Livestock_Competitiveness_Strategy_Discussion_Paper_-_10_Sept_2013.pdf

DRAFT

DOCUMENT

CIRCULATED

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COMMENTS

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ADDITION.

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SHARED

WITHOUT

PERMISSION

OF

LMAC

Livestock

Competitiveness Strategy

Draft Discussion Document

LMAC

8/15/2013

This is a draft proposed livestock strategy prepared based on emerging issues from stakeholder discussions within the

LMAC,

SMA,

PPAZ,

ZADF,

ZAA

and

ZPA

as well as subsector

CIBER

studies undertaken since with the assistance of the

USAID/ZIM-‐ACP

Table of Contents

Introduction and Background

1.1 Livestock Sector in the Zimbabwe Economy

1.2 Why the Livestock Competitiveness Strategy?

Where we are now?

2.1 Animal Protein Demand

2.2 Animal Protein Supply

2.3 What trends affect livestock sector potential?

Framework for Livestock Sector Competitiveness in Zimbabwe

3.1 The four drivers that foster competitiveness

3.2 From Conceptual Framework to Strategy

The Strategic Priorities for Livestock Competitiveness in Zimbabwe

4.1 Strategic purpose and objectives

4.2 Strategic values and principles

4.3 Strategic priorities

Implementation Arrangements

Introduction and Background

The agricultural sector has undergone profound changes since with the land reform programme.

Over the period the economy of Zimbabwe has also suffered significant negative growth characterised by hyperinflation.

Though the economy has partly stabilised following the introduction of the multi-‐currency system, growth since has since tailed off largely due to underperformance of the agricultural sector including livestock production which pre-‐2000 used to account for 60% of industrial activities off-‐farm.

Since stakeholders in the livestock sector have been engaged in intense debate on the key constraints affecting the livestock value chains.

The following are some of the discussion forums that have brought stakeholders together to identify constraints and possible solutions:

• Competitive impact of business environment reforms

(CIBER)

studies and stakeholder meetings on the poultry, beef, dairy and pork value chains were undertaken with technical and financial assistance from the

USAID

Zimbabwe Agricultural Competitiveness Programme

(ZIMACP);

• Following the completion of the above studies the Livestock and Meat Advisory Council

(LMAC)

formed a Livestock Task force which prioritised issues and called for the development of a livestock competitiveness strategy to guide actions to address the constraints;

• Between and member associations of the

LMAC

the Stock feeds Manufacturers

Association, the Zimbabwe Poultry Association and the Pig Producers Association of

Zimbabwe hosted Symposia at which international experts gave presentations on international best practices to resolve some of the constraints identified;

• Member associations of the

LMAC

meet every six weeks and debate on issues affecting various livestock value chains;

and

• The public sector represented by the Division of Livestock and Veterinary Services and

Agricultural Marketing Authority initiated debate on review of key legal and regulatory statutes.

This discussion document attempts to distil the key challenges and strategies to resolve the constraints.

It is a first attempt to develop a livestock competitiveness strategy.

Sections below give context and rationale for a livestock competitiveness strategy.

Chapter gives an overview of the animal protein sector and key trends affecting growth of the sector.

Chapter presents a conceptual framework that guided the development of the draft strategy paper while chapter presents the identified strategies.

Finally, chapter suggests institutional arrangements for implementation of the strategy.

1.1 Livestock Sector in the Zimbabwe Economy

Agriculture is arguably the most important sector in the Zimbabwe.

Though primary agricultural activities only contribute at most a fifth of the Gross Domestic Product

(GDP)

(see Table 1), agriculture supports livelihoods of about 70% of the population that reside in the rural areas.

In addition agriculture contributes indirectly through its impact on processing industries and input producing industries.

In the 1990s agriculture was estimated to support 60% of manufacturing sector activities.

Table 1:

Trends in Agricultural Proportion of the

GDP

Agriculture as percent of

GDP

20.4 16.0 17.9

Source:

ZIMSTATS

April 2013, Poverty and Poverty Datum Line Analysis in Zimbabwe 2011/12

The livestock subsector is an important part of the agricultural sector.

Though the direct primary contribution of livestock to the value of agricultural declined from above 20% in the early 1990s down to less than 14% in 2010, it has since gone up to about 19% in 2012, led by significant growth in the value of beef, poultry and dairy production (see table 2).

When compared with other major agricultural subsectors the livestock subsector is revealed to be very important.

As shown in Table 3, livestock sector value of production is more than the contribution of the grain sector which attracts much attention in agricultural policy.

In addition, the livestock sector also contributes to crop production and food security through provision of draft power and manure.

Livestock is also generally considered one of the most important assets aspired by smallholder farmers and is the most important source of income for households in the drier parts of the country where most of the rural poor reside.

