The Sunday News
Mhlupheki, Dube
ONE of the issues that I have failed to understand and hence explain to my constituency which is largely made up of smallholder livestock farmers, is why the apex of the beef value chain is so narrow.
I usually get these questions from producers who are being frustrated by the few abattoirs that service their area. Invariably, the conversation ends with a nostalgic remark of how things were during the days of the Cold Storage Company (CSC).
It is a well-established fact that most value chains if not all, are broader at the base as they are supported by a number of producers, they tend to get narrower as the chain progresses towards its apex, as the number of players decline from one stage to another.
Finally, the shape broadens at the very top representing the many consumers that buy the final product of the value chain.
Now, for the beef value chain, the major concern is the abattoirs and meat wholesalers. This is the stage which for some unexplained reason is only occupied by a few operators, making it look like an exclusive member only club.
It is surprising that in most value chains every stage of the value chain has different levels of players, from small players through middle level players to big guns.
This means that sellers are spoiled for choice as to who to do business with, but somehow with the beef value chain at the level of abattoirs, it is mainly a few big guns that cover the whole country with a very few small-town abattoirs that hardly do more than toll slaughters.
The question is why are there no middle level abattoirs that do significant business? This would help a lot of farmers in terms of choices as the market would broaden at the top. Right now, the country was granted a waiver for trading in hard currency as a Government measure of supporting efforts towards dealing with coronavirus, but it is sad to note that the luxury of having their animals paid for in hard currency will take ages for it to trickle down to the farmers.
One would argue that if there was really stiff competition at the top and abattoirs were hungry for meat, farmers would quickly get a fair deal as each player tries to lure customers.
My call therefore, is for those who have funds and are looking for an area to invest in, to try their hand in running abattoirs.
If for example we have five more abattoirs in Bulawayo, the benefits to the farmer who is getting a raw deal, will be massive. The implications on the whole value chain would be far reaching. I have said it before that there are some big time commercial livestock farmers who for some reason remain content to occupy only the primary level of the beef value chain, yet they have the means and muscle to progress and occupy critical areas such as the apex of the value chain.
It is sad to hear a big guy in the livestock industry who is running over 500 head of cattle, screaming about the market and its unfair practices. You then find the guy now trying to sell his animals via social media platforms simply because formal channels are not offering what he rightfully deserves.
I accept the power of social media in relaying information to a wider audience but for a guy trying to dispose 100 steers, it may be wise to have an abattoir.
You need an abattoir where you can just send your four trucks and the lot is cleared at once!
Let’s seriously think along the lines of investing at the apex level of the beef value chain and open up the market at that level so that we get our farmers spoiled for choice.
A plurality of players at the top will also help to dispel the enduring allegations of abattoirs colluding to suppress the producer prices.
When you have a few players in the market, colluding is possible but with more players this becomes impossible. Uyabonga umntaka MaKhumalo. Feedback [email protected]/ cell 0772851275
