Presentation by Amos Omore to Conference on Climate Change Adaptation Strategies, Capacity Building and Agricultural Innovations to Improve Livelihoods in Eastern and Central Africa: Post-Copenhagen, Addis Ababa, Ethiopia, 7 – 9 June 2010

1. Commercialised supply of training & certification to improve quality and safety of animal products and exploit market demand Conference on Climate Change Adaptation Strategies, Capacity Building and Agricultural Innovations to Improve Livelihoods in Eastern and Central Africa: Post-Copenhagen (UNFCCC/COP15), Addis Ababa, Ethiopia, 7 – 9 June 2010 Amos Omore, ILRI, Nairobi, Kenya

8. Commercialised supply of training and certification using a BDS Approach Traders Training Service Providers (BDS) Certification Authority Certification/licensing Training & certificates of participation in training Accreditation / monitoring Reporting Cess fee Training guides Training fees

17. Thank you Authors: Simeon Kaitibie, Amos Omore, Karl Rich, Beatrice Salasya, Nicholas Hooton, Daniel Mwero and Patti Kristjanson www.ilri.org and http//:impact.cgiar.org

18. Estimates of welfare benefits Annual change in benefits (with 2005 as year when benefits start accruing) Scenario Economy-wide (Million US $) Nairobi area gross benefits (Million US $) Benefits to consumers 8.01 1.46 Benefits to producers 16.04 2.98 Benefits to SSMVs 4.32 0.75 Benefits to input suppliers 5.09 0.90 Total benefits 33.46 6.09 Less annual SDP expenditure (1997-2004) 0.63 Less annual costs of training and licensing by SSMVs (2005-2039) 0.58 Less annual cess fees (2005-2039) and municipal, council costs 12.72 Annual Benefits minus costs (2005-2039) 19.53 Net Present Value (@5.00%) (to 2039) 230

22. Appendix 3: Values for estimating welfare changes attributed to new dairy policy Variable description Value (Nairobi area) Value (Kenya-wide) Source of information Raw milk production 493 million liters 4016 million litres SDP, updated (SDP Policy Brief #10, September 2006) Retail price Ksh 21.70/liter Ksh 21.57/litre Study survey (averaged over all locations and SSMV sales Farm price Ksh 15.97/liter Ksh 15.58/litre Study survey (averaged over all locations and SSMV purchases Non-market input cost per unit of output Ksh 6.90/liter Ksh 7.06/litre Estimated using data from Salasya et al. (2006) and updated SDP milk production data Elasticity of milk demand at retail -0.97 -0.97 Salasya et al. (2006) Elasticity of milk supply at farm 0.35 0.35 Salasya et al. (2006) Elasticity of marketing services supply 2 2 Freebairn et al. (1982) Cost reduction due to changes in transaction costs and elimination of NTB Ksh 0.80 KSh 0.54/litre Study survey, decrease in retail farm price margin (comparing before and after policy change)

23. Appendix 4: Counterfactual- NPV with/without SDP Based on NPV with SDP of $230M Time delay Real interest rate (%) NPV without SDP (US$ million) NPV (with SDP minus without SDP) (US$ million) Legalization occurs 10 years later 5 124.01 106.43 IRR(%) 108 Legalization occurs 20 years later 5 56.07 174.37 IRR(%) 62