18. In the past governments in Africa have intervened in various ways in order to regulate and increase the efficiency of the marketing system. These interventions have ranged from the control of livestock and meat prices to the outright purchase and sale of animals and meat. Experience however shows that the scope for increasing efficiency lies neither in attempts to regulate and control the market participants, nor in efforts to control prices, nor in the creation of parastatals but rather in facilitating the operations of the market participants and instituting measures which reduce their costs.
19. The effect of government policy instruments in the form of (a) taxes, licences.. and cesses, (b) procedures required for the movement and export of livestock, (c) controlled prices, and (d) direct state interventions through parastatals in livestock and meat marketing, need to be assessed periodically. Policies adversely affecting the efficiency of the marketing system need to be reviewed and streamlined with the view of reducing market costs and stimulating the livestock industry.
20. Using licences as an instrument to control the number of participants in the market should be avoided. It tends only to decrease the level of competition and hence to increase traders' margins. Care should be taken that taxes and cesses imposed on marketed livestock do not unduly increase prices at terminal markets.
21. In some countries the procedures required for obtaining permits for the movement and export of livestock are cumbersome and costly. Streamlining these in order to reduce the time that traders have to spend chasing permits will reduce marketing costs. Efforts to stamp out unofficial levies will also help improve the efficiency of the marketing system.
22. Controlled prices for live animals and meat do not seem to be effective instruments for protecting the interest of producers and consumers. Most commonly they have only succeeded in introducing distortions into the market. These interventions have often resulted in the spawning of black markets and the redirection of the flow of livestock away from established markets and in bringing financial losses on government organisations which tend to be the only enterprises to observe the controls fully.
23. When parastatals or other government agencies engaged in livestock and meat marketing are run efficiently, they can increase competition and stimulate the marketing system. Unfortunately, success stories are the exception rather than the rule. As stated above, livestock marketing systems in Africa are fairly efficient, except under certain circumstances such as drought or when there are large seasonal fluctuations in supply. The evidence also indicates that the inefficiencies are most severe in situations where governments have directly intervened. This implies that governments should refrain from direct interventions in livestock marketing systems, and that they should concentrate on policies that direct efforts and resources into effecting measures which will relax constraints that participants in the system cannot remove. These include (1) improving the infrastructure of livestock marketing; (2) streamlining procedures for the movement and export of livestock; (3) the provision of market information through the mass media e.g. on volume of livestock traded at major markets and, if possible, average prices by sex, age, and species; (4) regulating the standards of products and services; - and for those countries exporting livestock and livestock products - (6) negotiating favourable trade agreements in export markets; and (7) the proper alignment of taxes and foreign exchange rates to promote exports.
