Tag Archives: value chains

Tobacco: driving growth in local economies

The rebound of tobacco production in Zimbabwe is striking. From a low in the mid-2000s of only around 48 million kgs, the last season produced 216 million kgs, almost hitting the levels of historical peak production 236 million kgs. Last season recorded exports of some US$450m, with Belgium and China being the major buyers. For the coming season over 75,000 farmers have registered to sell, mostly from the communal areas, but some around 27,000 from A1 resettlement farms. This is dramatically different to the pre-land reform era when tobacco production was dominated by a about 2000 large scale farms.

How does tobacco production, spread across so many farmers, affect local economies? Our studies under the Space, Markets and Employment in Agricultural Development (SMEAD) project took us to the Mvurwi area in Mazowe district. Here you cannot escape the impacts of tobacco. Those growing, mostly through contracting arrangements (nationally this was about three-quarters of all production) are linked to a number of companies who provide inputs, transport and other support. This has allowed farmers with limited capital to get going. The new farmers are employing labour, including many from the former farm compounds, and are sinking their profits into a variety of businesses, including transport and real estate. They are improving their farms and homes, and buying farm equipment. It is an intensely vibrant local economy, with spin off benefits for those running shops, beer halls, transport busineesses and offering services from hairdressing to tailoring. There are downsides too, as the growing of tobacco, and particularly its curing has negative health and environmental impacts. The destruction of local forests for curing wood has been dramatic.

Our film on tobacco in the ‘Making Markets’ series tried to capture some of this dynamic, with interviews from farmers involved at different scales, both on A1 and A2 farms. Watch it here:

There are clear challenges in the tobacco sector, but the last few years has shown that small-scale farmers, supported by contracting arrangements, can contribute high quality products, and reap the benefits of of a high value export crop. And most significantly the benefits are more widely shared than was the case before, suggesting opportunities for a much more inclusive growth pathway.

The post was written by Ian Scoones and appeared on Zimbabweland

 

Leave a comment

Filed under Uncategorized

Comparing communal areas and new resettlements in Zimbabwe V: farm employment, off-farm income earning and livelihood diversification

Growth and development does not just derive from agriculture, but the wider economic linkages that are generated. Successful agriculture generates employment opportunities, it results in multiplier effects in the service industries, and it boosts consumption as people buy more things. Equally, in dryland agricultural settings few can rely on just agriculture for their livelihoods. They must seek piece work jobs in the dry season, sell their skills as builders, carpenters, tailors or hairdressers. And they can make use of local resources for making craft items or agricultural equipment and tools.

In other words, in order to assess the success of the wider economy and individual livelihoods, we need to look at the rural economy in the round, and look at things going on on-farm as well as off, and the flows of resources that come to the area from outside, as well as those that leave. Too often there are narrow assessments of economies and livelihoods that miss these wider dimensions. There are multiple livelihood opportunities in the communal and resettlement areas, as well as flows of labour, remittances and trade. How then do these patterns compare?

A1 farmers employ considerable numbers of labourers. 42% of A1 self-contained and 12% of A1 villagised farm households employ temporary labour, while 16% and 17% employ permanent labour. By contrast in the communal area sites only 2% of households employ permanent and temporary in the sites outside Chikobmedzi, where a few farmers employ significant numbers, although concentrated among the more successful farmers for piecework on larger farm areas. On average though across the A1 sites, households employ 0.53 temporary workers and 0.2 permanent workers, while those employed in the communal areas are vanishingly few. The employment opportunities, although often temporary and low paid, are important for many, and attract hundreds of people to live and work in these areas. This is an important part of the wider economy, and many of these people come from the nearby communal areas, with labour being recruited through family, church and other networks.

Collective work is also important in the new resettlements. As farm sizes have declined in the communal areas the institution of the ‘work party’ (humwe) has declined. Some have put this down to the decline in tradition, but actually it more reflects the lack of need for recruiting labour for farming small plots. This changed in the resettlement areas with larger areas to plough, weed and harvest. Thus across the resettlement sites 37% of households held work parties in the 2010 season, and 36% in 2011, while only 18% and 14% held them in the communal areas.

Off-farm income has always been important as part of livelihood portfolios in rural Zimbabwe. Such income allows people to earn money in the dry season, or offset the consequences of low yields. As part of a diversified livelihood strategy such income sources reduce risk, and spread gains, often to women and children as income earners. We looked at the patterns of off-farm income earning across resettlement and communal area sites, and the pattern was remarkably similar.

In order of importance (in terms of percentage of households engaged) it was trading, building/carpentry, brickmaking/thatching, pottery/basket-making, fishing, wood carving, tailoring, transport businesses and grinding mill operation in both sites, with similar proportions of households involved. Farm-related income earning was also similar, with the rank order being sale of vegetables, poultry, cattle, goat/sheep and fish in both sites. The only contrast was that vegetable sales at 45% of all households was significantly higher in the communal areas, with only 28% of resettlement households selling vegetables regularly.

