Adigrat University

College of Business and Economics

Department Of Management

PROPOSAL ON:

ASSESSMENT ON SKIN AND HIDE MARKET IN GANTA AFESHUM WEREDA,

TIGRAY, ETHIOPIA

Submitted by group 5 members:

No. Full Name1. Efrem

Mhretab2. Redae Kalayu3. Letebrhan

Desta4. Fitsum

Kindeya5. Fitsum Abrha6. Birhanu

Haftu

Submitted to: Zaid Negash (PhD)

January, 2015

Adigrat

TABLE OF CONTENTS

LIST OF ABBREVIATIONS........................................iii

1. BACK GROUND OF THE STUDY....................................1

1.1. Introduction.............................................1

1.2. Statement of the Problem.................................3

1.3. Study Objectives.........................................4

1.3.1. General objective....................................4

1.3.2. Specific objectives..................................4

1.4. Research Questions and Hypotheses........................5

1.4.1. Research Questions...................................5

1.4.2. Research hypotheses..................................5

2. DATA SOURCES AND RESEARCH METHODOLOGY.......................6

2.1. Description of the Study Area............................6

2.2. Sampling Techniques and Sample Size......................6

2.3. Data Collection..........................................7

2.4. Method of Data Analysis..................................7

ii

3. SCOPE AND LIMITATION OF THE STUDY...........................8

4. PLAN AND PROPOSED WORKING BUDGET............................8

5. REFERENCES.................................................10

6. ANNEXES....................................................12

LIST OF ABBREVIATIONS

BoANRD----------------- ---Bureau of Agriculture and Natural

Resources Development

BoARD ----------------------Bureau of Agriculture and Rural

Development

CSA---------------------------Central Statistical Agency

ESAP--------------------------Ethiopian Society of Animal

Production

FAO------------------------- Food and Agricultural Organization

iii

GAWOARD ---------------Ganta Afeshum wereda office of Agriculture

and Rural Development

ILRI--------------------------- International Livestock Research

Institute

MoTI-------------------- ----Ministry of Trade and Industry

SPSS--------------------------Statistical Package for Social

Sciences

iv

1. BACK GROUND OF THE STUDY

1.1. Introduction

In Ethiopia there are approximately 35.4 million cattle, 25.5

million sheep, 18.9 million goats, and 1.1 million camels in the

country. The livestock sector in Ethiopia contributes 12 and 33%

of the total and Agricultural Gross Domestic Product (GDP),

respectively, and provides livelihood for 65% of the population

(Belachew et al., 2003). The sector also accounts for 12-15% of

total export earnings, the second in order of importance in 1998.

Of the total household cash income from crop and livestock,

livestock account for 37-87% in different parts of the country,

and the higher the cash income the higher is the share of

livestock, indicating that increased cash income comes primarily

from livestock (FAO, 2001).

In the history of world leather market, the Ethiopian hides and

skins which are byproducts of these locally adapted animals, have

proved special suitability for the production of different

leather products; and so that they have won international

reputation for their unique natural substances of fineness,

cleanness, compactness of texture, thickness, flexibility and

strength (Darge, 1995).

v

Ethiopia's leather industry is at the forefront of the leather

sector development of the Eastern and Southern African region.

The industry has reached an advanced stage of development and a

reputation for excellence in the international market. The export

performance of the sector showed very encouraging trends during

2005-2007. The major export contributor of the manufacturing

sector in Ethiopia is the leather and footwear industries, which

contributed 70% of the export earnings for the year 2005-2007

(MoTI, 2008).

There are 20 tanneries in operation, which have created direct

job opportunities for 3975 people. Of the 20 tanneries, 9 are

100% export oriented in semi-processed skins, 14 have facilities

for the treatment of effluents. A further four tanneries are

expected to start operations in the near future and licenses have

been issued for the establishment of an additional 18 tanneries.

The processing capacity of the tanneries far exceeds the supply

of hides and skins, particularly raw sheep and goatskins. This

has created an unhealthy competition among tanners; with the

results that skin Prices are high. This raises the price of

leather to the local manufactures of leather products and affects

the capacity to compete in the export market (MoTI, 2004).

