The livestock sector in Ethiopia contributes about 16.5% of the national Gross Domestic Product (GDP) and 35.6% of the agricultural GDP. It also contributes 15% of export earnings and 30% of agricultural employment, provides significant importance to the economies of Ethiopia and to local livelihood systems. However, in recent years official export has been declining while illegal export has been increasing. The Middle Eastern countries have been a traditional export market for Ethiopian animals but increasingly stringent health and quality control regulations restricted exports to these countries in recent years. Of the total household cash income from crop and livestock, livestock account the lion share in terms of revenue in different parts of the country, and the higher the cash income the higher is the share of livestock, indicating that increased cash income come primarily from livestock, particularly in the pastoral areas. However, current knowledge on livestock marketing, constraints, performance, opportunities, and prices is poor and inadequate for designing policies and institutions to overcome perceived problems in the marketing system. Knowledge on how marketing routes and systems could contribute to the spread of diseases and the implications of these for national and international trade in livestock is also highly inadequate to design any policy or institutional innovation to improve marketing for the benefit of the poor. Further, regaining the export market will require an understanding of the market potential in the importing countries including growth in demand, sanitary and phytosanitary (SPS) and other quality requirements, rules and regulations governing the market, Ethiopia’s competitiveness in the market in relation to alternative suppliers and ability of the domestic market to respond to the export market opportunities. Since the livelihood of smallholders is highly dependent on the cash income from livestock and livestock products, alleviating challenges to the export market and domestic trade and marketing structure, improving market information, and upgrading marketing infrastructures including health and sanitary conditions will increase the welfare of smallholder producers, urban consumers and improve the national balance of payments.
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