|The Courier N° 138 - March - April 1993 Dossier: Africa's New Democracies - Country Reports : Jamaica - Zambia (EC Courier, 1993, 96 p.)|
by Jan MULDER
Since the start of the European Development Fund in the early 1960s, considerable importance has been attached to the financing of rural development projects in Africa. The main emphasis has been on increased agricultural production, of which animal production is an integral part.
At the beginning of the 1980s, a division was created within the EC Commission with the job of evaluating in a systematic way, the various projects which had been the subject of EDF financing.
As regards animal production projects, the conclusions of the evaluation which was undertaken were set out in a document produced in 1984 entitled: 'Basic Principles of Livestock Development'. This contained numerous recommendations, amongst which were:
-Sectoral policy concerning the development of livestock
resources should be focused on the livestock producer and his family with
particular attention being paid to the role of women.
-The scale of financial resources to be allocated to such efforts must be in reasonable proportion to the livestock sector's potential and its current contribution to national wealth.
-Every possible effort should be made to promote and encourage private initiatives of all kinds in the provision of the goods and services - such as drugs, animal feed, credit and marketing of livestock products which are needed by the livestock producer.
-It is essential to formulate and implement a pricing policy for inputs and livestock products alike.
It was around the same time that the EDF was confronted with numerous demands to finance a vaccination campaign against rinderpest. In fact, one of the earliest EDF interventions in the development of African animal resources had been in this area, when the Community participated in the financing of 'Joint Programme 15'. Together with other donors, a vaccination campaign had been financed in several African countries over a period of about 15 years. Indeed, the programme envisaged the eradication of rinderpest in Africa and it almost succeeded. It was thought, when donor financing stopped towards the end of the 1970s, that rinderpest was under control, if not eradicated, but in the event, it was too early to claim victory.
During the early 1980s, it was clear that rinderpest outbreaks were occurring on a large scale in various African countries. What was the reason for the recurrence of this disease, despite the massive financial investments which had been made in the earlier campaign?
Several explanations were advanced although it was clear that these were not all applicable in the same way to each of the countries concerned. These included:
-The fact that the allocation of government budgets to
agriculture and, in particular, to livestock development, had not reflected the
importance of this sector's contribution to the national economy.
-The practice whereby all veterinary graduates were automatically recruited to the state veterinary service, the major part of whose budget was utilised for salary payments rather than operations in the field.
-The policy of almost all governments of carrying out vaccination campaigns free of charge and of subsidising to a large extent, other forms of veterinary intervention.
It was, therefore, concluded that the essential point was not to provide funds for a specific campaign against a specific animal disease, but rather to establish a policy directed at finding additional or alternative financing for the veterinary services. And it was not just these services that needed attention. There was also the question of better financing for livestock services, bearing in mind the object of increasing animal production in Africa to meet the needs of an expanding population. The problems of adequate nutrition and the overgrazing associated with it required no less attention than those arising from the outbreak of contagious animal diseases.
The Organisation of African Unity (OAU) and, in particular, its Inter-African Bureau of Animal Production proved to be an interested partner in the development of new policies which envisaged the establishment of better livestock services for farmers.
In 1986, a Financing Agreement was concluded between the OAU and the Commission of the EC. The agreement set out two approaches:
-Those countries which were confronted at that time with
outbreaks of rinderpest would be assisted immediately in stemming the spread of
-For all other countries, financing agreements for the purpose of rendering livestock services more effective would only be concluded after the successful conclusion of a policy dialogue aimed at making more adequate finance available for those working in such services.
The Financing Agreement set out five options for achieving the latter. These options, and subsequent experience with them may be summarised as follows:
Direct payment for services rendered This policy aims at a situation whereby farmers contribute to all services provided by the government. The degree of government subsidy can vary but should, in the course of a project period, be adapted.
This approach is now almost universally accepted in Africa, as far as the provision of drugs and non-compulsory vaccinations is concerned, although the degree of subsidy varies from country to country.
Proceeds from the sale of drugs and vaccines are put into a revolving fund. Sometimes, however, the operation of these funds is problematic. In certain countries, inflation is high and prices are not adapted accordingly, while the time which elapses between purchase and sale of new drugs can sometimes be too long.
