IFAD and the Delivery of Veterinary Services to the Rural Poor

Case Study: IFAD's Policy in India

The inception brief for the pipeline of projects for India, 1994, mentions various IFAD strategies in India, including:

support for the Government's poverty-alleviation strategy;
improving access to services for the rural poor within the existing framework;
environmental preservation alongside agricultural development;
participatory development and grass-roots institution building through NGOs;
fostering links between NGOs and line agencies;
small-scale niche initiatives concentrating on areas hitherto neglected;
flexibility in the selection of project areas, depending on local enthusiasm;
focus on vulnerable groups, especially Scheduled Tribes and women; and
direct-intervention rather than institutional projects.

It is also interesting to note that, according to the IFAD Country Portfolio Manager for India, livestock projects have so far tended to focus on dairy cattle, despite the undoubted importance of poultry and small ruminants in this country.

One final, but extremely important, aspect of IFAD's policy for the delivery of veterinary services is its support for privatization. This policy has a limited influence, in that it cannot be put into practice unless the national government involved is willing. Thus it has had little impact on projects in India, for example. However, more and more developing nations are undergoing structural adjustment programmes involving the privatization of many services in an attempt to reduce their budgets. IFAD aims to design policies that support veterinary privatization in these countries while lessening its impact on the poor by diversifying animal health services and devolving responsibility

In a discussion of IFAD's position on privatization, the following detailed policy recommendations are made:

privatization should be selective: for example, it should not include quality control or certain public goods;
it should include basic animal health training for paraveterinarians and animal technicians;
it should be competitive, avoiding under-pricing by subsidized government services;
the national government's role should be a supervisory one;
grass-roots and professional organizations and independent interest groups should be encouraged;
local factors should determine the appropriate private operator: for example, the self-help approach is preferable in many pastoral systems; and
poverty alleviation must still be the fundamental concern: the aim, to provide poor smallholders with effective and sustainable delivery of veterinary services.

The extent to which these policies have been implemented varies from country to country.

The Effects of Privatization

There have been widespread attempts, particularly since the 1980s, to privatize veterinary services in developing countries. This process has two aspects, which are logically separate. The introduction of cost recovery, by making livestock producers pay for veterinary services, was motivated simply by a lack of money. The transfer of livestock health services to private operators, on the other hand, is claimed to improve efficiency by increasing accountability.

Both aspects, however, have disadvantages as well as advantages. Private service providers lose economies of scale and are not always the best choice for the delivery of public goods, such as quality control, or those with significant externalities, like vaccination campaigns. More importantly, the introduction of cost recovery for services that were previously free puts needy groups, including the rural poor, at a disadvantage. In Kenya, for instance, smallholders own a large number of poor quality animals and therefore have trouble paying for veterinary services. According to Ilemobade (1997), their profit margin may be insufficient, particularly in the short term. Whether or not they benefit in the longer term is still open to question. In some cases, Holden et al. (1996) believe, it may still be appropriate for the state to intervene in their favour, with a social rather than an economic objective. This ambiguity has shaped IFAD's strategies in countries that are considering the privatization of animal health services.

One preliminary lesson that can be drawn from IFAD's experience is that privatization is difficult to avoid. In India, despite problems of accountability, it has proved politically impossible to privatize the subsidized veterinary services. However, a degree of de facto privatization is occurring, simply because government coverage cannot be sufficiently extensive. For example, many dairy cooperatives retain private veterinarians for the benefit of their members. Equally, the Southern Region Agricultural Development Project in Yemen, which aimed merely at strengthening the government veterinary services, in fact introduced a degree of cost recovery and established a basis for the development of private-sector activities. However, this phenomenon has its limits, especially where delivery to the rural poor is concerned. In Kenya, there has been some spontaneous development of urban and peri-urban private practices (Wamukoya et al., 1997), but this has not occurred in extensive districts, largely because travel costs are too high.

A second lesson is that a lack of government commitment to privatization can be fatal to development projects aiming to support it. The number of examples is depressingly large. In the Livestock Sector Development Project in Cameroon, the Government reneged on its commitment to give grants of drugs, equivalent in value to one year's salary, to public-sector veterinarians wishing to go into private practice. Not surprisingly, few did so. The incomplete enaction of legislation in Togo meant that private veterinarians were unable to perform vaccinations in most circumstances. In Kenya (and other countries), public animal health services have sometimes gone back on their promise to withdraw from operation wherever a private sector is developing or might be persuaded to develop.

For instance, the World Bank appraisal report for the Agriculture Productivity Improvement Project in Cambodia (in which privatization was a primary focus) lists as a potential risk the fact that: "Notwithstanding the difficulties that the government has in financing their [sic] provision, there is uncertainty as to the level of government commitment to the full privatization of the supply and delivery of veterinary services." Of particular concern was the possibility of the Government being unwilling to privatize vaccine production.

A similar scenario caused difficulties for the Xieng Khouang Agricultural Development Project in Laos. Private enterprises were authorized to retail vaccines in 1994, but had problems in maintaining appropriate storage conditions. Vaccines were kept at room temperature and sold when they were past their expiry dates, resulting in the authorization being withdrawn in 1996. The lack of an articulated commitment by the Government fully and permanently to transfer vaccine distribution to the private sector was a major project constraint. It was not possible to contract and support suppliers to provide VVWs with vaccine on a sustainable basis beyond the close of the project itself.

Finally, privatization was also an unsuccessful aim of the Western Savannah Project — Phase II in The Sudan, which intended to help private veterinarians to obtain loans and develop licensed practices. Despite lip service paid to the concept of privatization, there was entrenched opposition within the veterinary authority and no progress had been made by the time of the MTE. Regulations prohibiting the private use of trypanocidal drugs were especially limiting.

An additional point to be made is that, even where privatization has occurred, the results have been mixed. Despite the theory to the contrary, the private sector is not always efficient and accountable. The inadequacies of the private vaccine suppliers in the Xieng Khouang Agricultural Development Project in Laos have already been mentioned, as have the failures of the newly privatized dipping services in the Animal Health Services Rehabilitation Programme in Kenya, including instances in which dips were not of the correct strength and were of no benefit to the animals.

On the other hand, the institution of cost recovery seems sometimes to have helped the rural poor instead of harming them. In the Central African Republic, IFAD was instrumental in bringing about a high positive correlation between full cost recovery and the availability of veterinary drugs, particularly to the rural poor. Similarly, full cost recovery for poultry vaccination was introduced halfway through the Smallholder Livestock Development Project in Bangladesh, in 1997. According to the project-trained poultry workers, the main effect was to eliminate ‘non-serious demand’. The moral seems to be that the way in which privatization is introduced is as of much importance as the introduction itself.

The Projects | Conclusion