Opportunities for Asset Diversification in a Livestock System: The Case of Pastoral Boran of Southern Ethiopia

Internal population pressure can lead to a need for economic diversification. The Borana pastoral system of southern Ethiopia, traditionally based on cattle husbandry for wealth storage and milk production, has apparently functioned well for many years to mitigate risks inherent to semiarid areas (Pratt 1987; Helland 1997). Recent increases in human and livestock populations, decreases in availability of grazing lands, and a decline in adherence to social mores, however, have eroded the effectiveness of traditional means to stem risks of livestock asset losses during drought (Coppock 1994; Helland 1997). It was speculated that because Boran households appear to be losing an increasing number of cattle in dry years, divesting some portion of their cattle wealth into nontraditional options (i.e. simple savings accounts in banks) could benefit wealth accumulation, risk mitigation, food security. and environmental protection. The basic concept is that a properly balanced investment portfolio should minimize risk for an expected level of net return (Markowitz 1952: Hardaker et al. 1997). Our primary objectives were to determine (i) production system trends, (ii) economic losses attributable to wasteful cattle mortality, (iii) the degree to which such losses are influenced by heavy stocking rates and drought. and (iv) whether provision of alternative (nonlivestock) savings options could benefit the economic portfolio of households