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Privatization of Veterinary Services in Sub-Saharan Africa

Module produced by Ahmed E. Sidahmed, IFAD Technical Advisory Division, 1998.

The privatization of veterinary services: IFAD's project design

IFAD realizes that any increase in livestock productivity is unlikely to be sustainable without animal disease control. It also understands that animal health improvement technologies (whether modern or traditional) are universally acceptable among herders in sub-Saharan Africa (SSA). The major ills of livestock (parasitic, viral and bacterial diseases, as well as diseases caused by nutritional deficiencies or imbalances) are widely known. However, the provision of the customary preventative measures such as vaccination, the control of internal and external parasites, etc., is beyond the financial capacities of most countries in SSA, and the efforts of those which have these capacities are easily jeopardized by uncontrolled border movements and poor or non-existing quarantine systems.

IFAD's overall policy in designing projects supportive of the privatization of veterinary services

IFAD considers the main objective of the privatization of veterinary services (see Box 1) to be the provision, at affordable prices, of better, but sustainable, services to individual livestock producers and, at the same time, the reduction of the budgetary burden on national governments. For IFAD, therefore, the issue has been how to undertake economically feasible measures capable of mitigating the immediate consequences of the present deteriorating situation and to develop sustainable services. IFAD has not been alone in this task and has worked closely with other donors (as initiator or cofinancer) in a variety of activities which, on design, tended to respond to the special circumstances of each country. Furthermore, IFAD's overall policy in designing projects supportive of privatization has been in line with the overall economic and agricultural development policies of many recipient countries applying structural adjustment programmes. Many lessons have been learned from both the successes and the failures.

Box 1: The Privatization of Animal Health Services: Sub-Saharan Africa (SSA) Three quarters of the population of Africa is rural, and the majority are smallholders living below nationally defined poverty lines. Animal agriculture dominates the economics of these people and contributes (when non-monetized benefits from traction and manure are included) to 50% of the agricultural domestic product. High population growth has forced many of the traditional extensive herders in arid/semi-arid areas (pastoral/transhumant systems) to change their practices to a more sedentarized market-oriented system, and many have moved, with their disease-susceptible animals, and settled with shifting cultivators. A reciprocal change among both (mono-systems) has transformed large and ecologically, geographically and environmentally diverse areas in SSA to mixed crop/livestock production systems in which livestock production is having a significant impact in improving agricultural stability. However, considering the high rate of human population growth in SSA (the population will increase 2.6 times in about 31 years and reach almost the projected number of the Chinese population of 1 294 million), a 4% annual increase in the production of meat and milk (to reach 19 and 43 million tonnes, respectively, by 2025) will be needed to meet the growing demand. This cannot be achieved with the current level of production and would require stable measures to improve health, feed, breed and management. A large portion of livestock in SSA perish annually because of diseases, and the loss has been estimated at around USD 2.0 billion every year. Therefore, livestock diseases are one of the main causes of the large gap between the supply and demand for meat and milk in SSA. During the last three or four decades, heavy investments in animal health services have been supported by the international community by means of grants or subsidies. Most of these activities were designed and executed through the public sector. In spite of success stories and the records of efficient veterinary services and institutions, the economic plight of many governments has been reflected in the collapse of these institutions (the shortage of foreign exchange to import drugs and veterinary equipment and the collapse of the administrative and field survey programmes), leading to calls for sustainability through cost recovery and privatization. Privatization has emerged as an issue mainly in response to the continued deterioration of public animal health institutions in most of the developing countries, the intensification of livestock production (e.g. in Asia and the Near East) and the need to treat individual animals rather than herds and flocks; the shift from traditional operations to commercialized ones and hence the shift of livestock ownership from traditional ethnic groups with considerable indigenous knowledge (e.g. Africa and China) to less experienced commercial farmers who require higher levels of service, and finally as a measure responsive to the considerable increase in the number of veterinarians (e.g. India, East Africa) to above the absorptive capacity of the public sector. In addition to the above, the loss of large amounts of donor funds monies and failed programmes (e.g. the massive vaccination campaigns of the 1960s and the 1970s) led governments and donors to seek alternative and sustainable means of delivering animal health services to individual holders, a very difficult task in the absence of supporting infrastructure and considering the high cost of inputs (drugs, vaccines). But most of the governments applying the highly desirable structural adjustment programme measures recommended by the donors have no ability to import and distribute drugs and vaccines at affordable prices. In most cases, measures for privatization and cost-recovery precede the institutional reform needed to mitigate the adverse impact of such policies (e.g. the increased prices of services and supplies) and impose serious difficulties on the most vulnerable groups, the poor smallholders, while at the same time favouring the richer commercial producers. In addition, measures to ease the economic plight of urban consumers by providing cheap imported livestock products from developed country markets have deprived rural livestock producers of the income needed for the purchase of drugs and vaccines.

