Privatization of veterinary service Poor animal health is a major constraint to increasing livestock production in many developing countries. Full livestock productivity is highly dependent on the availability of high-quality and regularly provided animal health services. In many developing countries, central government veterinary institutions traditionally provide basic animal health services. These institutions are generally underfunded, however, which limits their ability to deliver sustainable animal health services. Fiscal restrictions and the subsidization of animal health services have also often resulted in compromises in the quality and quantity of services they provide. Over the years, countries throughout the world have implemented structural adjustment programmes (SAPs) to reorient rapidly deteriorating government institutions and services, and improve their efficiency. In developing countries, where livestock constitutes an important source of livelihood, privatization of animal health services has been a major focus.
IFAD has adopted a case-by-case approach to the privatization of veterinary support services, taking into consideration the varying realties and needs of each country. While designing projects supportive of privatization, the Fund has harmonized its policies with the overall economic and agricultural development policies of the recipient countries applying the SAPs. However, IFAD, like many other donors, retains that only selected veterinary services should be privatized, with governments remaining responsible for activities such as national research and extension, legislation and policies, disease surveillance, transboundary livestock movements, and quality control of livestock inputs and products.
The choice of the medium for the delivery of animal health services (that is, whether community-based or professional organizations) is also often determined by agro-ecological factors and the ability of beneficiaries to pay for services. In areas where sedentary farming systems are practised, private professional veterinary services are more likely to succeed because farmers are less dispersed, and transport and other infrastructure are more readily available. In pastoral/transhumant systems, on the other hand, professional veterinarians have few incentives to establish private practices because herds are widely dispersed and drug usage is low. Community-based livestock workers are the ideal solution in this situation. In many developing countries, there is no legal framework for the private provision of veterinary services. National governments need to create an enabling environment for private services by establishing legislation in areas such as price and livestock import regulations, liberalization of input procurement and distribution, registration of private associations, and provision of legal definitions for all private-sector actors, specifying the roles of professional and community practitioners. IFAD has facilitated the review and amendment of laws related to animal health services in many of its projects. The ongoing Family Sector Livestock Development Programme, Mozambique, for instance, supports legal reform aimed at the liberalization of veterinary services in the country. A lesson that can be drawn from IFAD’s experience is that without government commitment to the process of privatization, developmental initiatives are unlikely to succeed. Commitment in this case refers not only to the review of relevant legislation but also to the elimination of subsidized veterinary inputs and services. As part of the privatization process, IFAD has provided for full cost recovery3 programmes in numerous animal health projects. Because of resource constraints, governments often cannot assure the regular delivery veterinary services. They have therefore turned to cost recovery as a way of financing sustainable services. Cost recovery offers an opportunity for a gradual shift from subsidization of services to full privatization. A noteworthy example is IFAD’s successful experience in the Central African Republic, where the implementation of full cost recovery was instrumental in increasing the availability of drugs. A highly positive correlation was established between the introduction of full cost recovery and drug availability. Household surveys in the project area showed that once full pricing was introduced, drugs became more available, especially among the poor, who purchased, on average, 50% more drugs per animal than did large-scale farmers. Cost recovery programmes should, however, be implemented with caution; beneficiaries need to participate in the process and fully understand why they need to pay for services. In the Camelid Producers Development Project in the Andean High Plateau, Bolivia, camelid producers, accustomed to government subsidization, were reluctant to pay for veterinary services and products. Similarly, in the Animal Health Services Rehabilitation Programme, Kenya, fee increases resulted in a decrease in animals dipped and clinical cases treated. This, in turn, led to less revenue for the revolving fund, which was consequently insufficient for the purchase of inputs and the maintenance of facilities. In conjunction with cost recovery programmes, IFAD has encouraged the establishment of revolving funds. Governments have been advised to place revenues obtained from the sale of drugs and the use of facilities (such as dips and clinical treatments) into revolving funds to ensure that sufficient funds will be available for the services to be supplied. The results obtained under the IFAD projects have been mixed. The 1994 livestock project, Central African Republic, established a revolving fund for veterinary products under the National Livestock Development Agency (ANDE), but this was later transferred to the National Livestock Producers’ Association. Herders used and administered