In Ethiopia hides and skins contribute much to the export

earnings from the livestock sector. In addition, it has a large

vi

contribution to the leather industry in the country. Ethiopia has

been exporting hides and skins in the past100 years. The country

has big potential to develop the subsector. In 2002 hides and

skins represent major source of foreign exchange earnings for the

country accounting for 14-16% of the total export revenue Girma

(2003).

Current knowledge on livestock market structure, performance and

prices is poor and inadequate for designing policies and

institutions to overcome perceived problems in the domestic and

export marketing systems (Ayele et al., 2003). Livestock and

livestock products are the major foreign exchange earners, only

second to coffee, with hides and skins contributing the most. The

share of live animal exports in total livestock and livestock

products export earnings have declined in recent years (Zewdu,

1995).

The major constraints of hides and skins marketing faced were

reflections of the economic policy which were characterized by

socialist oriented development and centralized planning system:

nationalization of major industries, financial institutions,

allocation of quotas, fixing prices, legal monopoly of

corporations, restriction of trade movement and the like (Girma,

2003). Apart from the problems that stemmed from the system, the

main constraints in the marketing of hides and skins included an

inadequate network of primary buyers, lack of facilities for

vii

slaughtering, preservation, storage and transportation, ‘lack of

incentives for improvement’ and limited effectiveness of

government extension service (Ahmed, 2000).

In Tigray, there is a broad consensus that investment in

livestock is central both as a pathway out of poverty for many

smallholder households, and food security strategies. The

population of livestock of Tigray region, according to 1997

census projection, is cattle 3.04 million, sheep 935,337, goats

1.46 million, equine 318,932,camel 10,417 and chickens 3.76

million (Boa NRD, 2000).

Tigray is one of the largest suppliers of hides and skins

preceded by Oromiya and Amhara regions. The amount of hides and

skins channeled to the central market is increasing from year to

year. All hides and skins collected and preserved by the

wholesalers are graded based on the quality defects identified

before being transported to different tanneries. Of the total

hides and skins offered to the central market so far, 46%, 35%,

13%, 6% and 0.2% are graded as first, second, third, fourth and

rejected, respectively (Boa NRD, 2004). Livestock in the region

is an essential component of overall farming system serving as a

source of draught power, milk, meat, and manure, and cash income

for the farm family. Hides and skins as a livestock products are

one of the different animal products and by products offered to

the central as well as foreign market to earn foreign currency

(Adugna, 2004).

viii

Most local tanners found in western, central and eastern zones

use goat skin but those who are in southern zone use cattle hide.

Their number before ten years was around 1380. To alleviate the

development constraints mentioned and to enhance the livestock

and livestock products marketing development so that to benefit

from the resource, the region has planned and implemented

different agricultural development policies and strategies

(BoANRD, 2004).

Ectoparasites have negative impact on the quality of skin and

hide. Also traditionally farmers treat their animals when they

get sick or injured. Of the different traditional methods of

treating animal practiced by the farmers branding is the common

and this has a significant negative effect on the quality of the

hides or skins produced from branded animal. Hides and skins are

meat by-products and there is still little consideration given to

the care required for the collection and processing of the hides

and skins in to high quality leather (Adugna, 2004).

1.2. Statement of the Problem

Hides and skins are important economic component of Tigray, which

contributes significant amount to the regional economy. In the

region there are around 120 wholesalers and about 350 local

collectors working in hides and skins trading. Hides and skins

ix

supplied to the market in 2006/07 from the region is 85,960

cattle hides, 408,741 sheep skins, 871,786 goat skins of which

25% is sold to the regional wholesalers and 75% is supplied

directly to tanneries from wholesalers. The hides and skins grade

according to the regional experts is mostly from first to third,

measured by taking samples Berhe (2009). But, the current

situation of Ganta Afeshum wereda is not known since there is no

research done in the wereda. Out of the five zones of Tigray,

eastern zone have highest share of sale (92% and 86% of hides and

skins) respectively. While western Tigray utilize for household

consumption 37% and 61% of hides and skins respectively, this is

largest proportion in the region (CSA, 2008). But, particularly

the percentage contribution of Ganta Afeshum wereda is not known.

