The Sunday News
Dumisani Nsingo Senior Farming Reporter
THE liquidity crunch prevailing in the country has had an adverse effect on the viability of the livestock sector throughout its value chain a situation which has culminated in low beef demand on the market. The country is enmeshed in a multi-faceted economic crisis and the latest debacle is the debilitating cash shortages in banks which has seen financial institutions limiting withdrawals.
A cattle auctioneer with one of the country’s biggest cattle auctioneers, CC Sales, Mr Richard Wakefield said over the years, farmers have been selling their cattle on cash basis and the shortage was negatively impacting on their efforts to carry out their day to day household obligations as well as improving their livelihoods.
“Many farmers are subsistence farmers and the cash proceeds from the sale of their cattle are used to meet the costs of veterinary permits, police clearances, rural council fees, transport among other things and the balance will go towards school fees and purchase of seed and fertiliser.
“Given their remote locations and their immediate requirements for cash, there is little incentive for them to hold or open accounts. A shortage of cash has a profound impact on them. Plastic money will come at a considerable cost and inconvenience to them,” he said.
He also said cattle sales were mostly affected by weakening consumer demand as households struggle to make ends meet.
“Cattle are a bank and in times of need, farmers will sell their cattle to fund part of their herd in times of drought and a combination of all of these factors will contribute to an oversupply,” said Mr Wakefield.
The cash crunch last week forced another auctioning house, Agri Auctions to postpone its cattle auction sales in Hwange District in Matabeleland North Province.
Cattle auctions were last conducted in the district more than 20 years ago.
Zimbabwe Abattoirs Association Matabeleland vice-chairman Mr Rogers Tavares said the unavailability of cash for the purchase of cattle by traders, abattoirs and auctioneers has had a huge impact in supply and pricing of cattle.
“This is further impacted by the unavailability of cash to the consumer who too is now not spending. Hence the current beef prices. There will also be unscrupulous dealers that will short change the farmers because they have cash. It is hoped that the introduction of the bond notes will be firstly accepted and hopefully bring trading to a normality,” Mr Tavares said.
Renowned cattle farmer from Matabeleland South Province Retired Brigadier-General Levi Mayihlome said a number of farmers were now skeptical about selling their animals due to low prices on the market exacerbated by cash shortage in the country.
“I haven’t sold any (cattle) and I don’t intend to anytime soon. Simple economics will tell you that shortage of cash affects buying power, hence low demand and consequently low prices,” he said.
Over the years the majority of communal farmers rank livestock especially cattle as the most important source of on-farm income thus the low price on the market is likely to have a detrimental effect on the viability of their agricultural enterprise.
Livestock production and management expert Dr Ronny Sibanda of Dial-Honour Consultancy said the cash shortage has affected the livestock sector throughout its value-chain.
“What we are seeing are two things, those that intend to buy cattle don’t have adequate cash to the extent that some cattle sales are being postponed while those with cash are into bargain determining the price they want to buy at while abattoirs are taking a long time to pay because they don’t have sufficient cash at their disposal,” said Dr Sibanda.
The cash shortage has led to the rise of unscrupulous cattle buyers who cunningly fleece desperate communal farmers by coaxing them to sell their animals for a “song”.
Another livestock specialist, Mr Mhlupheki Dube said the price of cattle has drastically dropped, a situation which has significantly affected the viability and profitability of the sector.
“The cash shortage is seriously biting, prices have dropped from about $1, 25 per kg (kilogramme) for commercial grade, live mass basis to $0,94 per kg. The consumer spending has plummeted and buyers can’t get cash from banks as it is. This is really affecting the livestock industry,” said Mr Dube.
In May last year, the producer prices for cattle were $2,50 per kg economy $2, 90 per kg commercial and $3, 60 per kg super. To date the prices are $2,20 per kg economy, $2,40 per kg commercial and $3, 30 per kg super marking an average of 15 percent decrease.