the fund well, with sales surpassing the appraisal target by 500%, and reaching well over 80% of the target group. In line with the liberalization of animal health services, the management of revolving funds should, however, be decentralized, with the direct beneficiaries having control over the fund. Control by beneficiaries can be encouraged by fostering their sense of ownership and motivating them (including through incentives) to improve management and maintenance of facilities and services. Beneficiaries should also participate in fund management. To manage funds successfully, however, they will need training to improve their management, technical, financial and procurement skills. During the privatization of animal health services, care should be taken to ensure that smallholders – IFAD’s target group– are not totally excluded from services. In Kenya, after the introduction of cost recovery and later full privatization, it was found that smallholders could not afford to vaccinate or dip their herds. In contrast, an estimated 100 000 medium-to-large livestock owners benefited from vaccination services. This experience underscores the need to evaluate privatization processes in relation to the ability of the target group to pay user fees. Such an evaluation will also help determine how privatization should be introduced and implemented. The protection and promotion of animal health is a key factor in all animal production systems. Safeguarding animal health is considerably more difficult in developing countries than in industrialized ones because of fragmented traditional farming systems, small herd sizes and the scarcity of veterinarians. These problems are compounded in the tropics by a wide range of diseases and parasites and an unreliable supply of drugs and vaccines. In some cases, products are available on the open market from general traders – but with no guarantee of genuineness and no technical advice to assist in their proper use. The abolition or collapse of free state veterinary coverage and the privatization of the veterinary profession may in time lead to improvements. At present, however, privatization has sometimes disadvantaged both farmers (who have to pay for once-free products and services) and veterinarians (whose income drops when they lose a government salary). The nomadic lifestyle of many livestock owners may challenge the effective delivery of veterinary services. For instance, in the Animal Health Services Rehabilitation Project, Kenya, it was assumed at appraisal that animals could be vaccinated throughout the year. During implementation, however, it was discovered that herds could only be vaccinated at specific times of the year. IFAD identifies three types of support tools necessary for an effective delivery system:
Access to veterinary inputs can be facilitated by revolving drug funds. RDFs are established for the bulk purchase of drugs that are then sold to farmers above cost price. Problems can arise in the management of these funds for a number of reasons, however: there are often shortfalls in accounts; funds are sometimes diverted to other uses; and where funds are centrally administered, there may be insufficient accountability and transparency. The RDF in Phase II of the Western Savannah project, Sudan, for instance, started promisingly in 1984, but subsequently experienced severe administrative and technical problems. Drug orders were eventually limited to Trypanosomiasis treatments, but numbers still continued to fall. Difficulties were attributed to competition from the black market, understaffing and the complexity of the receipt system. In contrast, the National Livestock Project, the Central African Republic, involved the creation of a national herders’ association, which provided an effective drug distribution system (thereby filling the gap created by the collapse of the public sector in 1970). It also organized training programmes for individual herders on the correct use of veterinary drugs. Herders effectively used and administered a RDF, and sales surpassed the appraisal objective by 500%, reaching 80% of the target population. This experience shows that herders’ groups can act not only as lobby groups for herders’ interests, but also as efficient conduits for veterinary inputs. IFAD has also promoted capacity-building of national laboratories to enable them to produce locally required drugs and vaccines, thereby reducing foreign exchange transactions for the importation of drugs and vaccines. This approach has not always produced the expected results. One of the achievements of the Family Sector Livestock Development Programme, Mozambique, has been the development of a stable vaccine for Newcastle disease. The project has already tested the vaccine in village pilot sites with good results. It is now investigating production possibilities and reviewing legislation regarding vaccine production and distribution in support of its wider field use. In contrast, in Bangladesh, the vaccine for Gumboro disease was not produced as planned due to the absence of the concerned scientist, lack of the antigen for Gumboro production and lack of necessary laboratory equipment. Thus, projects supporting internal drug production need to focus on various issues, among which technical skills development, the rehabilitation of existing facilities, construction of new facilities and the development of a viable extension system. In response to the shortage of veterinary products, several IFAD projects have relied on imported veterinary products and vaccines, usually sold to farmers under a cost recovery programme. The animal health programme initiated under the Second Village Livestock and Rural Development Project, Madagascar, for instance, successfully provided effective vaccination coverage of different types of livestock in the project area using imported vaccines. Government veterinary