In Ganta Afeshum wereda, Hides and skins are important livestock

products providing income for the poor people living in the rural

areas. They are supplied to domestic and foreign markets. Since

they have significant socioeconomic importance, much effort and

research is needed to improve the quality and quantity as well as

the marketing system of skin and hide in the wereda. There is no

research done which revealed the quality and market of skin and

hide in Ganta Afeshum wereda.

1.3. Study Objectives

x

1.3.1. General objective

To assess and analyze the marketing system of skin and hide

in Ganta Afeshum wereda.

1.3.2. Specific objectives

To analyze constraints and opportunities of the marketing

chain of hides and skins in the study area.

To identify market channels of raw hides and skins

To analyze the strengths and weaknesses of the marketing

system of raw hides and skins

To estimate the potential demand of hides and skins in the

study area and nearby markets

To assess the handling and awareness of the farmers, local

traders, and butchers.

1.4. Research Questions and Hypotheses

1.4.1. Research Questions

Who are the main target groups responsible for lowering and

improving the value of skin and hide?

What are the hides and skins market system performed in the

study area?

What are the constraints and opportunities of the market?

xi

Where are the potential demand areas of hides and skins of

the study site?

1.4.2. Research hypotheses

The main problem for low quality and price of the skin and

hide is delay of the farmers on sending it to the local

sellers and sheba leather factory, since it may spoil if not

treated soon.

Inadequate veterinary service may bring low quality of skin

and hide.

The weakness of market could be due to low awareness

creation about handling and economic value of skin and hide.

xii

2. DATA SOURCES AND RESEARCH METHODOLOGY

2.1. Description of the Study Area

Figure 1. Map of the study area

(http://www.tigraionline.com/tigrayGIF.gif)

The study will be conducted in Ganta-Afeshum wereda of eastern

zone of Tigray. Ganta Afeshum is located in Eastern zone of

Tigray with 115 km North of Mekelle, regional capital of Tigray.

It is bordered by wereda of Gulomekeda on the North, Ahferom on

the west, Hawzien on the South and Saesie Tsaedaemba on the

eastern. It has a mean annual rainfall of 400-600 mm, a

temperature of 6-21.8oc and altitude of 2000-3000 meters above

sea level (GAWOARD, 2012). The wereda has a total population of

xiii

Ganta Afeshum

88,644, of which 42,096 are men and 46,548 are women with a total

of 19,301 households (CSA, 2008).

2.2. Sampling Techniques and Sample Size

Ganta Afeshum wereda has about 19 kebeles from these about five

sample villages will be selected based on their accessibility and

potentiality in skin and hide production and 50 respondents (10

peoples from each kebelle) as well as 5 local collectors and 3

butcheries will be selected for questionnaire, which will be

taken from Ganta Afeshum wereda, office of agriculture and rural

development.

2.3. Data Collection

Primary data will be obtained by questionnaire and direct

interview with the farmers, local collectors, and butcheries. And

secondary data will be taken from Ganta Afeshum wereda, office of

agriculture and rural development.

The data will be collected to get information of marketing

aspects of raw hides and skins; focused on access to market and

market price information, livestock ownership, access to

veterinary service and other leather expert’s service, income

from farm and non-farm activities.

Questionnaire survey will be conducted and prepared to collect

information of the channel, difference of quality and price

xiv

between farm-gate and terminal market, and analyze price margin

based on the information of farmers, local collectors, and

wholesalers of the wereda, Regional wholesaler and Sheba tannery.

2.4. Method of Data Analysis

Both qualitative and quantitative data will be used where

qualitative will be used to interview the respondents and obtain

the relevant answer of the question. And quantitative data will

be used to summarize the percentages obtained and prepare graph

from the data collected as well as the collected quantitative

data will be analyzed using descriptive statistics & where

appropriate comparative parameters using excel & SPSS version 18

soft ware.

3. SCOPE AND LIMITATION OF THE STUDY

The study will be for the first time in Ganta Afeshum wereda, so

there is no documented and published data regarding to the study.

This study will focus only on small selected Tabias; it may not

cover the whole wereda. The study will also be focused to a

xv

single wereda, for the obvious reason of time and financial

resource constraints.

