Supporting Somalia’s Livestock Industry with Labelled Cash Transfer
Somali communities are constantly affected by a series of shocks and stresses — including drought — that affect their main livelihood, livestock. Mercy Corps supports rural communities in Somalia recover from these shocks through restocking interventions of small ruminants (sheep and goats), frequently integrated into larger livelihood strengthening efforts.
Livestock is Somalia’s largest export subsector, accounting for 60% of the country’s GDP, and providing as much as $345 million in foreign currency earnings for the Somali economy in 2018. Somalia’s livestock sector remains the principal livelihood source for the majority of the population, providing food or income to more than 60% of urban and rural residents. Livestock (cattle, camel, sheep and goats) provide nutrient-dense food (mainly milk) to families. Livestock serves as the primary form of stored social and economic wealth (acting as as the household’s safety net for food security and other cash needs) and, the case of camel ownership, eases the transportation of goods. But most importantly, livestock and by-products generate income for the family — the delivery of milk and animals to processing centers as well as onward processing of meat and milk products creates rural and urban employment and business opportunities for thousands of women, men and youth.
Livestock restocking efforts often encompass larger scale purchases through tenders, which are commonly won by large-scale traders with the ability to source hundreds of animals from across a large geographic area. This means that most in-kind distribution efforts occur outside of local social and market systems. Another modality often used for restocking is vouchers. Those efforts, when well-managed, can be more integrated into local systems, but they are also time- and labor-intensive. Mercy Corps posited whether another modality may effectively achieve the goal of building livestock herds while strengthening local markets and animal health systems. The idea is to keep cash resources local and, ideally, work within traditional mechanisms to build or strengthen social networks — a critical element of household resilience.
With these opportunities and challenges in mind, Mercy Corps initiated the Labelled Cash Transfer for Stability (LCT-S) activity. The primary goal was to enable households to make important decisions about their own livelihoods. This pilot activity, initiated under the U.S. Agency for International Development (USAID)-funded Somalia Emergency and Early Market Recovery (SEAM) program, anticipated outcomes such as greater confidence when engaging in livestock markets. Additionally, among pastoralist and agropastoralist communities of Somalia, traditional forms of herd restocking include sourcing animals through extended family members, neighbors or owners of larger herds to identify the best breeding stock at an affordable price. The LCT-S activity was designed to build from or re-stimulate these traditional mechanisms to ensure longer-term impact. It also aimed to facilitate stronger relationships with animal health service providers, increase social capital, and foster greater participant ownership of purchased animals compared to other programs using in-kind or voucher-based distribution modalities. Through this pilot, which included a comparison between direct distribution and labelled cash transfers, Mercy Corps was able to understand the benefits and challenges of each modality, while also monitoring outcomes for added benefits to the local economy and social networks.
Labelled Cash Transfer for Stability
Labelled cash transfers is a category of cash transfer in which the funds are indicated or “labelled” for specific purposes but the conditions are not enforced. The "labelled" cash for restocking livestock involves key steps for safeguarding, adaptation, learning and support to participant households. SEAM provided cash (mobile money and cash), supplemental training and mentorship to participating households to purchase livestock and establish an ideal herd composition that would help achieve their livelihood goals. Core herd management strategies included prioritizing breeding stock (young adult females) for herd growth, selecting smaller animals to fatten for sale during periods of peak demand (i.e., sale during religious festivities, or for export and domestic markets) or some combination of the two.
Of the 2,004 families supported by SEAM's livestock program, 95 families across three regions and nine villages were selected to participate in the LCT-S program. The comparatively small number of households chosen was based on target criteria.. It also allowed for close monitoring and learning in areas such as how participants use the cash and whether families would self-select into a different livelihood. A scaled post-distribution assessment was carried out four to six weeks after animals were received in both in-kind and LCT-S pilot participant households.
Safia is a 37-year-old mother of nine lives who grows staple crops and keeps sheep. In 2020, she participated in the SEAM labelled cash transfer pilot. “I had four sheep when I joined the animal restocking project. Through [the SEAM cash transfer], I bought five goats — one he-goat and four females.”
“One month later, I reluctantly sold the he-goat due to family burdens and floods that affected my farm. Fortunately, in the second month, two of my goats gave birth to two kids. Within the same month, I decided to sell two of my goats and bought four sheep. I made this decision because I found out that sheep breed faster than goats in this area and are highly resistant to diseases. It was also a wise decision to sell the he-goat because my female goats could easily share my neighbor’s he-goat. Naturally, one he-goat can breed with many females since they all graze together. Currently, I have gained 22 sheep and goats plus kids and I am very happy with these numbers. I have enough milk for my children, and I plan to sell some of these shoats soon to buy a cow to get more milk.”
Working in collaboration with community leaders and community animal health workers (CAHWs), participant households received training on animal selection, preventive animal health treatments and appropriate improved husbandry practices. Households were encouraged to source goats through local resources; whether those be extended family, neighbors or the local livestock market.
