Tough times on the horizon for Botswana’s primary cattle producer

Significantly, exports of live cattle with the intention to slaughter will come to an end by 31 December 2023. Beefmaster Group, a specialist beef producer with business interests in southern Africa, has raised a concern, suggesting that access to competitive markets will close.

“The primary producer in Botswana is one of the most reliant stakeholders in the country’s cattle industry,” said supply chain executive at Beefmaster Group, Roelie van Reenen. “These individuals will be severely impacted by the changes. They are likely only to feel the impact on their back pockets in the first quarter of 2024 because their market will reduce significantly.”

Stagnated

According to research carried out by the World Bank, while Botswana and its neighbouring countries have come a long way in developing competitive livestock value chains, productivity has stagnated in the past years due to repeated climate shocks, animal disease outbreaks, and weakened health systems.

In addition, says the report, the business environment in the area remains constrained with limited private capital inflows into much-needed critical segments of the value chain due to a prevailing high degree of direct government involvement and state-owned institutional architecture, while the participation of smallholder primary producers remains limited.

“Accordingly, the latest news will also limit private capital flow to the area from willing international buyers, given that the movement of animals across borders will be halted,” says van Reenen, noting that other factors may also mean further hardship for primary producers, including changing weather events, such as El Niño, which is expected to bring prolonged periods of drought and drier conditions to farming areas across southern Africa in 2023/24.

Catastrophic events

Van Reenen believes this will also increase catastrophic events like wildfires. “Devastating fires have destroyed thousands of hectares of grazing land in the region,” he says. “This is also going to impact the primary producer in the future.

“As the likelihood of fire increases, primary producers will need to understand that the lack of grazing land is also going to be a problem, given that they will need to hold onto the animals originally intended for slaughter for a longer period.” While limiting the export of cattle has been a measure of the Botswana Government in the past, farmers were allowed to continue exporting at least some terminal animals. But this will end in December 2023.

Lightweight young calves

“The traditional Botswana cattle production is aligned to a European Union non-enhanced system, which cannot utilise lightweight young calves in feeding programmes and was always dependent on a ‘long weaner’ production system of 12- to 18-month-old cattle.

“Of late, primary producers have been accustomed to selling a young 7-month-old animal for export, meaning they were able to find a market for their product quickly. Now they will need to wait longer until the weaner has acquired enough weight to find a market.”

South Africa has over 400 abattoirs for processing livestock. This adds to the competitiveness of the sector, allowing the primary producer to get paid a competitive price for a product. South Africa is a free market as there is no monopoly. By contrast, there are a limited number of abattoirs in Botswana, with the Botswana Meat Commission (BMC) in control for the regulation of the livestock and meat sector in the country.

No track record

A new set of regulations, under the Meat Industry Regulatory Authority Bill (MIRA) has been touted to protect the interests of both farmers and consumers, whilst attracting investment to the meat industry, as well as promote a competitive industry.

“We have spoken to many primary producers in the area, and they are concerned that the regulation will have the opposite effect and hamper what is meant to be a free market economy,” says van Reenen, adding that regulation very seldom creates an environment in which competitive pricing structures can take place. “There is no track record to prove that it is a viable method,” he notes. “Removing a market removes competition, which may in effect create a monopoly that can set livestock prices.”

No data on national herd size

According to van Reenen, another issue that needs to be addressed is that there is no data being available on the size of the national herd. “This is because primary producers only register an animal once it is earmarked to be sold,” he observes.

“Cattle that are not to be sold are not registered on the Botswana Animal Information and Traceability System (BAITS). “In this scenario, the primary producer will be facing tough challenges over a longer time span in the not-too-distant future. “As an industry, we need to take the well-being of the primary producer to heart because if we don’t have an economically functional primary producer, we won’t have a supply line, and the industry will collapse.”