4. PLAN AND PROPOSED WORKING BUDGET

i). Work Plan

No. Activitie

s

Months

Janua

ry

Februa

ry

Marc

h

Apri

l

May June July Augu

st 1 Questionn

aire

format

preparati

on2 Sample

identific

ation3 Training

and

protestin

g4 Data

collectio

n5 Data

xvi

entry 6 Data

analysis 7 Report

write up 8 First

draft

submissio

n

This study will be conducted within 8 months starting from

January to August, 2015, so to complete the research the

following budgets and schedule of activities are proposed.

i).Working budget

No. Descripti

on

Unit Quant

ity

Numbe

r of

days

Unit

price

Total

price

1 Stationar

y

Numbe

r

3000

2 Data

collectio

n bag

Numbe

r

2 500 1000

3 Transport

ation

cost

Hours Days 60 50 3000

4 Miscellan 5000

xvii

eous 5 Contingen

cy budget

(20%)

3000

Total 15000

5. REFERENCES

Adugna Abreha (2004). Summary Report on Hides and skins Quality

Improvement and

xviii

Marketing Development Efforts and Their Achievements in

Tigray Region,

Unpublished. Mekelle, Tigray.

Ahmed Mohammed (2000). Development Potential and Constraints of

Hides and Skins

Marketing in Ethiopia. The opportunities and

challenges of enhancing goat

Production in East Africa. 127-138.

Ayele Solomon, Assegid Workalemahu, Jabbar M.A., Ahmed M.M. and

Belachew Hurissa

(2003). Livestock marketing in Ethiopia: A review

of structure, performance and

Development initiatives. Socio-economic and Policy

Research Working Paper 52. International Livestock Research

Institute (ILRI), Nairobi, Kenya. 35 pp.

http://www.ilri.org/infoserv/webpub/fulldocs/

Belachew Hurrisa and Jemberu Eshetu (2003). Challenges and

Opportunities of Livestock

Marketing in Ethiopia: In Opportunities and

Challenges of Livestock Marketing

in Ethiopia. Yilma Jobre and Getachew Gebru (Eds).

Proc. of the 10th Annual

conference of the Ethiopian Society of Animal

Production (ESAP) held in Addis

Ababa, Ethiopia, August 22-24, 2002. ESAP, Addis

Ababa. 407pp.

xix

Berhe Arkebe Negusse (2009). Assessment of hides and skins

marketing in Tigray region: the

case of Atsbi wemberta wereda, eastern Tigray, a Thesis

Submitted to School of Graduate Studies of Addis Ababa

University, in Partial Fulfillment for the Degree of

Master of Arts in Regional and Local Development Studies,

Addis Ababa university school of graduate studies college

of development studies institute of regional and local

development studies, Addis Ababa.

BoANRD. 2000. Annual report of the bureau of agriculture and

natural resources development,

Mekelle, Tigray.

BoARD, 2004. Assessment report on hides and skins performance of

the bureau of agriculture

and rural development, Mekelle, Tigrai.

CSA (2008). Report on Livestock and Livestock Characteristics:

Agricultural Sample Survey

2007/08. Statistical Bulletin 417, Volume II, March

2008. Addis Ababa.

Darge Alemu (1995). The Feature of the Ethiopian Hides, Skins,

Leather and Leather Products

Development. General Report. Addis Ababa.

FAO, 2001. World statistical compendium for raw hides and skins

leather and leather footwear

for the years 1982-2000. Rome, Italy.

xx

GAWOARD (2012). Annual report of Ganta Afeshum wereda office of

Agriculture and rural

development, unpublished. Ganta Afeshum, Tigray.

Girma Mekonnen (2003). Opportunities and Challenges of Hides and

skins Trade in Ethiopia. In

Opportunities and Challenges of Livestock Marketing

in Ethiopia. Yilma Jobre and

Getachew Gebru (Eds). Proc. of the 10th Annual

conference of the Ethiopian Society

of Animal Production (ESAP) held in Addis Ababa,

Ethiopia, August 22-24, 2002.

ESAP, Addis Ababa. 407pp.

Ministry of trade and industry (MoTI, 2008). Export of

agricultural products of Ethiopia:

Documentation center.

