Livestock Futures as a solution for cattle rustling in northern Kenya and the neighboring countries

 

Over the years cattle’s rustling has been rampant in the arid and semi arid areas of northern Kenya amongst the nomadic communities especially the cushites and the plain nilotes as well extending to neighboring countries i.e. Ethiopia, Uganda and Sudan. The well documented causes of the problem which revolves around some communities being armed “illegally” to fend off cattle rustlers from other pastoralist’s communities for political reasons, communities appetite to replenish lost stock after  harsh weather conditions during wet seasons from their fellow  nomadic communities and last but importantly the lack of proper education and low literacy levels by the pastoralist communities which the main rogue market players take advantage of in terms of buying their stolen livestock at a cheaper price and selling the same to the main urban centre’s at a premium price. This cyclical lifestyle does more harm for an economy that plans to achieve middle income status by 2030.

The political class and the regional leadership only resorts to short term measures such as disarmament of illegal firearms and left it to the N.g.o world to manage state affairs such provision of irrigation and lastly nature to dictate for instance   during dry seasons no rustling occurs due to en masse death of livestock as result of inadequate pasture as well as the famine experienced by nomads hence their inability to steal  and where as during the wet seasons, it’s time to strike for there is plenty within the borders to replace lost stock . During the inauguration ceremony for president Uhuru I saw his Ugandan counterpart Yoweri Museveni accuse the pokots from stealing animals to which the latter’s Kenyan legislators did not take lightly and yet we did not see any constructive solution to the problem at hand.

The long lasting panacea to this problem lies partly with our  regional government efforts to irrigate arid and semi arid areas , have more nomadic communities  enroll for formal education in order to avert this rather perennial problems however, the long lasting solution lies in financial sector deepening which calls for establishment of cattle’s futures market to take care of the harsh weather conditions and political cartels that exploit this nomadic society and as such cattle futures market will enable Consumers and producers of livestock to  manage  cattle price risk by purchasing and selling cattle futures. Cattle producers can employ to lock in a selling price for the cattle they produce while businesses that require cattle can utilize a long hedge to secure a purchase price for commodity they need.

Cattle futures can also be traded by speculators who assume the price risk those hedgers try to avoid in return for a chance to profit from favorable livestock price movement. Speculators when they believe that cattle prices will go up. Conversely, they will when they think that feeder cattle prices will fall. However, to achieve this other related products such livestock insurance must be a prerequisite for one to trade on the cattle futures market ,furthermore it’s high time the government relaxed rules on importation of tracking devices which can be installed on   cattle  horns or hooves and the same should form part of insurance policy so as to mitigate theft claims.