Market potential for the local Djallonké goat in Southern Benin: empirical evidence from two rural markets

L H Dossa, Barbara Rischkowsky*, Regina Birner^** and C Wollny***

Georg-August University of Goettingen, Institute of Animal Breeding and Genetics, Tropical Animal Husbandry,
Kellnerweg 6, 37077 Goettingen, Germany
hdossa@gwdg.de
*International Center for Agricultural Research in the Dry Areas, P.O. Box 5466, Aleppo, Syria
**International Food Policy Research Institute (IFPRI), 2033 K Street, NW, Washington, DC 20006-1002, USA
***Faculty of Life Sciences and Engineering, University of Applied Sciences Bingen, Berlinstrasse 109, 55411 Bingen, Germany

Abstract

A market study was undertaken to examine the effects of selected qualitative and quantitative traits of goats on their market price. Data on breed type, sex, coat color, age, health and live bodyweight were recorded from 288 goats traded in two rural markets in Southern Benin. Buyers were questioned about the purpose for which each animal was bought. A double logarithmic hedonic model was applied to link prices to the animal’s physical attributes.

The results indicated that liveweight and sex were significant (p<0.001) characteristics affecting prices. The estimated elasticity of demand for goats with respect to liveweight was 0.99. Given the significant premium associated with these characteristics, goat keepers could significantly improve their profitability through the adoption of appropriate management and marketing practices.

The results provide an empirical evidence of the high market potential of the local Djallonké goat.

Keywords: Consumer preferences, goat characteristics, hedonic model, prices

Introduction

Goats are kept in smallholdings in almost all rural households in Southern Benin (Broek van den and Gbego 1994). They are mainly regarded as a valuable and quick source of cash, security and insurance against crop failure and hardship. However, domestic imports of animals on the hoof from Niger, Burkina Faso, Nigeria and Togo, continue to rise annually (DE-MAEP 2004). In the year 2000, Benin officially imported an equivalent of 6% of its total national flock of goats and sheep (DE-MAEP 2002). Between 2000 and 2003, surveys of market prices conducted in different local markets showed an increase of 18% in the average price per head of goat (DE-MAEP 2004). These official figures provide a striking evidence of the growing local demand for small ruminants, especially goats. Hall et al (2004) argue that small-scale farmers form the vital core of the production system that will meet the growing demand for livestock and livestock products in urban centers in developing countries.

Thus, this increased market demand for small ruminants in Southern Benin offers local smallholders with opportunities for raising their incomes and may stimulate them to more actively seek productivity increases. However, these farmers, especially those geographically marginalised, face many challenges in seizing these opportunities.

The access to reliable markets for outputs across the year is one of the most important factors that affect the decision of small farmers to undertake production and to adopt improved production systems practices (Rola et al 2003). Drawing from studies conducted in Asia, Devendra (1999) argued that the lack of knowledge of markets and marketing systems combined with the neglect of linking the production of small ruminant to their marketing have resulted in reduced revenue from small ruminants to farmers and made them unable to respond to demand and supply forces.

A clear understanding of markets and marketing systems including a better knowledge of the preferences of consumers for particular physical characteristics of the animals should ensure technological improvements that are affordable to small scale farmers, can enable them to respond to the demand of local market and give them better remuneration opportunities.

In Benin, there is a paucity of marketing studies on livestock, especially on small stock such as goats and sheep. The objective of this study was to examine the traits of goats that are important for buyers and how these characteristics affect goat prices in the local markets.

Materials and methods 

Data collection

The rural markets of Azove and Klouekanme in Southwestern Benin (Figure 1) were purposively selected for this study based upon their relative regional importance.

Since goats and sheep are marketed together, a reconnaissance survey was done and repeated three times on a monthly basis in each market to identify the different types of sellers of small ruminants and to record the composition of the supplies (species, sex, and breed types). Traders were interviewed in the early morning at their arrival in the market place with a short structured questionnaire that included information on their provenance, the composition of supplies (disaggregated by species, sex and perceived breeds) and the three most important traits of goats perceived to affect their sale price. A total of 260 sellers of small ruminants were interviewed at four-day intervals (every market day) between January and March 2002 on a total of 26 market days. On the same days, data on prices and physical traits of purchased goats were collected by trained and experienced enumerators. A total of 288 buyers were interviewed at the most frequented market exit once the transaction between the buyer and the seller was completed.

The physical characteristics recorded from each traded goat are summarized in Table 1. The apparent health status of the animal was subjectively rated by the Animal Health Technician representing the local livestock extension services and who was part of the research team.