Cash Transfers, Monitoring and Mentorship
Over a three-month period, participant agropastoralist households received $375 through cash or mobile money — the equivalent value of five animals per household — to be purchased within the three months. There were no requirements regarding on what and where to use the funds. During this period, CAHWs provided routine follow-up, primarily through phone calls and house visits, to offer advice and repeat messaging around selecting suitable animals. CAHWs inspected, dewormed and vaccinated animals within one to three days of being purchased. Curative treatments were given as needed based on the health of the animal. Mercy Corps subsidized CAHW services during the first three months to guarantee preventive and curative health treatments and to integrate data collection for monitoring purposes. By facilitating consistent communication between participant households and CAHWs, Mercy Corps hoped to strengthen relationships for sustained animal health services in the future. CAHWs were also able to lead monitoring activities — including integration of livestock inspection with data-collection of household use of cash resources.
Outcomes and Observations
Through quantitative and qualitative analysis, including follow-up discussions with pilot stakeholders, Mercy Corps found that:
- Goats distributed directly by Mercy Corps as well as those purchased by participant households were generally of equal quality in terms of health, age and size. Agropastoral households in the riparian districts of Baidoa and Balcad easily purchased quality livestock from local markets.
- Households appreciated the freedom to purchase a mixture of animals to include lactating and young ones, based on their needs and context. Households in the Jowhar District, for instance, selected only sheep, which cost less, resist disease, and reproduce faster. Participants kept some of the cash to cover future animal health needs, water containers and other household expenses.
- LCT-S participants purchased 3% more livestock overall for the same value as direct distribution. Any remaining cash was saved by the families for future use.
- LCT-S households overall purchased more pregnant females, leading to a faster expansion of household herds and greater satisfaction in seeing offspring within several months of acquiring the animal.
- CAHWs provided consistent follow-up messages, post-purchase inspections and health treatments. It was an effective way to strengthen producer-CAHW relationships and produced a much stronger relationship than under the direct distribution modality. This is especially important when working with women livestock producers who may not have the confidence, knowledge or networks necessary to access animal health services.
- Mercy Corps found great variation in participant satisfaction between livelihood zones. Limited access to physical markets selling quality breeding stock was a consistent challenge for pastoralist households. It was later realized that during "labelling" processes, purchasing livestock through physical markets was over-emphasized and households were deterred from sourcing through more traditional avenues.
Based on results from the initial SEAM LCT-S activity, Mercy Corps concludes:
- Labelled cash transfers have a high potential for increasing the number of livestock owned by poor pastoralist and agropastoralist women. To maximize benefits, local leadership and animal health systems must be fully integrated and lead the process, especially if women’s ownership or control of livestock is a priority. This allows women to build their social networks, and thus their ability to safely and confidently obtain animal health services; seek advice; access markets and, in some cases, access quality grazing areas.
- When designing labeled cash transfer, mapping the different sources and methods of acquiring breeding stock is critical. Through discussions with traditional or local leaders, including elders, it is important to develop messaging to "label" the cash transfer, clarifying that animals can be sourced through both informal or traditional systems (i.e., directly purchasing from larger producers or neighbors). It is also important to communicate that cash transfers can be used to "borrow" high-quality breeding animals (e.g., a household can purchase five female sheep and borrow a high-quality male for breeding).
- Considering the season during which transfers are being made is key. Animals of lower body condition can be purchased for a lower price and fattened or finished through improved feeding and animal health care. Pregnant animals or animals ready to breed may be more available in specific seasons. It is important to co-design several livelihood options with stakeholders and confirm that the timing of the cash transfer aligns with the availability of the preferred animal.
- The spread of livestock disease remains a concern. Labelled cash transfer activities that include support to and engagement by local animal health paraprofessionals can reduce the risk of spreading diseases while also strengthening relationships for future care.
- Leveraging local stakeholders can help build strong monitoring and safeguarding measures to ensure participants continue to feel confident about sourcing the right quality of animals. Forty-one percent of labelled cash transfer participants reported feeling pressured by vendors to purchase lower-quality livestock, which often resulted in multiple trips to the marketplace. Having CAHWs provide continuous support and advice regarding pricing and animal selection allowed participant households to be more confident in their purchase.
- Including a right level of budget for data collection (e.g., interviews with participants and stakeholder reflection workshops) throughout the process increases learning possibilities for improvements in the design of livestock transfer programs.
 Somalia inclusive of Somaliland
 For example, meat trade and retail sales in Hargeisa Somaliland are managed almost exclusively by women; one woman’s meat production and processing business employs a network of 10-20 additional women to process and distribute meat, bone and offals to households and businesses across the city.
 The SEAM program prioritized female-headed households, widows, divorced women and women with children under five.
 The LCT-S pilot was conducted in pastoralist and agropastoralist households. Discrepancies in messages conveyed during the ‘labelling’ process resulted in inconclusive findings. For purposes of this article, we present results from agropastoralist households.
 Pastoralist communities tend to buy shoats from their relatives when they are restocking or expanding the number of breeding stock.