The Sunday News
Mhlupheki Dube
ONE of the surprising and frustrating aspects in the livestock industry especially from the farmer’s point of view is the reluctance and near inertia attitudes towards making changes that benefit the farmer. The obvious and conspicuous one being the slowness with which apex institutions and major buyers such as abattoirs adopt in effecting mechanisms that address the plight of farmers.
The topical issue being the payment of producer prices in hard currency. Abattoirs will drag their feet and throw in all kinds of justifications and excuses dressed as such, while they milk the situation to the last drop. Only when the situation becomes completely untenable for farmers and there is complete resistance from the market, will they start making changes responding to the market dictates albeit in small doses.
One is forgiven that they would rather bury all the farmers before they make adjustments to cushion the farmer and that is sad. As we speak almost all butcheries and meat retailers are trading in hard currency and we know that some of these abattoir operators also run butcheries but somehow, they are still not willing to pay the farmer in hard currency. Let me acknowledge that some major abattoirs have started making part payments in hard currency. It is a small fraction but as they say half a loaf is better than nothing.
However, my issue is why should it always be the farmer to get the half a loan? Apex livestock market players should seriously consider being responsive to changes that affect the farmer such that they make adjustments just in time before the farmer bears the loss as is always the case. Why should farmers carry all the burdens of the economy ranging from high costs of inputs, changes in monetary policies to climate change-induced droughts?
Slow responsiveness is killing formal markets and subsequently livestock farmers as agile middlemen take advantage of the gap and squeeze farmers hard. Middlemen were the first to pay farmers in local currency cash when the market began to resist mobile money-based payments about two years ago. Big players refused to pay in cash claiming that they are legal entities and cannot be seen sourcing for cash in informal markets.
That was true and it still is true today but we know that some of the middlemen buying are actually runners for big abattoirs players and hence the question is how did they manage to give the guys the cash which they then used to buy at suppressed prices since they were offering scarce cash? Now the local currency has lost favour with farmers because of its volatility and the middlemen respond immediately by offering hard currency for the animals, obviously at suppressed prices since they are the only ones offering the precious currency.
Big players will again drag their feet while middlemen, who in some cases are their runners milk the situation. My question remains, why are big players in the market slow to respond to market dictates especially in circumstances that prejudices the farmer?
I have no doubt that if the situation was affecting them they would react instantly. Yes, it’s a known fact that business is selfish, you take care of your own interests but do you have to kill the cow that’s producing the milk you are selling for business?
I asked the other time, why a chicken and chips fast food joint would easily get permitted to trade in hard currency and players in the livestock industry fail to get that authorisation? Is it a matter of poor lobbying strategy by those representing abattoirs and meat wholesalers or we never lobby at all but opt to pass it to farmers as long as our own nest is not rattled?
I have said it before and I will say it again, I am not just a columnist but I am also a livestock farmer and hence I have experienced the pain of what I am talking about. You can dismiss the article as emotionally driven, because it is but that does not erase the fact that livestock farmers are being seriously affected.
It is my passionate plea that each time big time players in the livestock industry drag their feet in so as payment adjustments are concerned, they should consider what that does to the farmer and the industry in general. It could be adjustments in figures or currency as is the current case. We cannot all be abattoir operators or meat wholesalers so that we begin to benefit from the situation. Someone has to be a producer and another one an input supplier and so on for the value chain to function.
Uyabonga umntakaMaKhumalo.
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