Rural cattle marketing in Zimbabwe

As a result of the changes in the beef value chain, discussed in previous blogs, rural cattle marketing has been transformed in recent years. No longer are abbatoirs able to source animals in large numbers from single ranches, now they must purchase from multiple sources. These include council run sales pens and from networks of cattle buyers employed on contract the abbatoir or from individual cattle buyers. These are quite different arrangements, with contrasting pros and cons.

The main Masvingo based abbatoirs, notably Montana and Carswell, but also some butcheries employ buyers scattered across rural areas, working under area coordinators. When the buyer has sufficient animals in an area, they will call the abbatoir who will send a truck. Usually around 35 animals are required for a trip. Cash is then paid on receipt on the basis of estimated weights. No money is paid for the ‘fifth quarter’ (head, feet, offal etc.), and the transport is presented as ‘free’. For producers unable to trek their animals to an abbatoir (essentially Masvingo or Chiredzi) and pay for feed, transport and so on, this arrangement works well. Prices are not the highest, and some complain that weight estimates are not accurate, but this is one way of getting a reasonable deal. For more immediate sales, however, especially in times of urgency, for example if funeral costs have to be covered, other options may have to looked for, including selling to individual buyers and at council auctions.

Mr Z is an individual cattle buyer based in Chikombedzi. He has a number of businesses including a general store, but in recent years he has taken up cattle buying across the area. He complains that this is not so profitable now. He cites several reasons. Buying from council sales pens has, he complains, has become prohibitive because of the levies they charge. “This is now 10.5% on the sale price of every beast. For nothing!”, he exclaims. He now prefers to buy from individuals, but this means moving door to door and so transport becomes a significant costs. Also, disease outbreaks in an area can wipe out business at stroke as all movement is prevented by the veterinary department. This happened recently with foot-and-mouth disease. This, he explains, is a common disease, with regular outbreaks, but it affects trade, but not the cattle as they are used to it.  He used to sell on to large companies like Montana or Bulawayo Grills, but he says they don’t offer good prices, and rip off the cattle buyer. He prefers to transport animals to Chiredzi himself and sell to butcheries directly. Finally he says he has to pay fees to Chiredzi district council every few months to have a licence to buy. “What do they give me in return?” he asks.

Mr V has been a buyer in the area for years. He used to have a farm, but this was taken in land reform. Now he concentrates on cattle buying. He used to attend the public auctions, but because of fees and attempts by officials to extract bribes he only goes along to watch, and check out the prices. Instead he creates his own buying points and alerts people in the area through his contacts, usually village headmen, who he all knows. He has points all over the Chikombedzi and Sengwe area. Mr V employs someone to weigh animals using a belt, and he pays on account, paying farmers once the animal is sold on. He prefers this as he does not want to have thousands of dollars on him on buying day.  Since he is able to avoid the council levy his prices are reasonable, and he is well trusted in the area. He involves the police and veterinary department too, and picks them up and feeds them on a buying day. If someone refuses his price, he says” Go and sell at the formal market where the council takes a big cut, and see what the price is there!”.  He employs drovers to move cattle from the buying point to an abbatoir or to a holding place which he may rent.  Drovers are usually paid $5 per day, for trekking cattle over 10km or so. For longer distances he uses trucks.

Despite the proliferation of informal marketing, the council auctions still go ahead. In Chikombedzi they are a big event, attracting many others selling all sorts of wares at the market. When an animal is sold at the market, a fee is levied, but also the owner must present his/her stock card to have the sale registered by the police and the veterinary department. Both charge fees, around $2 and $10 respectively. However, very often, informal arrangements are struck. Bribes are sometimes paid to avoid registration and permits, and buyers and sellers can informally agree to settle outside the formal auction to avoid the council levy. The council official can be paid off too, and no receipts are logged.

While there is some competition in the cattle market, the levy system on council run auctions and the (semi)illegal nature of other sales operations means that overall sales levels are depressed, and producers and consumers do not necessarily get the best deal. A recent USAID study showed how changing the levy system could result in a massive boost of supply through formal networks, according to an economic model. But it is not just the costs of formal marketing. Lack of market knowledge is another issue, as farmers do not necessarily know the real price of an animal, as auctions are rare, and not competitive. Sometimes distress sales mean that much lower prices are gained, as animals are sold on at knock-down prices just to get the cash.

Market engagement needs more active organisation on the part of producers. As the manager of a leading abbatoir in Masvingo put it: “Rural people need to get together. If they could get together 200 to 300 cattle at one point, they could get really worthwhile prices”.  As small herds scattered across the rural areas are now the main suppliers of beef nationally, new ways of organising marketing are needed. The high tax formal system is clearly not effective, and private buying may be undermining producer prices through lack of competition. If Zimbabwe’s meat eaters are to continue to get good, cheap meat, a rethink is clearly required.

