Economic sustainability of livestock system in southern Ethiopia: Navigating ownership, market dynamics, and resilient strategies

Livestock systems play a central role in rural livelihoods, food security, and asset accumulation in Sub-Saharan Africa, yet empirical evidence on the joint determinants of livestock ownership, commercialization, and mortality, particularly across species and agro-ecological zones, remains limited. Existing studies often analyze these outcomes separately and fail to integrate economic theory and institutional dynamics adequately. This study addresses this gap by examining the economic sustainability of livestock systems in Southern Ethiopia using cross-sectional data from the 2018/19 Agricultural Household Survey, which covers 39,274 households. Grounded in household production and agricultural investment theory, the analysis employs Probit models to estimate the probability of livestock ownership and mortality incidence, and Tobit models to account for censored outcomes in livestock quantities owned, sold, and lost. The results reveal substantial spatial and species-specific heterogeneity. Cattle ownership is highest in South Omo and Konso, while poultry ownership is widely distributed across mixed-farming zones (regional average 52.1%). Landholding size and household labor are consistently positive and statistically significant determinants of livestock ownership and sales (p < 0.01), supporting asset-based investment theory. Access to extension services significantly reduces livestock mortality (p < 0.05), while participation in safety-net programs is associated with lower sales intensity, suggesting liquidity constraints among vulnerable households. Mortality incidence is significantly influenced by household size, use of hired labor, and disease-control variables across most species (p < 0.01). Model diagnostics confirm the appropriateness of Tobit specifications for censored livestock quantities, and robustness checks show stability across alternative specifications. The findings highlight that livestock sustainability is jointly shaped by resource endowments, institutional support, and market integration, with substantial heterogeneity across agro-climatic contexts. The study concludes that improving access to livestock health services, market data, and credit, while also building capacity among smallholder farmers, is essential to reducing mortality and boosting productivity. Incorporating gender-sensitive and climate-smart livestock management into the regional agricultural policy framework would enhance resilience and support sustainable rural livelihoods. These results have significant policy implications for Ethiopia's Livestock Master Plan (LMP) and Growth and Transformation Plan II (GTP II). Aligning these suggestions with Ethiopia's Livestock Master Plan and the Sustainable Development Goals (SDGs 1, 2, 5, 8, and 13) can enable the region to develop an inclusive, market-oriented, and resilient livestock economy that supports rural livelihoods while addressing ecological and climatic challenges. Strengthening these institutional linkages is essential for enhancing resilience and economic sustainability in mixed crop–livestock systems in Southern Ethiopia and similar developing-country contexts.