Benefits and cost of compliance of compliance of sanitary regulations in livestock markets: the case of Rift valley Fever in the Somali Region of Ethiopia

A recent outbreak of Rift Valley fever in East Africa has led to an export ban by Saudi Arabia and other Gulf countries on livestock products from Ethiopia. An evaluation of the costs of the ban on Ethiopia’s main exporting region (Somali) and their distribution among different types of households, producers and traders is conducted using a standard Computable General Equilibrium (CGE) model. Investment strategies to regain access to the Gulf market and reduce the probability of future bans are also evaluated. Results show that Somali Region’s GDP is reduced by 25% as a consequence of the ban. In addition, poor and better off producers experience total losses in value added of around 50% of their respective levels in a normal year. The evaluation of an animal health programme in the Somali Region to minimise the impact of future bans shows that its implementation is feasible and justifies further analysis focusing in the main factors driving the results. However, results of the analysis of different alternatives to charge producers for the equivalent amount of the cost of the programme show that distortions introduced by taxes and increased transaction costs affect the viability of the programme. Among these alternatives, increasing taxes on livestock sales offers the best prospect as the way to implement the health certification plan in the Somali Region given that it has pro-poor redistribution effects.