Perhaps the biggest difference in income sources was in the proportion of households receiving remittances from relatives resident outside the home. The highest level of remittances was in the Chikombedzi area, near the South African border, with 67% of households receiving some remittances in the communal areas and 52% in the A1 villagised resettlements. The biggest difference was in the Gutu area, where the only 7% of A1 villagised resettlement households received remittances, while 33% in the communal areas did so. A similar pattern was observed in the Chiredzi cluster sites, with 10% and 23% receiving remittance. The only area with a different pattern was Masvingo, where a higher percentage of resettlement households received remittances (28% vs 17%).

There are several issues to note here. First, outside Chikombedzi, the level of remittances is low compared to historical studies that showed around two-thirds or more of households receiving such support. Second, with the Masvingo exception, the A1 villagised households were more independent, and less reliant on relatives’ support. This is partly due to the age profile of such households, with fewer older children sending remittances, but also the sense that the new land reform beneficiaries did not need looking after, as they had the land. Indeed, there is plentiful evidence of flows of remittances (in both cash and food) flowing from the resettlements to the communal areas. However the main source of remittances was household members working in Zimbabwe, sending money home. With the collapse of the economy, and the decline in employment opportunities, this flow of income has declined in the last decade, and there has been more reliance on income from outside the country, notably South Africa. But outside Chikombedzi area, this was not a significant source, and there were only a few others who received income from further afield, including the UK.

Both the new resettlement areas and the communal areas have diversified economies, where off-farm work is important. But the resettlement areas are more self-reliant, relying less on remittance flows, labour migration, and instead are generating employment on the farms, and also other business for entrepreneurs, service providers, traders and others. These could not be regarded as either booming or resilient economies, and on the face of it there are considerable similarities between the sites, particularly around off-farm income earning activities. But the overall opportunities offered in the resettlement areas seem to be more substantial, reflecting the greater underlying potential from agriculture, and the presence of a core group of farmers who are accumulating, spending, employing and generating economic activity.

A more detailed look at these diversified economies and patterns of livelihoods, as has been attempted in this short blog series, therefore shows that the resettlements are not simply an extension of the communal lands, but are different on a variety of fronts, with important implications for the future.

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

The on-going Masvingo study research is conducted by Ian Scoones, Blasio Mavedzenge,

Felix Murimbarimba and Jacob Mahenehene.

 

 

 

4 Comments

Filed under Uncategorized

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

5 Comments

Filed under Uncategorized

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

4 Comments

Filed under Uncategorized

Retail revolutions: the rise and rise of butcheries and informal food selling in Zimbabwe

In last week’s blog I discussed the new beef production systems supplying meat to consumers in Masvingo province and beyond. A radically reconfigured pattern of land use and ownership has resulted in diverse new value chains. This has had effects across the chain, including in the retail sector.

In our book, and a paper we wrote in 2008, we discussed the situation in the midst of Zimbabwe’s economic crisis. The picture was one of informal markets, illegal trade and the collapse of the mainstream retail sector. What has happened since 2009 and the stabilisation of the economy and the introduction of a multicurrency environment?

Certainly the growth of butcheries has continued, despite challenges. In a survey in 2006-07 we counted 31 butcheries in Masvingo town (20 in Mucheke township alone) and 9 in Ngundu. All businesses suffered badly at the peak of the economic crisis, and many closed in 2008. However since 2009, they have reopened. In 2013 the number of registered butcheries in Masvingo stood at 32 (14 in town, including 8 supermarkets, with a further 18 in the townships). In 2010-11 there were also 13 in Ngundu and 21  in Chiredzi (5 in town, 12 in Tshovani and 4 in Garage). Unlike in 2006, supermarkets are stocking beef, but only the more premium ‘supergrade’ cuts. In Masvingo, for example, OK and TM source from the larger abbatoirs, such as Carswell and Montana who can supply high quality meat regularly. During the economic crisis they would source from wherever, including meat traders, but, as TM’s meat buyer explained, the quality and reliability was poor, and enjoying a vibrant trade. Today meat traders supply other butcheries who undercut the supermarkets in terms of price. Some outlets are directly linked to abbatoirs, and they can cut costs even further.