Design and implementation dimensions and enabling conditions

Donors, including IFAD, have dealt with the privatization issue based on the following main, but broad and highly confounded, dimensions and prerequisites.

Strategic

These are related to the types of services and tasks to be privatized. Privatization should be selective and should not stretch to those tasks which could spill over to many producers, thereby running the risk of loss of control in a way which threatens a whole country or region (e.g. large-scale vaccination campaigns, dipping programmes where private participation is low, border control and quarantine); or where quality control is crucial and highly technical (vaccine production); or for national activities such as policy preparation, research and extension. Privatization should preserve and improve veterinary services that have already been established and continue to be provided in an effective manner. In som places (e.g. eastern Africa), legislation must be revisited to allow the participation of para-veterinarians in the administration of health services after appropriate training. Moreover, training programmes for animal scientists and technicians should be expanded to include basic animal health practices.

Furthermore, the competitive nature of the services should be understood, and the basis for an effective free market economy should be respected. IFAD should encourage borrower governments to avoid offering free services for activities that could be handled by private practitioners. The gap between competitive price and quality should be reduced by training para-veterinarians and auxiliaries and through periodic revisions of their course curricula. On the other hand, it should be indicated to the veterinarians that they should demonstrate their proficiency if they are to compete successfully with the less expensive services provided by the auxiliaries. Also, privatization should not be limited to the sale of drugs, but should be extended to those practitioners who treat sick animals and undertake related activities.

Finally, strategic considerations should include the provision of sustainable financial resources and incentives for private practitioners. Governments should allow the establishment of financial institutions capable of providing rural financing to IFAD's target groups by resolving such problems as the eligibility of the beneficiaries and the quality and the timeliness of the financial services (loans and deposits).

Institutional

The choice of private operators (herders, farmers, village practitioners and auxiliaries, low and high-level technicians, animal scientists and professional veterinarians) should be based on a set of logistic and technical measures responsive to the specific requirements and capabilities of each community, country and region. In broad terms, these measures include: the improvement of existing veterinary skills and the availability of veterinary drugs and equipment on a free-market basis (both urban and rural markets); the establishment of appropriate credit and financial institutions capable of enabling livestock producers to obtain adequate health services on a sustainable cost-recovery basis, the establishment or strengthening of existing professional (veterinarians) and producer (herders) associations to ensure the delivery of quality services at affordable prices; the strengthening of the livestock disease, diagnostic, treatment and prophylactic facilities required for the support of private practitioners; and the training of practitioners and producers (individually or through their organizational bodies) in areas such as animal disease control, data collection and management, feed improvement and water-resource management. Once such logistics have been put in place, the government's role should be supervisory so as to ensure that livestock producers get better services.

Training becomes an important issue, particularly in countries where the skills of veterinary graduates have deteriorated in spite of an increase in the number of graduates. Besides the lack of technical skills, many of these graduates lack the managerial skills to assume responsibility for the operation of commercial businesses. In addition, training should respond to the changing needs in veterinary services that have emerged from breed-improvement and crossing programmes and, in some countries, to the need for the advanced tools of animal-health-management programmes (e.g. computerized management programmes).

