There has been a lot of talk recently about reviving the beef sector. The donors are commissioning consultancy after consultancy. But most fail to look at the reality on the ground, instead harking back to a model of the past. As discussed in an earlier blog, I believe that this is missing the point. The past will not return, nor should it. The days of the heavily subsidised large scale commercial ranching sector are gone. Instead, there are multiple, smaller producers, with offtake coming often from multiple use herds in A1 and communal areas. In addition there are the new beef producers who link small and medium scale production on A2 farms with new value chains.
In the next few weeks, it is this group of producers, and their inter-linkages, that I want to focus on in a series of blogs. This is something we have been investigating as part of a project on ‘space, markets and employment’, and the implications of new economic linkages for local economies, with one of our cases being beef value chains in Masvingo province. Yet this new dynamic of cattle production has been almost completely forgotten in the current discussions, yet such producers perhaps the potential core of a new commercial beef sector. This week, let me illustrate my point with a series of short case studies drawn from our on-going work in Masvingo province.
Case 1: Mr OM has an A2 farm north of Masvingo of around 250 ha. He runs around 60 cattle there, which are regularly slaughtered. He also milks the cows and sells soured milk locally, and even has plans for a dairy on the farm. He has a truck which can transport live animals for slaughter at the abbatoirs in town. He also owns a small supermarket in town, which now has a thriving butchery section, supplied by his farm. When his own supply is short, or animals are in poor condition on his farm, he sends buyers out to the communal and resettlement areas near his farm to purchase more to make the trip to town worthwhile. He also buys from local abbatoirs. The supermarket was established some years ago when he was working in government and then the NGO sector. During the economic crisis it was not making any money, and it was closed for some time. But since 2009 and dollarization business has been booming. Demand for beef remains high, and he can undercut the main supermarkets (OK and TM), by strategic pricing, particularly of the lower quality cuts. He employs labourers on his farm, as well as at the supermarket, and buyers work on contract. His relatives act as farm managers and oversee the shop.
Case 2. Mrs M acquired A2 ranches in the lowveld during land reform. They also own a butchery and local store in Ngundu. Today the two enterprises are connected, with cattle being brought to the butchery for slaughter and sale from the ranches. They also have a meat supply contract with the local mission which provides a regular demand. The main challenge is transport as the farms are several hundred kilometres away along appalling roads. Sometimes they make arrangements with the town abbatoirs to bring their livestock for slaughter in their own trucks, allowing a greater number to be transported at a time. The herds are gradually being stocked at the two plots, and since there is plenty of grazing they believe that greater numbers can be held, despite the dry conditions. Check out the video, where Mrs M explains how all this works, and her plans for the future.
Case 3: A local family business, into retail, restaurants, transport and a range of other activities in Masvingo, rented the essentially unused CSC abbatoir as part of a new vertically integrated local ranching business. This was short-lived however, as the local deal with CSC was not approved. They switched instead to other local abbatoirs for slaughter. They have combined their own A2 farm with a number of others which are now leased, allowing them to run some 450 head of cattle across 3-4 farms. The other farms had been acquired by local elites during land reform, but were not being fully utilised, and spare grazing was available for leasing. They now have a network of farms supplying beef across the province at outlets they own in Masvingo, Chiredzi, Bikita, Mashava and so on. Their butcheries remain good business, but they are now branching out into a restaurant business in Masvingo town.
Case 4: Lease grazing is also at the centre of another business, run by a white farmer whose family used own over 10000 ha in the province across multiple properties, including unused CSC ranches. These days he only has one farm, which is subdivided which is far too small to keep his cattle on. Instead, he leases grazing from new A2 plot holders. At the peak around 3000 head were grazed in this way across a dozen properties. These are however scattered, and managing these lease arrangements and maintaining fences etc. is a major headache. While he kept this going for around 10 years, in the end he decided the costs of managing such an arrangement were too much. Instead he focuses on the purchase, sale and marketing of stock from a variety of sources, including communal and resettlement areas. Cattle are purchased at auctions and then slaughtered at Montana and Carswell abbatoirs in Masvingo, with sales to town supermarkets, as well as school contracts. Occasional leasing is required, but he no longer maintains such a network of farms, and has many fewer cattle of his own.
Case 5: Mr RM says that “land reform unlocked grazing potential and gave me the opportunity move more cattle from distant areas and lease graze then in nearby resettlement areas like Beza and Kenilworth” He also leases CSC land and Mushandike ranch. He breeds Brahman bulls with indigenous females which he says is ideal for this area. Around 50 cattle are sold per month, nearly all to Montana Meats in Masvingo. Their prices are not the best, but they pay immediately, he says. Two years ago he established a restaurant in town. At the restaurant 1kg of meat can yield $10, so $2000 from a dressed animal of 200kg, instead of $700 by selling it at $3.50/kg (late 2010 prices). The restaurant takes around 2 beasts a week. “While there is stiff competition in the restaurant business in Masvingo, it’s still a good option compared to just meat selling”, he explains.
Case 6. Mr D used to own plenty of land in the lowveld of Zimbabwe around Mateke hills, and had a huge herd of good quality Brahman cattle. When land reform came he diversified his business with connections over the border in Mozambique. He established a camp over the border, and employed people there to create small settlement and large holding pens. He illegally drove cattle across the border, paying bribes to the Zimbabwean and Mozambican officials. On a visit during 2010 there were over 3000 cattle being held at Bazani camp. He also has acquired land for holding pens near Maputo where the cattle are transported for slaughter and sale. Transport is by train or by truck. Some animals are sold locally at the bazaars along the border which thrive on illegal trade with Zimbabwe and South Africa. Animals are still transported across the border, but he is working on a plan to develop the ranch business in Mozambique, where land is plentiful
These cases show that the cattle and beef business is thriving in Masvingo province, but not in the ways it did before. The CSC abbatoir is effectively defunct, a massive white elephant created on the back of subsidies to white farming in the 1970s. Instead smaller abbatoirs are thriving, along with informal pole slaughter linked to butcheries. New value chains are being created, no longer based on massive individually owned ranching operations. Instead, with smaller farm sizes, there is a need to aggregate from multiple farms. In this way benefits are more widely shared, and more people become involved in the market. Links to the big retailers still exist, such as the large supermarkets in Masvingo, but increasingly it is smaller operations, sometimes linked to new farm operations. The new beef entrepreneurs are not poor –they require capital, transport and connections, and are beneficiaries (often from elite circles) of the A2 farm allocations. Former white ranchers are also engaged, through lease grazing, cross-border trade and purchase and selling operations. But again their businesses have transformed. All are generating business and employment, and linking communal and other resettlement farmers into new market networks.
If the consultants employed by the aid agencies want to get to grips with the new beef economy and build practical solutions and new policies on what is happening rather than some perception of what ought to be the case, they need to take a trip to Masvingo. And of course, as already hinted at, it is not just the production side that has changed, but also the pattern of meat retailing, and cattle purchasing. In the next few weeks, the blog will look at the growth of butcheries and the changes in the retail sector, as well as the role of abbatoirs and the challenges and opportunities of local cattle marketing.