For more on wider debates about trade, see the discussion in the comments section on the Retail Revolutions blog in this series.

This post was written by Ian Scoones and originally appeared on Zimbabweland

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5 Comments

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5 responses to “Rural cattle marketing in Zimbabwe

  1. William Doctor

    On a different topic (slightly), I note a recent article of yours in the IBTimes. In it you call for ‘external investment and support’ but make no mention of compensation, which should happen first.

    You also fail to mention the fact that racial discrimination is now enshrined with the Zimbabwe constitution [given that white farmers who purchased their land after 1980, with Govt approval – will into be compensated for the land – but blacks will]. This is in violation of the UN human rights charter to which Zimbabwe is a signatory.

    Perhaps human rights should come first, then investment?

    Also, you mention the success of the Zimbabwean tobacco industry, but recent articles have suggested this has been subsidised by the Mugabe regime as a propaganda tool. A recent Editorial in the respected Business Day suggested that any reports of agricultural success in Zimbabwe are a ‘red herring’.

    As you say, ‘there is much potential, as yet unrealised’ – but should Zimbabwe not deal with compensation, electoral fraud, endemic corruption and institutionalised race discrimination first?

    • Yes, a slightly different topic! I would encourage comments on rural marketing. However let me respond to your points.

      Fair compensation in line with the Constitution is an important precondition for sustained investment for sure. While disputed by some, the Constitution was accepted by a large refendum mandate and by all political parties.

      See earlier blogs on these themes:

      https://zimbabweland.wordpress.com/2012/09/10/compensation-for-land/
      https://zimbabweland.wordpress.com/2012/03/19/dealing-with-the-national-debt-and-farm-compensation/
      https://zimbabweland.wordpress.com/2012/07/30/land-and-the-draft-constitution/
      https://zimbabweland.wordpress.com/2013/03/25/zimbabwe-has-a-new-constitution-but-disputes-over-the-land-provisions-continue/

      As for the rebounding of the tobacco industry being a ‘red herring’, I beg differ (as I often do) with the Business Day editorial line. Just ask any of the new farmers, and many workers, traders and others associated with the tobacco industry, and they will point to the benefits. There has been support from contract farming companies, including the Chinese, but vanishingly little state support.

      • William Doctor

        This may be ‘off-topic’, but it remains relevant since you feel the need to publish articles [in Western capitalist media outlets] calling for investment in Zimbabwe’s agricultural industry. Perhaps you sense, as most of us do, an imminent secondary collapse of the economy and feel a need to counter criticisms of the Mugabe regime.

        As I’ve said before, compensation must come first. Citing Sokwalene ‘The issue of compensation is urgent because it is the trigger point for rehabilitation, investment and productivity.’ You fail to mention this in your IBTimes article, and that is instructive because you obviously feel that compensation should be secondary. It shouldn’t. And what I strongly suspect is that any form of compensation [for white farmers] will be strongly resisted by the Mugabe regime, and their supporters, quite simply because they do not want to see the return of ‘white capital.’

        Your blogs on compensation are balanced, but again you refuse to deal with the issue of racial discrimination entrenched in the Zimbabwean constitution. So, white Zimbabweans who purchased their land post 1980 [with Govt consent] and who then lost their land under the FTLR exercise, will not be compensated for the land – but for improvements only. Black Zimbabweans who purchased land post-1980 and lost it under the FTLR exercise will be compensated for improvements AND the land. That’s illegal. And saying that the constitution was ‘accepted by the majority’ is not acceptable. Racism was embedded within the Australian constitution up until recently [approved by the majority] – and that doesn’t make it acceptable.

        This won’t go away.

        Regards the Business Day article, why would they make false assertions? Perhaps a blog outlining funding for the tobacco industry, and opportunity for the Business Day editorial team to justify their comments?

  2. am

    Recently I heard a speech by a member of the JOC emphasise the need for productivity in the fields. I think the President made an announcement of a similar nature since the election.
    In addition there are recent press statements by the government stating they are going to reclaim unproductive fast track land and reallocate it to productive farmers.
    Further the government has announced the cancellation of the inputs scheme for next year and that these inputs would now be available through the retailers.
    Is there a connection in these things or connections? They would seem to be the major statements of agricultural policy since the election.

  3. William Doctor

    @ ZimLand

    I have to say – I disagree with you on most things – but at least you allow my comments to be published.

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