Zewdu Kebede (1995). Hides and skins in Ethiopia. In: Development

opportunities in livestock

Agriculture. Proceedings of the second annual

conference of Ethiopian Society of

Animal Production (ESAP), Addis Ababa, Ethiopia, 26–

27 May 1993. ESAP, Addis

Ababa, Ethiopia. pp. 6–14.

xxi

6. ANNEXES

Annex 1. Quality and Grade of skin and hide

Grade 1 --------No visible defects which are likely to depreciate

the

Skin, appearing beyond 2.5cm from the

edges and 90-100% usable.

Grade 2-------- Defects assessed to a total of 1-3 defect units

and 80-89% usable

Grade 3-------- Defects assessed to a total of 4-8 defect units

and 70-79% usable

Grade 4-------- Defects assessed to a total more than 8 defect

units, the unusable area

Being at the most equal to 50-69% of the

total area.

xxii

Rejects--------Skins of which more than 50% of the area is

unusable

Source: BoARD, 2007. Adapted from the National Standards;

(Regulation No

12/1990 and ES 1201-2005).

Annex 2. Farmers and Butchers Survey Interview Schedule

a. Profile of the interviewee

Name of the farmer------------------

Gender --------------------------------

Age ------------------------------------

Region: -------------------------------

Zone: ----------------------------------

Wereda: -----------------------------

Name of Kebelle --------------------

Kushet or Gott --------------------

b. Level of education

Illiterate-------

Preparatory----------------------

Elementary------ College

diploma----------------------

Junior-------------- Degree

---------------------------

Secondary--------- If above,

specify---------------------

xxiii

c. Livestock ownership

Cows------ Sheep---------

Oxen--------- Goat----------

Annex 3. Questionnaire format for farmers

1. Did you slaughter any animal in 2014?

a) Yes b) No

If yes, do you use the skin for home or sell? ______________

2. Did you sell Hides or Skins to market in 2014?

a) Yes b) no

If yes, where did you sell your Hides or Skins?

a) Village market

b) Wereda market

c) Other (specify)

__________________________________________________

3. How many skin and hide did you sell in 2014?

________________________

4. And at what price did you sell? If for,

a) Local tanners

b) Collector

c) Wholesaler d) other (specify)

5. To whom did you sell your Skins?

a) Local tanners

b) Collector

c) Wholesaler d) other (specify)

6. When did you sell your Hides and Skins to the market in 2014?

a) Fresh

xxiv

b) Dried

c) Salted

7. What is the distance to?

a) Local tanners

b) Collector

c) Wholesaler

8. Do you have updated price information of Hides and Skins in

the market?

a) Yes b) No

9. What is the average selling price of your hides?

10. What is the average selling price of your skin?

11. What are the criteria for selling your skin and hide?

a) Weight b) quality

12. What are the main problems in skin and hide market? And what

will be the solutions?

Annex 4. Questionnaire format for Ganta Afeshum Office of Trade

and Industry

Name of officer____________________________________

Position ________________________________

1. Does it have a legal criterion to enter in Hides & Skins

trading? a. Yes b. No

2. If yes, what are the criteria please specify?

a) Rural collectors -------------

b) Wholesalers --------------------

xxv

3. Are there traders returned their license in 1999 E.C? a) Yes

b) No

If yes, why?

4. Who is going to pay tax in the market? A) Trader b) producer

c) Other -------------

5. How is the tax payment system of the traders?

6. What are the major problems of Hides & Skins marketing

identified in the wereda?

Annex 5. Questionnaire format for Ganta Afeshum Office of

agriculture and rural development

1) Does your organization certify Hides & Skins Traders? a) Yes

b) No

2) What service did you provide to Hides & Skins markets in the

wereda?

3) What extension service did you provide to farmers, service

givers and traders? Regarding hides and skins?

4) How much hides supplied to the market in 2014?

a) Local market __ b) Wereda market ___ c) sheba leather

factory____

5) What are the major problems of Hides & Skins marketing

identified in the wereda?

6) Where are the potential areas usually supplying Hides & Skins

to this market?

7) Are there local/traditional tanners in the wereda? a) Yes b)

No

xxvi

If yes, how many?

8) What are the major causes of quality defects of hides and

skins in the werda?

9) Are there any abattoirs in the wereda? a) Yes b) No

If yes, how many? And how is their standard?

xxvii