Clearly demand is buoyant, despite economic difficulties. While red meat consumption has declined according to official statistics, and there has been a switch to pork, chicken and fish, beef remains people’s favoured meat. But with the change in production system, there is a different pattern and quality of supply. Instead of the top cuts, the lower quality ‘nyama’ is more commonly sold, and this can still be marketed at reasonable prices.  In addition to registered butcheries there are number of ‘mobile’ illegal operations. Masvingo’s Chief Health Officer, Mr Munganasa explained they have a ‘running battle’ with such vendors who sell cheap, imported South African chicken and beef from freezer boxes. A leading local butcher, Mrs Foroma, complained: “We are losing business from these vendors. We pay our rent, and comply with the regulations, but they  undercut us. They become very active in the evening after the municipal authority workers knock off. They use illegal ‘under the tree’ slaughter and sell to food sellers”.  But illegal operators say there plenty of business: “there is room enough for everyone”, one argued.

In order to increase profits, and compete with the multiple independent vendors, many butcheries also have a food selling business, sometimes operated as a franchise. For example Hungoidza butchery at Ngundu established a food outlet in 2000 which has continued as a thriving business, relying on truckers who stop on their way to and from Beitbridge. The butchery makes biltong which they buy, and also has a braai (barbecue). “There is always a brisk trade”, the owner explained.

Also with local slaughter arrangements, linked to butcheries, there has been a growth in sales of ‘fifth quarter’ products (offal, head, feet etc.), including sales to small restaurants and street sellers of food. Take Stanford Maringo. He is in his early thirties and comes from Zaka. He got a job about 10 years ago at Chakona’s butchery in Masvingo. He was a meat cutter and cattle buyer. But the pay was poor and he wanted to have his own business. In the end after trying out vegetable selling in the market, he struck a deal with the  butchery owner that he would continue cutting meat, but could use the machine for slicing ‘mazondo‘, and he could put up a braai stand (barbecue) outside the shop. He sells mazondo to the customers at the next door bar, and has a roaring trade. He also generates good business for the butchery, buying about 80 cows’ feet a week, and selling on uncooked but sliced mazondo to other food sellers and restaurants.  Stanford explains his plans:

My business is doing well. I send money home each month to my relatives in Zaka. Last month I bought a digital camera, and I will start a photo business too. My real, long term plan is become a cattle buyer, and enter meat retailing with my own shop. I also married my sweetheart, thanks to the proceeds from selling mazondo. She is also a butchery employee, but wants to start a hair salon. My mazondo business is going to provide the seed funds for this.

So, from selling cattle feet or tripe on the street, big and better things can happen.  The same applies to the food sellers in Chikombedzi market. This is a massive weekly market centred on the cattle trade. Each week hundreds of animals are exchanged, and thousands of people from all around congregate. A number of food selling outlets have sprung up to serve the customers.  The market is tightly regulated however. The local council charges vendors for their stands, and the Ministry of Health also requires certificates, banning those who are HIV positive from selling food. This all adds to the costs, but it is still profitable.

Nyariwe Ngudu has a stall, and she hires someone each month over the two days of the market to fetch water, wash plates and help her with the cooking. She sells pork from her own farm, but also buys in other meat to serve with sadza (mealie meal porridge). Betty Madondo focuses on cooking relish on market days. She has a mix: some goat meat, but also chicken as those coming from town prefer chicken, she says. Others get game meat and fish poached from the park, but the game scouts are always around at the market and demand bribes for selling.  Although she doesn’t deal in game meat, she still has to pay bribes to the council workers and health officials, as the regulations are so strict. She cooks it in the evening before the market, and the food vendors come and buy from her, who sell on when the buses and trucks arrive for the market.

“There are so many people who come to the market”, Betty explains. “It’s great business, and they all want meat relish”. Although this is an intermittent business, with the market happening only once a month she gets a good profit in a few days, She also sometimes travels to other markets in the area to make up her income. She explains her business model: “When I get cash from relish sales, I buy sandals at the market. I then exchange these for goats, chickens, occasionally pigs, in the villages before the next market”.

Meat retailing has been transformed in recent years, as has the whole meat value chain. All these new enterprises are across the chain are connected, and have links to the land reform programme. From the new farms come the livestock, providing the business for the cattle traders, butcheries, abbatoirs and pole slaughterers. Low paid government workers also take a cut, deploying ‘regulations’ strategically, taking fines or bribes. And from there, food sellers, restaurant owners and others can make a living, providing new opportunities to build, expand and extend their livelihood activities.

The current situation represents a highly differentiated scene with room for diverse enterprises fitting different market niches. As South African and local capital reinvests in the Zimbabwean retail sector, will this diversified, employment and livelihood generating sector remain, or will the longer term picture be one of consolidation in a few big players, as has happened in so many other places, with the smaller operators squeezed out? Hopefully policy and consumer choice will mean that the more diverse pattern that has arisen will continue to thrive.

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

 

 

14 Comments

Filed under Uncategorized

Beef value chains in Masvingo Province, Zimbabwe

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.

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

7 Comments

Filed under Uncategorized