Ethiopia's House of People's Representatives passed the livestock trading law on Tuesday, January 21, 2014, Fortune reported.

The law, which was unanimously approved by the Parliament during its 14th regular session, introduces auctions market, driving out middlemen from the livestock trade.

The new proclamation establishes a two tier livestock market, primary and secondary, and puts a restriction on any transaction of livestock outside of these markets.

“The need for scaling up the quality and supply of the livestock market has been acutely felt,” Zewdu Kebede, chairperson of the House Agriculture, Pastoralists & Trade Affairs Standing Committee, told members of Parliament on Tuesday. “We, thus, need a more modern and comprehensive bill, in order to transform the backward system of the sub-sector and to formulate the operators’ rights and responsibilities in the process.”

Despite having the largest livestock population in the continent, livestock’s contribution to Ethiopia's economy is small. While coffee fetched the highest revenue in 2012/13, livestock ranked sixth, registering a decline of about US$40 million less compared to the preceding year, according to Fortune.

Prevalence of an informal cattle market, the unnecessary involvement of middlemen, information asymmetry and illegal cross border trade are major hurdles hampering the country form fully benefit from its livestock resource, according to Dechassa Huressa, a livestock expert Fortune talked to.

Source: Fortune