The purchase of new drugs and vaccines may also pose difficulties as not all African currencies are easily convertible into those currencies that are required for buying new inputs. In addition, there is sometimes the problem that drug importing is the exclusive responsibility of a state company which is saddled with old debts, although a solution to this could be found in encouraging the establishment of private companies. EDF financing can be used for both purposes.
There are, however, countries that prefer to continue with the provision of services which are subsidised or free of charge. The latter is sometimes the case with compulsory vaccination campaigns. If the budgetary resources of the government are insufficient, it cannot simply be left to the donor to fund these subsidies on a permanent basis. Instead, a system could be developed in line with the other 'dialogue points' from the OAU-EC Financing Agreement.
Direct or indirect taxation for services rendered. In several countries, taxes levied on the livestock sector already exist. For various reasons, however, the sums collected are not put back into the sector itself. There are good reasons for adhering to the principle of a consolidated fund (unified finance) for government budgets. However. in some countries and under certain conditions. it should be possible to introduce specific taxes and levies to be used to finance specific actions. For example, it might be possible to form a livestock development fund. If such a fund were set up at national level, it could suffer from the same problems as those which characterise existing revolving funds (for example. complex administrative procedures). A better approach might be to establish these funds at regional or even district level, in order to simplify procedures. It is important, after all, to ensure that where a farmer is paying special taxes, he can see the benefit in the form of better services. And when special funds are developed at a local level, the next step, as outlined in the 'dialogue point' of the Financing Agreement which follows, is a small one.
Development of farmers' associations, pastoral associations or cooperatives. Instead of the Government being responsible for the provision of veterinary or other services, farmers themselves could be encouraged to organise the provision of these services. An obvious precondition is that the law must permit the formation of such associations and cooperatives. The law must also regulate the conditions under which these organisations can be formed and should protect their members.
has only limited experience of encouraging the organisation of livestock services in this way. Elsewhere, the picture is somewhat different. By way of example, the responsibility for maintenance of watering points constructed in dry areas has increasingly been laid on the shoulders of the users.
EDF funds can be used to provide better veterinary infrastructure for the benefit of members of societies who, in turn, are obliged to recruit qualified personnel for veterinary and extension services.
This is one step in the direction of privatisation. The ´dialogue point' which follows suggests moving towards this goal in a more general way.
Privatisation of the veterinary profession. Of all the 'dialogue points', this is the one that has attracted the most attention. There is considerable enthusiasm for it. The establishment of the system in practice, however. has proved to be a long and cumbersome process, although the prospects in some regions are still thought to be good. There is, after all. no reason to believe that in Africa, contrary to the situation elsewhere in the world, it is impossible for private veterinarians to earn a living in rural areas.
Experience has shown that a number of conditions are helpful in starting a privatisation programme. In the first place, it is necessary to have a national professional organisation with powers to decide who should be allowed to set themselves up in veterinary practice and to regulate their activity. It is the profession itself that must control the quality of the services it provides. Secondly, the legislative framework must exist to allow private veterinarians to operate. There must also be an assurance from the government that there is not unfair competition from their own services which are often subsidised.
The role of the donor is in the provision of credit. It can form a fund which guarantees the loans that banks provide to selected veterinarians and could also consider giving premiums to encourage veterinarians to leave government service and establish themselves. The donor might also give loans for associated activities in recognition of the fact that, at the outset, it might not be possible to generate sufficient income solely from the practice or from veterinary pharmacy.
Of course, it is also essential for the development of private practice that the market generates an income for farmers which is sufficient to allow them to pay for the services they receive. The OAU-EC Financing Agreement recognises this in the last 'dialogue point'.
Imposing a special levy on imports of animal products which distort the local market. This points addresses the problems which arise from the dumping of animal products on African markets. A levy should prevent this from happening. Ideally, the proceeds of such a levy should be used to finance services provided by the government but the principle of 'unified finance' prevents this in most countries.
In the preparation of EDF interventions in the livestock sector, all of the above 'dialogue points' need to be considered, but it should be recognised that there is no solution which is universally applicable. Solutions will always have to be adapted to the specific conditions of the country or region or perhaps even the individual location concerned. The European Commission has an open approach on this which is aimed at finding the best system in each case. J.M.