primary markets. They often source animals from the homes of the producers and deal in only a few animals at a time while middle level traders buy and move cattle from secondary to terminal markets. Middlemen operate mainly at the market take animals from producers, itinerant traders and middle level traders and negotiate with buyers and transporters. Traders often use middlemen after they have journeyed from distant areas and have no time to negotiate with buyers and transporters. Traders are considered by some to be exploiting pastoralists because of their lack of knowledge of market prices and conditions. Slaughter house with modest facilities privately owned that offer services at a fee. Keekonyokie Their services include flaying, evisceration, meat cutting, offal cleaning and Slaughter processing. They employ slaughter attendants either fulltime or on production House demand. The facilities are mostly lacking in hygiene standards and practice. Most attendants are untrained in slaughterhouse operations and meat handling Meat These are traders operating at slaughterhouses who purchase livestock then Traders and arrange for slaughter, selling the carcass as a whole or in parts. They also engage in Agents buying and selling meat on contract orders or according to specifications. The traders are usually present in large numbers and have good access to market information therefore able to control prices according to demand. However lack of transparency characterizes the meat trade Meat Micro enterprises in the meat industry thrive on buying the carcass direct from the Processors slaughter houses through meat traders or on supply contract for particular and Retailers sections. They then chop it into cuts and process into other meat products like sausages, bacon and ham. There is formal price setting according to the quality of meat supplied. Retailer Small scale meat retailers, mostly self-employed purchase meat as carcasses in the Butchers slaughter houses or from whole sale meat traders then hire transport to deliver to their business usually in the urban centers or suburbs. The butchers often obtain meat on credit from middlemen and a bad debt is serious problem.
Table 3: Service Actors their roles
Service Providers Private Sector Actors (Informal Business Sector) Local authorities
The private sector dominates livestock marketing, gradually harnessing a multitude of uncoordinated players into a system that operates under market forces. It has been responsible for the bulk of investment over the last 10 years giving hope to the poorer segments of society - pastoralists, relatively poor livestock traders and butchers and poor urban consumers - who are the dominant players.
Local authorities own marketing facilities including marketing areas (fenced or unfenced) and collect cess (tax) from market actors for their use. The council facilitates marketing via licensing and management of the infrastructure, organizing market days, provision of market information and maintenance of the facilities Transporters Transporters and trekkers move animals by vehicle or foot to secondary and and terminal markets. The poor condition of many roads dictates high charges to cover Trekkers costs of repairs. In addition, many pastoralist areas cannot be reached by trucks hence trekking is most common.
Department of Veterinary Service (DVS)
Vehicles used are sometimes unsuitable for carrying livestock; animals are sometimes injured and killed by crushing on each other especially on poor roads. The DVS is responsible for prevention/control of disease and livestock movement. The Veterinary Department in Kenya has long suffered from inadequate funding, transport, equipment, drugs and other essentials. Consequently diagnostic facilities have become poor resulting in breakdown of the quarantine and treatment measures for marketed livestock. Traders must obtain a ‘No Objection’ permit from the point of destination, which in practice means that he, or his representative, must travel in person to obtain it. This is a source of complaint, but is enforced to ensure that there are no diseases or other risks present at the destination. On his return the trader then obtains a movement permit from his local Veterinary Department
1.8 Market Dynamics and Drivers (A) Market Drivers Kekonyokie meat business as an investment for meat industry is supported by various friendly factors, which include availability of beef cattle, stable political environment and market access to urban markets, among the others. The critical enabling factors include: • • • • • • •
The culture of Red meat consumption- Kenya has strong red meat eating tradition that dictates the consumption pattern and volumes. A liberalized meat market with strong private sector participation A Slaughterhouse with capacity that is adequate for current domestic demand Access to a large cattle supply base able to balance urban meat demand Transparent and strong abattoir business governance and management Modern communication and infrastructure connecting to urban markets Mobile telephones and M-pesa services for faster trade communications and money transfer within market chain
• • • •
Trained and experienced government veterinarians as service providers Availability of meat cold rooms and storage facilities to safe guard meat perish ability A Strong traditional business competitiveness practice with assured social equity A Dynamic and effective local Community learning knowledge management and innovation culture
(B) Enabling Government policy The beef value chain is definitely a Government of Kenya priority livestock, especially for beef, is considered the highly feasible economic activity in the marginal areas (ASAL) that comprise the biggest percentage of agricultural land in Kenya. The government also recognizes the contribution of livestock (including beef) to the pace of achieving the millennium development goals of economic growth and poverty eradication. With respect to Government of Kenya Intervention, the beef sector is fully de-regulated and highly liberalized. Government only interacts with the market to quarantine for disease prevention and control which is positive for the development of the sector rather than impeding its growth. In 2010, the government formulated the Meat Control (local Slaughterhouse) Regulations, 2010. This has far reaching implications on the operations of the meat processing industry particularly local slaughter houses. The new policy sets out stringent measures to control meat hygiene, handling, sanitation among others. Most of the slaughter houses have not yet complied with the new regulations and risk closure should the Director of Veterinary Services decide to enforce the same.
