Tag Archives: Montana

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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Abbatoirs and the Zimbabwe meat trade

Continuing the blog series on meat and livestock, this week I am going to focus on abbatoirs and the meat trade, again drawing on our work in Masvingo. Just as we have seen with the retail and production ends of the value chain, the ‘middlemen’ who source animals, slaughter then and supply butcheries have also been changing.

In the past the Masvingo trade was dominated by a narrow group of abbatoirs – essentially Carswell and Montana, together with the CSC (Cold Storage Company). They were organised around an external trade, mostly to Harare. With the CSC now effectively defunct, the big two remain, and continue to have a healthy trade in the province. Still around 90% of their meat ends up in Harare, although Montana has a number of shops and butcheries elsewhere. Both have networks of buyers who work across the rural areas, sourcing animals which are then transported to the Masvingo-based abbatoirs. They both rent farms near town to act as holding and fattening areas, so as to assure even supplies and higher value. Several thousand head are held on farms near Masvingo at any one time, involving paying grazing fees of $3-5 per beast per month. With the decline in beef production in the Highveld following land reform, assuring supplies from Masvingo is essential.

Local producers however complain about the prices at these two abbatoirs, plus the fact neither pay for the ‘fifth quarter’ (offal etc.), yet this is sold on. In recent years some other abbatoirs have sprung up serving a different market. In Masvingo there are currently three, each reflecting differences in the customer base.

Kismet is linked to a farm and so has direct access to animals. In addition the owners buy at auctions in Mwenezi, Bikita and elsewhere. They have restaurant and butchery in town, and so have a fairly well organised and vertically integrated business. They offer service slaughter, but most people currently prefer Gonyohori abbatoir. Farmers come to abbatoir for service slaughter, and the abbatoir has very good links with butcheries in town. Mr Machingambi says: “I link producers and buyers at this abbatoir”. Although there is no refrigerator, butchers know when meat is available and around 5 beasts are slaughtered each day. Nearly all the meat is economy grade. As Mrs Foroma explained “Meat is meat” in the market she supplies to, and Gonyohori supplies is efficiently and complying with safety standards. The only other abbatoir, Tafira, has gone downhill recently, and used to be the favoured place for service slaughter. The links with the butchery and restaurant trade are not so well developed, although on relative has a butchery in Zvishavane.

The other option is to buy from ‘under the tree’ pole slaughtering sites. Most butcheries do not prefer this because of the health risks, but some argue that as long as the meat is fresh, it is fine, and much cheaper. A number of people operate such sites, although they are constantly being closed down by the municipal health authorities.

Another option is to buy from meat traders who purchase animals, have it slaughtered and sell it on. Again there are complaints about health standards, but the supply is regular and efficient. Mr C explained his business: “I entered the business of meat trading through bartering scotch carts for oxen. I make good carts, and there is a demand. I now buy cattle from those who urgently need to sell” He sources from Mushandike and surrounding areas, and moves them in his 1.5 tonne truck. He rents space in a shop and distributes to butcheries after slaughter. “I regularly supply butcheries. I’m now a petrol attendant, so everyone knows where to find me”, he explained.

Others have entered the trade, finding it lucrative. A group of veterinarians in the district office for example buy up heifers and barter them for oxen or cows who no longer produce milk. They leave heifers with local farmers they trust and exchange across the district. They can also buy for cash. Animals are then slaughtered in town either for cash, or as part of advance deals with butcheries and restaurants. The syndicate buys up to 5-6 cattle per month, and given their expert knowledge and access to farmers they make a good profit to supplement their meagre government salaries.

Finally, there are ‘beef committees’ operating across the rural areas where single animals are bought by a group, usually of civil servants resident in the rural areas. Teachers, police, extension workers and others may be members. This allows a supply of meat which by-passes butcheries and supermarkets, allowing premium deals to be struck.

All such transactions are expected to be regulated, often by multiple authorities. This can sometimes cause confusion and cost. The police have to be involved for any transport of meat or live animals, as a way of preventing stock theft. The veterinary department too must provide certificates for movement, to avoid disease spread. And slaughter places are supposed to be regulated by the health authorities, particularly in urban, municipal areas. Farmers, traders, butchers and abbatoir owners complain that this plethora of regulations, and the involvement of so many different people can be a problem. If someone arrives late or not at all a deal may be lost, or meat may be left unrefrigerated for a long time. Sometimes transport is provided to the relevant people to facilitate the process, but the right people have to turn up with the right forms at the right time. Sometimes too the process is smoothed by a bribe or a gift, and increasingly this has become the pattern. But this too can slow down transactions as officials bid for a better level of compensation.

The beef value chain is certainly complex and diverse with multiple different actors at each stage. But it does seem to work: cheap, safe meat is provided to the customers that want it, and quite a number of people get gainful employment in the process. But is the current, often highly informal, system efficient and effective? Too often we deem anything informal as in need of reform, with a need to formalise, structure and regulate. Yet this system is responsive to diverse demands, and apparently flexible to changing supply situations. Indeed, the main thing that seems to slow things down, and add sometimes unnecessary cost is the complex system of regulation, now associated with bribes and payments. While such regulations and controls are clearly necessary, a more streamlined system is clearly needed to improve returns and value.

As next week’s blog shows, this is even more important in the context of rural livestock marketing.

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

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