The livestock sector plays an important role for livelihoods and economic security of farmers and rural communities in Sub-Saharan Africa. The sector contributes about 25 percent of total agricultural GDP and about 11 percent of national GDP of Ethiopia. However, much has not been done to improve performance of the sector, especially indigenous genetic resources that are at risk. The paper develops a Policy Analysis Matrix to examine the profitability and competitiveness of indigenous Horo cattle production in the Western Showa in Ethiopia. We employ multi-stage probability sampling techniques in selecting 150 farmers for interview. We then employ partial sensitivity analyses with various scenarios to assess the impacts of each policy strategy. The results show that both private and social profits from indigenous cattle production are positive; implying that indigenous Horo cattle production is profitable and competitive for livestock keepers in particular for the country at large. The domestic resource cost coefficient, private cost ratio, effective protection coefficient and profitability coefficient values also indicate a comparative advantage of indigenous Horo cattle production in the country. Policy recommendations for improved conservation, management and sustainable use of indigenous animal genetic resources are provided.


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