AMBOHITSAHATAZA, 1 June 2010 (IRIN) - Far from the world's financial centres, isolated from sub-prime mortgages, collateralized debt obligations and collapsing investment banks, Madagascar is going through a financial crisis of its own, and stock prices are plummeting.

As in most of rural Africa, wealth is measured in livestock. Joseph Rabemamamtsoa, leader of Ambohitsahataza village in Amphany district in the southwest of the island, told IRIN that the value of his zebu - sturdy cattle with long horns and a fatty hump on their shoulders - had halved. "Normally, we could get up to 300,000 ariary [US$140] for a good animal; now we are lucky to get 150,000."

Not only has the value of individual animals dropped in the past few years, the average size of herds has also dwindled. "In a good period one rich family will have between 20 and 40 animals, now they have only 10," Rabemamamtsoa said. Poorer families - most of the roughly 1,700 villagers - now had none.

The Malagasy government's Early Warning System (SAP) noted that the average price of a zebu in southern Madagascar had dropped from A221,000 ($103) in March 2008 to A110,000 ($51) in March 2010, which was in line with the 50 percent devaluation experienced in Rabemamamtsoa's community.

Breaking the bank

In local terms this is a financial meltdown: people in the south of Madagascar depend on their zebu for more than just meat, milk and draught power to pull carts and plough the fields; their herd of zebu are their life's savings, insurance, their standing in the community. "It is what we value most," Rabemamamtsoa said.

Lundi Perole, a civil engineer and head of Hiara Hampandroso (Develop Together), a local NGO that helps communities build resilience in the harsh dry conditions of the region, said a large herd of zebu meant social prestige and importance.

He has helped build water harvesters with the help of UN World Food Programme (WFP) Food-for-Work projects, in which a community works on projects geared to restoring self-sufficiency in exchange for food aid.

On his desk there is a huge pile of envelopes with requests from communities. "Most are for water catchment basins for cattle," he said. "The decision of what to build is taken by the community. We are in the south, [where] water is the big problem. They prefer not having water to drink for themselves than having their zebu without water."

The importance that Malagasy attach to their zebu cannot be underestimated: "It is their life and their death," Perole commented. Cultural practice dictates that a deceased person's zebu be slaughtered and the skulls set to decorate the tomb - the more skulls on a tomb, the greater the wealth and status - although outsiders often consider the practice destructive.

A buyers market

Drought lay at the heart of this local recession, and the consecutive years of scant rain had pushed families beyond their ability to cope, Perole said.

By the end of April 2010 the government projected that a record 65 communes in the south would face hunger in the coming months - surpassing the 45 of the previous year – and some 866,000 Malagasy would probably need assistance by June 2010.

"Food prices are increasing beyond the purchasing power of the population, reducing their access to food," said Krystyna Bednarska, head of the WFP in Madagascar.

Official figures indicate a rising cost of living in southern Madagascar: the price of one kapoaka (a small tin can) of maize, the staple food, rose from A130 ($0.06) in July 2009 to A230 ($0.11) by February 2010 in some areas.

Alexandre Huynh, Emergency and Rehabilitation Coordinator at the UN Food and Agriculture Organization (FAO), said poor harvests meant families were forced to sell off assets - like their prized zebu - to make ends meet.

"Zebu provide a solution to purchase food during lean seasons and food shortages, but ... as the sale becomes critical to the family, and as numerous households sell their animals at the same time, prices [fall] extremely low," he said.

"When the crisis has passed, [people] try to repurchase animals, but at the normal, and higher, market price, which directly contributes to their increasing destitution and current heavy de-capitalization."

The loss of local wealth is keenly felt. Rabemamamtsoa said the zebu were being bought and trucked to cities, like Tulear on the southwest coast, "But even up to Antananarivo [the capital, in the north]."