services often handle veterinary input supply in developing countries. Inadequate resources, however, have forced governments to liberalize the supply of veterinary inputs such as drugs and vaccines. Various IFAD projects have shown that in a favourable economic and legal environment responsibility for drug supply can usefully be transferred to private veterinary practitioners. The Sheep Development Project, Kyrgyzstan, for instance, has promoted the use of private veterinary practitioners to carry out national disease control and drug supply, under government contract. Despite this move towards privatization, the supervision mission established that overly bureaucratic licensing procedures and excessive registration fees remain an obstacle to the establishment of private veterinary services. Along with other donors, IFAD continues to emphasize that governments should maintain and even take greater responsibility for quality control of drugs and vaccines and regulations regarding their use. Public supported veterinary services Despite the consensus that improved access to appropriate livestock inputs and support services is essential for the improvement of livestock productivity, the delivery of animal health services in developing countries is generally poor. Governments are unable to fund animal health services adequately and to deliver them efficiently, which is a main cause of low animal productivity in these countries. There are a number of reasons for the shortcomings of veterinary services in developing countries:
Support to the public sector in the delivery of animal health services has been a common feature in all IFAD livestock or livestock-related projects. For the most part, these activities have been unsuccessful, however. The Animal Health Services Rehabilitation Programme, Kenya, for instance, had as it main objective the improvement of animal health service delivery through the strengthening of public-sector veterinary institutions. The activities within the programme included disease control and surveillance, strengthening of management and field extension services, and rehabilitation of veterinary support facilities. Despite the resources provided, the programme experienced, among other problems, delays in the procurement of drugs, vaccines, equipment and vehicles; the inappropriate allocation of vehicles; inadequate training; lack of accountability; and inadequate staffing. Experience has shown that where governments lack commitment to the development process and project objectives, development initiatives are unlikely to succeed even with brilliant project designs. In the Punjab Smallholder Dairy Development Project, Pakistan, low government commitment was cited as a principal reason for the project's failure to meet its targets. Lack of political will was evident in salary levels, which were too low to retain or recruit qualified staff. In the Livestock Development Project, Samoa, a project-supplied clinic and laboratory were actually never used, initially because of the impossibility of recruiting veterinary officers under the terms and conditions offered, and subsequently because of a government freeze on recruitment due to budgetary constraints. IFAD has been at the forefront of efforts to improve the delivery of animal health services to pastoralists. For example, in the Northern Pasture and Livestock Development Project, China, rural veterinary centres and dipping tanks were improvements that specifically targeted pastoralists. The National Livestock Project, the Central African Republic, increased the technical and management capacity of ANDE by offering refresher courses to its staff. Consequently, by project end a larger share of animals were vaccinated, and about 80% of herders treated their animals regularly for internal and external parasites. These measures effectively translated into lower mortality rates and increased meat production. IFAD’s experience in the Second Village Livestock and Rural Development Project, Madagascar, is an excellent example of a successful project, with a significant upgrading in the delivery of animal health services. The project improved veterinary drug distribution and vaccination coverage of different animal species. This achievement was attributed to the new veterinary and vaccination centres, which facilitated staff access in remote areas. Even where projects have managed to achieve positive results, the issue of sustainability of services remains a concern. In the same project in Madagascar, although targets set in the vaccination programme were met, a decline was registered towards the end of the project. This was attributed to cuts in government funding and the dismissal of the village vaccinators. The failure of state veterinary services to streamline their delivery of animal health services has prompted IFAD and other donors to shift their focus to community-based animal health. Despite the change in approach, IFAD continues to support the strengthening of public animal health institutions in priority areas. In the ongoing Family Sector Livestock Development Programme, Mozambique, IFAD has supported the training of extension workers in meat inspection in an effort to enhance the government’s role in veterinary inspection of animal and animal products for human consumption. The provision of animal health services in developing countries has for the past several years been undergoing changes as a direct result of the structural adjustment programmes (SAPS) being implemented by national governments. A major focus of SAPs has been the transfer of the delivery of animal health services to community animal health workers.1 The objective is to increase smallholder accessibility to services while reducing the financial burden on governments. This then frees limited governments resources, which can be redirected to the delivery of vital public services such as disease