The weight of the animal was obtained using a weighing scale. In addition, the buyer was questioned about the purposes for which the animal was bought. The age of the animal was estimated from its dentition as follows: milk teeth or one pair of adult incisive = 1 year old or less; two pairs of adult incisive = 2 years; three pairs of adult incisive = 3 years and four pairs of adult incisive = 4 years old and more.

Data analysis

Cross tabulation procedure in SPSS version 10 (SPSS Inc. 1999) was used to explore the relationship between the different categorical variables. Because of unbalanced data sets, Univariate GLM procedure was used to explore the main effect of each categorical variable on the interval variables (live weight and price). Least square means (Lsmeans) generated were compared using LSD means tests. The double logarithmic form of the hedonic price function was used to relate the recorded prices to the traits of traded animals. The hedonic price model treats each characteristic separately and estimates implicit price for each trait through regression analysis. The price of the animal is then computed as a summation of all implicit prices. To improve the statistical power of the regression analysis, only animals old of four years or/and more were considered. They represented about 74% (212 out of 288) of the animals measured. Similar to the variable “Age”, the variable “Apparent health status” was not included in the regression analysis because, out of the 288 animals measured, only 12 were rated as sick.

In the double logarithmic specification, the relationship between the recorded prices and the physical attributes of the animals was expressed as follows:

ln (P) = ln a + b₁ln (BW) + b₂ (RAC) + b₃ (CCOL) + b₄ (FEM) + b₅ (MAL) + μ

Where:

ln (P) is the natural logarithm of the price of a goat in FCFA

ln (BW) is the natural logarithm of the live weight in kg

RAC = 1, if animal is of Sahelian type or crossbred Djallonké-Sahelian (0 otherwise)

CCOL =1, if animal has a bright color (0 otherwise)

FEM = 1, if female animal (0 otherwise)

MAL = 1, if male animal (0 otherwise)

ln(a) is the intercept; b₁ is the live bodyweight elasticity; b₂ to b₅ are the regression coefficients indicating the marginal change of the price with a respect to a change of corresponding characteristic and μ is the error component.

Results  

General market characteristics

In the two markets studied, small ruminants were sold alive and the animals were not weighed. Two distinct groups of sellers were present: the traders/retailers (54%) and the small-scale producers (46%). The majority (54%) of all traders were women. About 72% of the producers declared that they come occasionally to the market to sell their animals to generate urgent needed cash while the remainder 28% mentioned that they come to the market only to sell their sick animals. All the sellers come from the surroundings of the two markets (8.2 ± 6.2 km). Of the total supply of small ruminants (1510 animals) recorded in the two markets, 56% were goats and 44% sheep. The majority of the goats (81%) were perceived as of local Djallonké breed type, 6% were perceived as of Sahelian breed type and the remaining 13% were perceived as crossbred between Djallonké and Sahelian breeds. The majority (58%) of the animals were castrated males, 25% were female, and 17 % were intact males.

Of the total of 288 traded goats recorded in the two markets, 38% were purchased by traders for resale purposes, 38% by consumers for ceremonies or festive purposes, 7% for sacrificial purposes, 8% for rearing purposes and the remaining 9% by caterers. Caterers include people who own a small restaurant and sell food and cooked pieces of meat but also those who have a small butchery.

Characteristics and price of the traded goats

There were differences between sex, age group and breeds of goats purchased for different purposes (Table 2).  

Only animals of local Djallonké breed were purchased for sacrificial purposes. The majority of Sahelian/crossbred traded goats (75%) in the two markets were bought for resale purposes. The remaining 25% were mainly bought for catering purposes. Also, animals bought for rearing and sacrifices purposes were younger than those bought for resale, catering and ceremonies.

Buyers were bargaining with sellers over the prices and the prices they paid varied significantly (p<0.05) with the purpose for which animals were bought. The average price of a goat was 13,223 ± 6,025 FCFA. The results of observed live bodyweights and prices disaggregated by reasons of buying are shown in Table 3.

Animals bought for resale, catering and ceremonies purposes were heavier and those bought for sacrifices fetched higher prices per kg than the others. Sahelian or crossbred animals were significantly heavier but fetched similar prices per kg than those of local Djallonké animals (Table 4).  

Differences of prices between castrated, female and intact male animals were significant (p<0.05); and highest prices per kg were paid for castrated animals.

Traits of goats determining the price

The 260 sellers ranked the healthiness of an animal (77%) followed by its heaviness (54%) and its perceived breed type (66%) as the most important factors determining its sale price. The hedonic price estimated for goat is presented in Table 5.