2.0 The Innovation
Chart 2: The innovation diagram
$ Meat Sellers
Pastoralists Cattle Maasai
Sell
SLAUGHTERHOUSES
Traders
Large Scale Consumers Urban Consumer Institutions Processors
Livestock Market Access Company
2.1 Learning points from the experience and innovation (A) Challenges and constrains affecting livestock and meat chains a) Cattle attract higher returns along the informal marketing chain as compared formal market chains(Kenya Meat Commission, farmers choice etc) b) In the current livestock market chain the brokers have a better margin from the livestock trade than producers c) Livestock Terminal markets next to the slaughterhouses have more lucrative point of trade and more returns to producers than primary and secondary markets d) There is no transparent mechanism of price determination in the livestock market sphere e) Livestock producers receive only 23.1% of the main terminal market prices per kilo in Nairobi f) The general organization of livestock and meat markets is weak and less determinable g) The state of value addition in the livestock and meat chains is minimal h) Frequent drought periods cause massive depreciation of stock. i) High incidences of livestock diseases affect production and trading due to frequent quarantine. j) Low capitalization and limited access to credit for production as well as trading. k) Absence of organized market facilities and active involvement of local authorities in marketing and market development. l) Defective livestock transport mechanisms and continued tradition trekking to markets affects quality of stock m) Lack of appropriate meat processing facilities at the local slaughterhouses constrain value addition by actors.
n) Unfavourable policy environment for meat industry constrain positive development of the market chain. (B) Opportunities for intervention to resolve the challenges and constrains. a) Improving range productivity to improve the livestock production and hence increase incomes of the producers. b) Improving the traditional meat sub sector knowledge management and competitiveness. c) Improving the traditional meat sub sector knowledge management and competitiveness. d) Initiating value addition practices in the meat chain, these practices are currently absent. e) Commercialisation and effective organization of both livestock and meat market chain. f) Sensitisation, support for better breeds, extension support and training in livestock disease management would all go along way to stimulate commercial orientation of the producers who have weaker traditional livestock production practices g) Adopting a BEDS approach in the entire sub sector is critical to building long-term commercial sustainability of the value chain. There is need to develop structures and systems that encourage uptake of services by working with progressive producers and service providers. h) Identification of opportunities and entry points for embedded service promotion and provision to stimulate growth in market chain. i) Engagement in long term support programmed to guarantee and sustain the positive impacts of the pastoralist livestock Enterprise Initiative. h) Comprehensive partnership with stakeholders including government department and development institutions is most essential. 2.3. The Future of the Kiserian slaughterhouse The socio economic environment within which the Masan pastoralist livestock keepers seek their livelihood has been changing substantially in the last couple of years. The government which has hitherto played a key role in the operation of the meat sector is increasingly taking a back seat. Erratic weather patterns continue to pose major challenges to the pastoralist production systems and challenge traditional coping mechanisms. At the same time the forces of globalization are increasingly exposing African pastoralist producers to new challenges as well as new forces of marginalization. These dynamics include changing land tenure systems, food quality and safety concerns, and information and communication technology among others. Community owned and managed livestock business like Keekonyokie abattoir will continue to be of fundamental importance in the livelihood strategy of livestock keepers in the arid lands. Producers need them to access productive resources- inputs, technology, and to sell their livestock products. Unfortunately community enterprises like Keekonyokie businesses are usually not yet fully developed and even where they work, they face many constraints that prevent them from exploiting new markets and product development opportunities. As the demand/supply is today, Kenya continues to be a meat deficit country and will possibly not be able to develop a strong external market. Currently, from surrounding countries this great opportunity for community own enterprises like Keekonyokie livestock business.
3.0 Additional reading and references http://www.ravinvest.biz/downloads/Story60_Kibue_ChallengesforKeekonyokieMAC.pdfhttp://www. epzakenya.com/UserFiles/File/MeatIndustry.pdf http://softkenya.com/agriculture/slaughterhouses/ http://www.facebook.com/pages/kiserian-slaughter-house/110307902326393 ftp://ftp.fao.org/SD/SDA/SDAR/sard/KFFHC_slaughterhouse_Kenya.pdf