Professional and grass-roots organizations and independent interest groups are needed to facilitate privatization. Training and capacity building will depend on the nature and the role of these institutions. For example, the training for national professional organizations in the areas of business management and administration should allow these organization to support private veterinarians and practitioners effectively and should provide them with the ability to monitor the quality and the prices of the drugs sold to livestock producers. On the other hand, herders and village auxiliaries grouped into grass-roots organizations (producer associations of herders, butchers, traders, etc.) or based on traditional institutions require the skills and the resources to ensure a continued and sustainable supply of inputs (drugs, vaccines), the effective and efficient administration of these inputs and the flexibility to manage other, related activities (water points, feed banks, range resources).

Agro-ecological

Terrain, rainfall, temperature and other agro-ecological factors are important elements to consider when designing activities leading to privatization. The climatic differences within a country or a region have different implications on the approach to be taken. The delivery of services to sedentary farmers, for whom the required logistics (e.g. transport, storage) are less diverse, is much easier and attractive for trained professionals compared to the delivery of services for mobile animals moving in wide areas. Therefore, it is more likely that the private sector would establish sustainable delivery and administration for expensive services for herds and flocks raised in a fixed place (e.g. mixed crop/livestock systems and commercial farms), while the self-help approach relying on auxiliaries and community organizations would be more effective for the rather difficult, widely dispersed pastoral/transhumant systems.

Also, climatic differences define whether or not certain services must be supported by the public sector. For example, dipping in drier areas, where tick infestation is not acute or where the local breeds are of an economic value too low to attract additional investment, might require the intervention of the government in the process.

Options and approaches in support of the privatization of drug and vaccine sale and distribution through Herder communities, volunteers and village auxiliaries, and professional veterinarians and commercial enterprises

The governments of countries in SSA are aware of the need to move towards the privatization of animal health services and have demonstrated their understanding of this economic reality to IFAD and to the international donor and technical communities on several occasions. IFAD and other donors have given consideration to the specific realities and needs of each country. In addition, IFAD has emphasized that its interventions should fulfil its mandate of poverty alleviation and, accordingly, should coincide with its determination to seek alternatives that ensure sustainable animal health delivery for its target groups, the poor smallholders.

The general approach has been to intervene by building upon the existing resources and capabilities of the public sector and to maintain a balanced share of tasks, while moving ahead with the transfer process. As has become evident through experience, this approach requires political support, financial resources and a thorough understanding of the needs and capabilities of the beneficiaries and of service institutions. In most cases, IFAD and other donors have provided the financial resources, but success, where achieved, has only occurred where political support has been maintained by the government and where a focus on community needs and involvement has been assured during the project design and implementation process.

Providing support to professional veterinarians and commercial enterprises is the option normally considered as an entry for the process of privatization. Typically, a limited amount of loan money is provided to a few veterinarians to support them while they undertake drug purchase and sale and animal treatment practices. An environment of full-cost recovery would be essential for this activity. Otherwise, the private veterinarians may not survive in the business. Private veterinarians are more successful in operating in and near urban areas, where the clients are mainly owners of commercial dairy, poultry and fattening enterprises.

In agro-pastoral areas (e.g. of Cameroon), the limited support given to private veterinarians has been fruitful around urban areas, where well-established private veterinarians hold training courses for their clients. However, there have been few incentives for these professionals to establish clinics or to travel in order to provide services to the mobile subsistent-herders in extensive areas, where the animals are widely dispersed and drug-use is low, both representing high-risk factors among emerging veterinary practitioners who rely completely on drug distribution.

