Value in an unbroken chain

Tuesday, 17 February 2015 17:14   |   Written by Dikatso Selemogwe
Value in an unbroken chain

Botswana beef industry holds ample opportunity for investment. Currently the country is said to have three percent of the global market and contributes less than two percent of Gross Domestic Product (GDP) – a small exporter by global standards.
Dr Agapitos Hatzipetros of the International Trade Centre says although Botswana exports to the EU, its market share remained small, and could be explored further to bring greater results. 

Dr Hatzipetros who has done extensive consultancy work for Botswana together discovered that the participation of young people and woman also lagged behind, as men dominate the industry. Botswana has 2.5 million cattle, 80 percent of it in communal farms, which opens up opportunities for exploitation for commercial purposes. Among other challenges, Dr Hatzipetros found out in the study that cattle diseases like foot and mouth and measles slow up the growth of the industry. As a result, abattoirs are subjected to regular inspections by the Department of Veterinary Services (DVS) and the EU.

Beef measles has reduced the volume of beef exported by Botswana tremendously. On average, it is estimated that 20 percent of carcasses in abattoirs are infested with measles.  In the Lobatse BMC abattoir, it has been established that about 1200 tonnes of meat is downgraded due to measles in a year. This translates to about P90 million of lost revenue. As a measure of keeping track of whether the beef originates from foot and mouth or measles prone areas, Botswana also has livestock traceability systems, where each animal is numbered and all its movement recorded in a database.

The system allows for tracing of the whereabouts of each animal at any given time. The system also permits forward and backward traceability of animals. For example, a carton of beef in a store can be traced back to the farm of origin, the time the cattle arrived at the abattoir - through production until packaging in the cold storage as recommended by the EU.The other challenge remains the lack of adoption of new technologies and infrastructure development, as a result of shortage of skills.
One of the areas that remain untapped is in value addition processes.  

The Director of Agricultural Hub, Mmadima Nyathi observes that, “currently beef is sold in its core form, with few differentiated products.” Locally the beef industry has been the backbone of the agricultural sector, the largest component of the agricultural output, accounting for about 80 percent of the country’s agricultural GDP. The beef sub-sector is also an important foreign exchange earner. Outside the EU market, Botswana beef export is done through direct customer contacts and contacts arranged through third parties such as foreign missions. These markets include the Middle East bloc, Hong Kong, as well as Mozambique and Angola.

“One of the major challenges that we face in an attempt to penetrate markets outside the EU is the relatively lower price offered in these markets, compared to that received in the EU.  This has tended to lower the rate at which Botswana beef has been sold in the markets,” Nyathi says.

The success of the beef industry opens up opportunities for a blossoming leather industry. Current the population of cattle is at 2.5 million. This presents an investment opportunity in hides and skin by-products. According to the Agricultural Hub, the government has approved the establishment of a leather park in Botswana, which would allow for export of ready-made leather products. The project was halted as a result of the economic meltdown. Currently, the commission sells its leather in South Africa.

Milk Production
Milk production is also yet to be fully tapped as Botswana has a domestic demand of 45 million litres; importing 42 million litres and only locally producing six percent of the domestic demand.

Livestock insurance is also identified by the Agricultural Hub as one investment opportunity in the beef industry in Botswana.

Botswana’s three EU approved export abattoirs:
•    Lobatse BMC Export Abattoir (this is the only one that is currently exporting to the EU.
•    Francistown BMC Export Abattoir
•    Multi-Species Abattoir Botswana (MASB)-listed for only ostrich meat export.