Table 2:

Livestock as percent of value of agricultural production at current prices

Commodity 1993-‐1995 1996-‐2000

Cattle 10.4 7.8 5.0 3.0 10.2

Poultry 6.0 5.4 3.8 8.0 4.8

Dairy produce 3.6 2.9 3.1 1.5 2.9

Other livestock 1.2 1.1 1.1 1.2

Total livestock 21.2 17.2 12.9 13.6 19.1

Source:

ZIMSTATS

April 2013, Poverty and Poverty Datum Line Analysis in Zimbabwe 2011/12

Table 3:

Livestock sector contribution to

GDP

relative to other agricultural commodities

Commodity

Group Commodity

Weight in Agricultural

GDP

Commodity Commodity Group

Livestock

Beef 10.2%

19.1%

Poultry 4.8%

Dairy

2.9%

Pork

0.8%

Sheep goats

0.3%

Ostriches 0.1%

Wildlife

0.6% 0.6%

Grains

Maize 14.0%

18.6%

Wheat

3.6%

Sorghum

0.6%

Barley

0.4%

Horticulture Horticulture

6.5% 6.5%

Oil Seeds Groundnuts

3.2% 5.3%

Soybeans

1.9%

Sunflower seeds

0.2%

Industrial Crops

Tobacco 25.5%

49.9%

Cotton 12.5%

Sugar

6.8%

Coffee 2.1%

Tea

1.9%

Paprika

1.1%

Total

100.0% 100.0%

Source:

The Mid-‐Term Fiscal Policy Statement, Ministry of Finance, July

The above indicates the potential of the livestock sector’s role in achieving inclusive growth growth that also leads to local economic development and poverty alleviation.

For this to happen there is need for a strategy that improves the competiveness of the livestock sector.

1.2 Why the Livestock Competitiveness Strategy?

The need for a livestock competitiveness strategy is supported by the draft agricultural policy.

The vision of the draft agriculture policy is for “a prosperous, diverse and competitive agricultural sector, ensuring food and nutrition security significantly contributing to national development”.

The policy calls for an improvement in competiveness through a series of actions aimed to (draft Zimbabwe

Agricultural Policy:

2012):

• Improvement in productivity:

with government facilitating promotion of “...preservation, improvement and expansion of existing pedigree herds, especially indigenous breeds” and improvement in “animal health and welfare”.

• “Adherence to internationally accepted standards for agricultural inputs and outputs”.

• “Development to a competitive and efficient agricultural marketing system” through promotion of establishment of commodity committees to enhance dialogue between public and private sectors”;

establishment of well developed and functional agricultural market infrastructure;

and establishment of “market information, research and intelligence” system.

• Promotion of “value addition” through promotion and strengthening of “primary agro-‐ processing and value addition”;

promotion of “...consumption of locally processed agricultural products” and putting “...in place special programmes and incentives for investors in agro-‐processing firms”.

Where we are now?

2.1 Animal Protein Demand

Current level of animal protein consumption in Zimbabwe is very low.

Based on data gathered in the recent Poverty, Income, Consumption and Expenditure Survey

(PICES)

the average person in

Zimbabwe consumes only kilograms of meat products (as against the

FAO

recommendation of

50kg per person per annum), less than litres of milk and less than dozen eggs per annum (see

Table 4), a result of the erosion of purchasing power of Zimbabweans over the past decade.

The amounts are particularly low in rural areas where the majority of the poor reside.

The

PICES

survey undertaken between and estimates per capita expenditure to be $475 of which 45% is spent on food.

Of the rural food budget, only a quarter ($55) is spent on animal proteins.

In the urban areas the average per capita income was estimated at $1320 of which food takes $309 (23%) and animal proteins is allocated $114 or 37% of food budget.

As the economy recovers disposable incomes are bound to increase leading to higher demand for animal proteins.

The livestock industries thus need to boost productivity to meet this demand.

Table 4:

Estimated Per Capita Annual Animal Protein Consumption

Products Rural Urban All of Meat Consumed

Beef (kg)

2.04 9.14 4.30 48%

Chicken (kg)

1.53 8.27 3.69 41%

Pork (kg)

0.14 0.73 0.33 4%

Fish (kg)

0.44 1.13 0.66 7%

Fresh and Sterilised Milk (litres)

0.67 3.47 1.56

Eggs (dozens)

3.45 3.69 3.53 Source:

Computations based on

PICES

2011-‐12, ZIMSTATS

data

2.2 Animal Protein Supply

2.2.1 Beef

Since monthly beef cattle slaughters through registered abattoirs have averaged about 20,000 animals (see Figure below).

Industry estimates that an extra 5,000 animals are slaughtered in the informal sector.