The approach for transferring some essential services to herder communities has required a thorough understanding of these communities and of their priorities, interests and local leadership. This approach is suitable and effective in the dry areas among migratory and semi-sedentary herds and flocks, where common diseases - other than large-scale outbreaks - are less frequent, the distance to be travelled is large and the demand for drugs and dips is irregular and therefore unattractive for individual professional practitioners. Furthermore, with the severe deterioration and sometimes total collapse of public-sector services, even the irregular services provided in the past have become unavailable. On the other hand, it has been proved through experience and social surveys that the herders themselves are willing, capable and in many cases more efficient than government field staff in carrying out basic veterinary practices.

A system of gradually building up the capacity of local communities has been adopted at the lowest level (e.g. village or tent group), leading to the formation of democratically elected groups (pastoral or herder groups). The groups have then been enabled and empowered financially (credit, revolving funds) and through training and the transfer of basic technologies and safety measures (basic animal care, the management of financial accounts, the scheduling of work plans, etc). As each association has become more experienced and cohesive, it has been expanded to include the management of other community-related functions (e.g. water and grazing resources).

With time, regional associations have been consolidated into a national organization, and the membership of each local and regional organization has been expanded to include more groups. An important breakthrough was reached when the communities participated in designing their own work programmes and budgets.

11. Experience has shown that herders, after training, can be given responsibility for administering and dispensing most of the commonly used drugs, while maintaining the necessary quality and safety standards.

Also, experience has shown that rallying animal health delivery practices around objectives and common goals of significant importance to herder communities (e.g. tsetse fly campaigns, the management of water points and common grazing areas) is essential for the successful formation of specialized groups entrusted with the administration of animal health services.

However, it has become evident that the sustainability of these institutions and private practitioners cannot be achieved without government support in the form of legislation, training and extension. It has also been learned that the cooperation of government authorities is crucial. Otherwise, the total collapse of public services (as in the Central African Republic) would be the only inevitable pressure that would force the government to collaborate with donors supporting privatization at the grass-roots level.

The approach of using herder institutions to support privatization has not been a total success or failure. Whereas remarkable success would be expected in some locations (e.g. the Central African Republic), difficulties arise in others. For example:

• Attempts to establish cohesive herder communities in Cameroon failed mainly because the goals, such as handling simple veterinary care and drug distribution activities, were not important enough to assure the cohesion of producers, unlike the associations which had evolved during previous projects to address common threats, such as tsetse control activities, and thereby continue to survive.
• On the other hand, the M'bororo herders of the Central African Republic (Box 2) were essentially immigrants who needed a cohesive and united front for survival, and this contributed, along with other factors, to the success of their organization. The other factors were the bottom-up approach followed and maintained in forming these organizations and their evolution from regional associations to a national federation. Besides, the total collapse in the public sector represented a good opportunity to overcome the expected reluctance of the public sector (i.e. in Kenya) to speed the process of privatization.

Box 2: The Impact of Some Achievements: The Case of the Central African Republic The institution-building component of the project in Central African Republic transformed a group of regional associations into a national service organization capable of playing a major role in livestock development . The National Association of Central African Herders (Fédération nationale des éleveurs centrafricains FNEC) needs further financial support, strengthened technology-transfer mechanisms through the transfer of the training and extension functions from the government, collaboration and complementary activities with professional associations (herders, butchers, farmers, etc), and a broader base and consolidated democratic culture to assure its sustainability. However, FNEC's animal health delivery experience provides a replicable model for other agro-pastoral and pastoral areas in Africa and other regions. A highly positive correlation was established between the introduction of full cost-recovery and drug availability. Household survey results 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 the wealthier livestock producers. As a result of health improvements, the number of livestock in the Central African Republic increased from 878 000 in 1974-76 to 2 700 000 in 1992, while meat production grew by 8 000 tons a year (1986 estimates). Although livestock sales increased in general terms and income improved for all herders, the richer herders benefited more than did the poorer ones. Although there is much work to be done and in spite of an overall general uncertainty in relation to the political environment in the Central African Republic, the concept of herder associations capable of managing the delivery of drugs has remained vital for over two decades.

