CHAPTER 2 LITERATURE REVIEW
2.5 Institutional arrangements governing the use of grazing resources in Eritrea In chapter one an argument was presented that despite the existence of well defined
property rights for groups of smallholder farmers at the village level, this is not sufficient to guarantee that grazing resources will be managed as well as if farmers each had exclusive- use rights over their grazing resources (e.g. as per optimal stocking rates shown in Figure 2.2). In particular, it was argued that if groups of farmers are unable to enforce their property rights (i.e. exclude outsiders) or if high costs of collective action limit the extent to which farmers co-operate and implement grazing management, then the outcome may be similar to that of open access. This section reviews the problem of common property grazing under open-access and why “the tragedy of the commons’’ may result. It is important with respect to understanding why few groups of smallholder farmers in Eritrea have adopted sound grazing management practices, and further, why they appear to pursue a survival or subsistence strategy rather than a commercial farming strategy.
2.5.1 “The tragedy of the commons’’
Gordon (1954) explained the common property problem under open access. The profit maximising rule is to stock cattle such that the value of the marginal product of cattle
(VMP) is equal to the cost of keeping an additional head of cattle (Px). At this point, returns (rents) are maximised. Assuming that the stockowner’s time preferences are consistent with those of society as a whole (i.e. a positive discount rate), then the optimal stocking rate will be less than or equal to the maximum long-tern stocking rate of the land, which is where the VMP is equal to zero. Thus, this stocking rate prevents land degradation (Gordon 1954).
However, if the grazing land is under open-access grazing, the land will be stocked such that the value of the average product (VAP) is equal to the cost of keeping an additional cow (Px). This equilibrium arises because under conditions of open-access stockowners only consider their own private costs and returns when deciding whether or not to make use of the commons. They do not consider the total costs and total returns of all the stockowners who use the land. In this situation there is no incentive for stockowners to
‘stint on the commons’ as rents would accrue to others - the free riders. The net result is that returns to cattle farming will be zero. What is more, it is possible that the stocking rate
Figure 2.2 Total, average and marginal value product curves (Gordon 1954).
VTP = Value of total products, VAP = Value of average products, VMP =Value of marginal products.
under conditions of open-access may exceed the maximum sustainable stocking rate of the land. Thus conditions of open-access may lead to land degradation, although this is not a necessary condition of open-access. Land degradation will tend to result in an increase in Px due to increased mortality rates, which will temper stocking rates on degraded rangelands if the input-output price ratio (Px/Py) remains unchanged (Gordon 1954).
Gordon’s (1954) theory of the tragedy of the commons is illustrated in Figure 2.2. In this graph, economic rents will be maximised at a stocking rate of 5 cattle (VMP = Px), however, under conditions of open-access the land will be stocked at a rate of 10 cattle (VAP = Px) and rents are zero. In this example, the maximum sustainable stocking rate is equal to 7 cattle, thus under conditions of open-access the land will be over-stocked and is likely to become degraded.
2.5.2 Open-access versus communal access
If a group of farmers collectively have exclusive use-rights to a grazing resource and the group can exclude outsiders from using their grazing, then the land is not under conditions of open-access but is under conditions of communal access. Clearly, the tragedy of the commons may be averted if the group of stockowners choose to cooperate and agree to stock the land at a level that is within the carrying capacity of the land, and preferably at the level where VMP = Px. High costs of collective action may limit the ability of a group of farmers to effectively cooperate, thus land farmed communally by a well defined group of farmers may suffer from the tragedy of the commons (World Resources 2005).
Collective action by groups of farmers is necessary not only for reducing stocking rates to optimal levels, but also for investing in improvements to the land (such as improving pastures, water points or green feeds). Thus it is important that the institutional arrangements that govern the use of communally farmed rangelands must be strong (i.e.
ability to exclude outsiders and to enforce rules amongst the group) and they must be conducive to effective collective action by the group if the tragedy of the commons is to be averted (World Resources 2005).
2.6 Household resources
The household resource characteristics are important factors affecting cattle productivity as they determine the quality of rangeland and herd management, the quantity of available household labour and the on- farm consumption requirements of the household.
2.6.1 Education
Increased levels of literacy and education help to reduce the economic costs of securing and using information. With literate and better-educated farmers, appropriate live stock and natural resource management may be better understood (UOA and MOA 1998)
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2.6.2 Household income
Low household liquidity may impact on cattle farming productivity because cash may be required for the hiring of labour to herd cattle, purchase supplementary feeds during dry periods, purchase new animals to improve herd genetics, invest in fixed improvements such as fencing, and to pay for veterinary services, amongst others. In general, cattle are a relatively liquid asset, however, during dry periods when cattle prices tend to be low, farmers may prefer not to liquidate part of their herd and rather support their herd using purchased supplementary feeds (UOA and MOA 1998).
Eritrean rural households’ main source of income is from livestock and crop cultivation, which is mainly rain fed. The income from livestock is from sales of live animals, milk and meat. MOA (2000) stated that the demand for livestock products increases resulting in an increase in the income of households. In the Central Highlands, the Arado cattle area, where human population is dense, milk, meat and live animal prices are higher on average by 20% than the Barka cattle area (FAO 1994). Households from Gash-Barka, the Central Highlands (Debub and Maekel regions) and Semienawi Keih Bahri regions get, on average, between 1138 and 2456 Nakfa per year from each of both the sale of live animals and crop yields. When assessed in detail, Gash-Barka, the Central Highlands and Semienawi Keih Bahri regions got 20%, 16%, and 17% of income obtained from the sale of live animals whereas 12%, 19% and 19% of income from crop yields respectively during 1993 and 1994 (UOA and MOA 1998).
2.6.3 Household structure
Cattle owners’ age and gender has a great influence on cattle farming development. In Eritrea, most livestock production operations are carried out by men. Eighty-five percent of Eritrean population live in rural areas and depend on livestock and crop farming activities. Generally, 50% of the 85% are considered as able bodied which are between 15 and 64 years old (FAO 1994). There is not any population difference between male and female. However, as evident in the three sampled-districts, Debubawi Anseba (in Gash- Barka region) 46%, Egelahatzin (in Debub region) 36% and Gahtelay (in Semienawi Keih Bahri region) five percent were female-headed households (UOA and MOA 1998). The large size of female-headed households has two implications with respect to Eritrean community. The first implication, which is cultural, is that it creates the dependency of females on their male relatives or share- herders or share-croppers in cattle herding and crop farming activities. During dry period, when a migration of livestock is needed for better access to forage and water supply, ladies usually face difficulty to look after the livestock out of their homesteads as they are more responsible to look after their children.
The other important implication is that family leading responsibility creates an exposure of favourable circumstances to ladies that they can gain a lot of experience in cattle and crop farming management to generate their income independently (UOA and MOA 1998).