surveillance, livestock movements, research and quality control of veterinary drugs. In many developing countries, public animal health services are characterized by inadequate budgets, poor infrastructure and insufficient staff. Although private veterinary practices do exist, they usually only benefit the more profitable medium-to-large commercial farmers in urban and peri-urban areas rather than small farmers in rural areas. Community animal health workers therefore offer a vital solution to the effective delivery of animal health services to smallholders, particularly in areas where public and private veterinary services are inadequate and expensive. Community animal health workers are increasingly playing an important role in the delivery of animal health services in developing countries. Experience has shown that they can provide reliable veterinary services in remote areas, where herds are scattered and infrastructure is poor - and particularly primary health care services such as disease diagnosis, the treatment of common diseases and vaccination. In the Qinghai/Hainan Prefecture Agricultural Development Project, China, barefoot veterinarian assistants reach remote areas, where they provide technical advice and such basic veterinary services as disease control, vaccination and parasite treatments. Various IFAD-funded projects provide evidence that community animal health workers can cover the needs of all livestock produced in a given area, delivering affordable, efficient and sustainable animal health services. Community animal health workers have a number of advantages:
Privatization of animal health services in rangeland areas requires special consideration. As a group, pastoralists are not perceived as being profitable clients for private veterinarians, largely because their herds are widely dispersed, thus increasing transaction costs. Consequently, IFAD’s programmes have spearheaded herder delivery systems in an attempt to benefit the rural poor more directly. Programmes have trained herders to treat animals and have facilitated access to veterinary inputs and drugs. The first Livestock Development Project, Central African Republic, approved in 1979, was an early example of a project aimed at training herders in animal health. Over 4 000 pastoralists were taught to use common veterinary drugs. Selection procedures, however, involved a lower degree of community participation than is now the norm: the project simply trained herder chiefs and their sons. Herder auxiliaries were monitored and found to be working according to recommended standards. In addition to skills, community workers need resources to assure an uninterrupted and sustainable supply of inputs such as drugs and vaccines In the Smallholder Livestock Development Project, Bangladesh, more than 8 000 women poultry vaccinators were trained and also provided with basic veterinary kits. The decrease in poultry mortality and the fact that poultry workers were able to extend their services outside the project area are two indicators of the project’s success. The project not only improved the provision of animal health services but also created an opportunity for women to set up small income-generating businesses. The concept of the Village Animal Health System is well established in the Agricultural Productivity Improvement Project, Cambodia, and Village Animal Health Workers (VAHWs) in many areas are contributing to the improvement of the livelihood of the rural poor and women the development of the country. Of the many factors critical to making such a system work, the training given to the VAHW is certainly one of the most important. It is this training that allowed villagers, in a short period of time, to become confident in dealing with other farmers, with medicine and vaccine suppliers and with key figures, such as government. One of the difficulties experienced by animal health care projects has been targeting. For example, although the Livestock and Pasture Development Project in the Eastern Region, Morocco, intended to train 600 animal health workers, far fewer obtained qualifications. According to the IFAD mid-term evaluation report (1996), the principal reason for the shortfall was strong resistance by qualified government professionals to the recruitment and training of additional animal health workers. In later IFAD projects, the complementary roles of community health workers and professional veterinarians were clearly outlined and agreed upon and such conflicts did not arise. The experience in Morocco highlights two important lessons. The first is the need for a clear and sound legal framework that spells out the relationship between community-based animal health workers and professional veterinarians and defines their respective roles. The second is the need for all stakeholders and actors involved in developing a community-based animal health care delivery system to agree upon and commit themselves to the project’s objectives. 1/ The term used to refer to the non-professional animal health workers varies widely and can include, besides community animal health workers, ‘paravets’, community livestock workers, primary animal health care workers, ‘barefoot’ veterinarians and veterinary auxiliaries. 2/ Organizations run by a board of directors elected by the membership, and accountable to them. 3/ Cost recovery is the concept of ‘user-paid’ fees for specific services acquired from public services.
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IFAD
considers that the privatization of veterinary services has two main objectives:
Underlying
all of IFAD’s approaches is a recognition of the need to create
an environment in which both public and private veterinary sectors can
thrive interdependently. The Fund has experienced both successes and failures
in this area, and the lessons it has learned have helped shape its subsequent
approaches.