Supporting tools

The tools for support were technical (promoting group formation and training), financial (the provision of equipment and supplies, the establishment of revolving funds and livestock development funds from livestock-service recovery costs) and policy-based (lifting subsidies on drug sales, dipping and voluntary vaccination, pricing and trade policies). As has become evident through experience, the socio-political factors were the most difficult to resolve.

Technical tools

Promotion or support for traditional groups. Promotion for the formation or support of existing traditional herder associations (e.g. in Cameroon, the Central African Republic, Kenya, The Sudan) aimed at attaining a gradual build-up of these associations to handle simple veterinary care and the administration of drugs. The plans were to increase the capacity of the associations through training and political and legislative support and by ensuring sustainable revenue from selling drugs, as well as providing veterinary services to the association members. The ultimate goal was to consolidate these organizations (e.g. village-level pastoral groups) into regional and national federations empowered to undertake other activities such as drug imports and staff training.

Training. Training is an important activity in most of the veterinary privatization projects. The objective of training (para-veterinarians, voluntary and part-time herders, traditional medicine-men, (Box 3) veterinary scouts, dipping committees, community entrepreneurs, grass-roots institutions, etc.) has been to assure sustainable outreach for mobile herders and agro-pastoralists in order to guarantee their access to animal health care and related services (e.g. accounting and the management of fees, private clinics and drug dispensaries) in a cost-effective and sustainable manner.

Box 3: FAO: Training Animal Health Auxiliaries in Cameroon and Uganda Scope The Pan African Rinderpest Campaign (PARC), which is a regional programme technically supported by FAO, with financial support from the European Union, the Overseas Development Agency, OIE, IEMVT, the Organization of African Unity, USAID, UNICEF, IAEA and the Pan African Veterinary Vaccine Center (PANVAC) is playing an important role in supporting privatization schemes in SSA. The programme has engaged in successful dialogue with some 25 OAU/IBAR/PARC (International Bureau for Animal Resources) member states. This continuing effort has led to the implementation of PARC projects that have strengthened actions against rinderpest and included the restructuring and revitalization of animal health services. By the end of 1993, 12 of the 25 member countries were in the process of organizing privatization schemes. The PARC philosophy is centred on self-sustainability through cost- recovery. Membership requirements include the provision of veterinary drugs and non-compulsory vaccines to livestock producers at market prices and without subsidy. The dialogue with governments seeks assurances that public services will be discontinued in areas where private practitioners are permitted to operate and that private practitioners should charge fees for certification, border inspection, laboratory services and market inspection. The programme supports the establishment of credit facilities, supervision, monitoring and debt collection, provides advice on the size and form of loans (country dependent) and discourages subsidized loan grants. The following is an example of the training animal health auxiliaries (AHAs) in Cameroon and Uganda. Methodology and achievements so far: UGANDA: The task of training Karamajong pastoralists (the clusters interviewed include Ugandan Karamajong pastoralists, as well as ethnic groups from Kenya, The Sudan and Ethiopia) to operate in remote cattle camps was based on their skills and traditional knowledge. The survey revealed that the Karamajong are able to describe and identify disease entities in a manner corresponding to that in developed countries. Also, it was concluded that the Karamajong, if given the opportunity, are prepared to adopt modern drugs and biological products despite exorbitant prices and scarcity. During the survey, 40 pastoralists, including indigenous institutional leaders such as medicine-men, warriors and local generals, were interviewed. Based on the results, 20 AHAs representing the various clans and ethnic groups received a two-week training course in August 1993. The trainees were awarded certificates after successfully completing the training programme, which should enable them to participate in using heat-stable vaccine against rinderpest. CAMEROON: A demand-based ethno-veterinary survey of M'bogoro herders in the north-eastern province of Cameroon provided PARC with the background needed to conduct a one-week training course on vaccine handling, vaccination, ear tagging and the determination of drug dosage. Following this, 23 AHAs were trained and equipped by vaccinators for the rinderpest field trial vaccination programme. The training programme was carried out in close collaboration with PARC, the veterinary services of Cameroon and Heifer Project International (HPI).

Financial tools

Revolving livestock development funds. Revenue from the sale of drugs or the dispensary of health services is an important assurance that the services will continue. The revenues have been collected from the sale and distribution of drugs and vaccines provided by the projects to the supporting public-sector institutions or to the herder associations. Increased cash flow, credit management and cost/price monitoring are important aspects of this process. An important feature in this respect is cost recovery and the willingness or ability of livestock owners to pay for the services. Many external donors recommend, as a condition for loan effectiveness or disbursement, that governments transfer the revenue from the services to special accounts or revolving funds. Well-managed livestock development funds (LDFs) ensure the stability and sustainability of animal health services. The issue of the centralization/decentralization of the LDFs is a sensitive one, as most governments recommend that all revenues be deposited in the central treasuries. Through this experience, IFAD, as well as other donors, realized the importance of establishing decentralized LDFs in order to motivate the staff to collect the fee and the users to pay it, considering the fact that these are revenues and not taxes. Similarly, the decentralized administration of the use of the funds generated by cost recovery has provedd to help in improving resource utilization. This is mainly because local staff are closer and understand the needs of their units better than do headquarters administrators. The task also encourages the wider participation of community members and helps cut down administrative costs in comparison to the bureaucratic undertakings of officials at higher levels.

Loans. Some projects have established credit lines so as to encourage and assist professional veterinarians, para-veterinarians and entrepreneurs who are willing to establish health practices and carry out drug sales. Others have encouraged governments to modify loan procedures through specialized banks (e.g. agricultural banks) in ways responsive to the specific needs of rural animal health practices and the distribution of veterinary supplies.

Policy dialogue

Government commitment to the privatization of veterinary services has been a major condition for entering into loan agreements. Such commitments have also been assured through declarations made at regional and continental fora (e.g. member states in the Pan-African Rinderpest Campaign, the Tenth OIE African Conference on the Privatization of Veterinary Practice in Africa, 1993). Most features of these commitments centre on full cost-recovery for veterinary services, government assurances of the supervision and monitoring of the provision of safe and quality services, legislative changes or amendments which allow para-veterinarians to practise health services, recognition of the need for market surveys prior to the establishment of private practices, encouragement for specialized banks to provide loans at low interest rates, training and price and livestock import regulations, etc.

Selected source material

IFAD and its cooperating institutions: (a) Programme Management Department: livestock projects in Cameroon, Central African Republic, Kenya, The Sudan (appraisal, supervision, completion reports); (b) Jack Kozub et al. (1992), "IFAD's Experience with Project Design and Implementation"; (c) Institut d'Elevage et de Médecine Vétérinaire des Pays Tropicaux (IEMVT 1989), "Review of IFAD's Livestock Projects"; (d) A. E. Sidahmed (1993), "Pastoral and Common Resources in Africa: Some Experiences and Lessons of IFAD. Office of Evaluation and Studies: (a) Bekure and Malhotra (1986-89), "A Framework for Designing M and E Systems for Livestock Development Projects"; (b) Yates (1991), "A Technical Review of Nine Livestock Projects with Emphasis on Problems and Proposals Relating to M and E". Economic Policy Division: (a) Monares (1994), "Privatization and Rural Development Services: Implications for the Rural Poor".

FAO: (a) The Tenth OIE Conference (1993), "Veterinary Practice Privatization in Africa"; Pan African Rinderpest Campaign Newsletter (September 1993), "Privatization of Animal health Services in Africa: Present Scenario and the Future".

The World Bank: (a) de Haan and Bekure (1991), "Animal Health Services in Sub-Saharan Africa: Initial Experiences with Alternative Approach; (b) de Haan (1992) "Privatization of Livestock Services: Training Needs (Côte d'Ivoire workshop); (c) Umali, Feder and de Haan (1992), "The Balance between Public and Private Sector Activities in Delivery of Livestock Services"; (d) OED Precis (May 1994), "Livestock in Africa: Support for Pastoralists".