Based on an estimated carcass yield of kg, this translates to an average beef supply of about 56,000

MT

per year.

This level of production appears to be adequate to satisfy demand.

Imports of live cattle by the Cold Storage Company

(CSC)

from Botswana between July and March merely led to a reduction in local cattle slaughters (reduction in private abattoir slaughters in Figure 1) leaving total supply fairly constant.

Figure 1:

Cattle Slaughters in Registered Private

(PVT)

and Cold Storage Company

(CSC)

abattoirs

2.2.2 Poultry Supply

The supply of broiler meat has experienced almost linear growth from less than

MT

per month to around

MT

per month since January (see Figure 2).

However, since mid-‐2011 growth seems to have stalled partly due to an influx of cheap imported broiler cuts which average 1,500

MT

per month (see Figure 3) and cost the country about $10.5 million in 2012.

Figure 2:

Broiler Growth Post

2,000

4,000

6,000

8,000

Ja n-‐

M ar -‐0

M ay -‐0

Ju l-‐0

Se p-‐

No v-‐

Ja n-‐

M ar -‐1

M ay -‐1

Ju l-‐1

Se p-‐

No v-‐

Ja n-‐

M ar -‐1

M ay -‐1

Ju l-‐1

Se p-‐

No v-‐

Ja n-‐

M ar -‐1

M ay -‐1

Ju l-‐1

Se p-‐

No v-‐

Poultry meat, mt Table eggs, Doz

Figure 3:

Chicken Imports to

2.2.3 Dairy Supply

Milk supply in the formal markets at million litres per year lags demand estimated at million litres.

Though milk supply has increased since there are signs of stalling in early (see

Figure 4).

As a result dairy product imports mainly from South Africa have increased from about $3 million in to about $46 million worth in (see Figure 5).

Figure 4:

Milk Production

Figure 5:

Dairy Product Imports from South Africa

2.2.4 Pork Supply

Pig slaughters have remained stable at around 12,000 pigs per month over the past year (see Figure

6).

However, the composition of slaughters indicates that they may be destocking underway in the sector.

This is shown by declining porker and baconer and rising manufacturing grade or cull animals.

Figure 6:

Monthly Pig Slaughters

2.3 What trends affect livestock sector potential?

This section teases out areas that need to be looked at to realise the competitiveness of the livestock sector.

2.3.1 Beef

Comparing prices of live cattle and wholesale carcasses in Zimbabwe and competitor countries reveals a number of issues.

Figure shows that live cattle prices in Zimbabwe are comparable to prices in Argentina, a major meat producer, and are lower than the prices in

RSA

and

USA.

Thus

Zimbabwe is generally competitive in the live cattle market.

However, when we compare wholesale carcass prices Figure shows that Zimbabwe is a high cost producer of meat relative to competing cattle industries.

A number of factors may be contributing to this high cost build-‐up from the farm to the butcher’s shop including the following:

• High transaction costs in buying and translocating cattle to the abattoirs;

• High regulatory costs;

• Inefficiency in the slaughter sector;

• Poor capacity utilisation leading to high fixed cost per unit beef processed;

among others.

Figure 7:

Competitiveness of the Beef Sector

Another issue area that needs to be considered in improving the cattle sector is the resource base.

Figure shows that the density of cattle in Zimbabwe is quite high compared to other countries in the region.

Thus any growth in the sector will have to come from intensification rather than expansion in the number of animals.

There are opportunities for intensification given that relative to other countries Zimbabwe has a low off-‐take rate and average carcass weight compared to other countries (see Figure 9).

Improving these two parameters needs to take precedence in any beef improvement strategy.

Figure 8:

Cattle density in East and Southern Africa

Figure 9:

Cattle Off-‐take and Carcass Weight in Select Countries

2.3.2 Poultry

In the poultry sector Zimbabwe’s live broiler prices are comparable to those in the region such as

Kenya and South Africa especially when we consider the large scale integrated broiler farmers.

However, compared to South American broiler producing giants such as Brazil the country is at a competitive disadvantage (see Figure 10).

Based on the high difference between live and cold dressed price it is also clear the country incurs excessive processing costs compared to South Africa, Brazil or Argentina.

These observations indicate problems in both on-‐farm production as well as higher up the production chain that need resolving if the country is to become competitive.

At the farm level there is need to tackle a number of issues including:

• Enhancing productivity through improvement in feed formulations and reduction in mortalities through better health and environment management.

It is deemed that broiler genetics is not a problem as the country’s hatcheries have access to world class chicken breeds.

• Lowering the cost of production on farm through promotion of surplus maize and soyabean production in the country as well as reduce the cost of accessing inputs by locating supply outlets closer to farmers.

As long as the country is dependent on imports of these raw materials it would be difficult to lower feed costs to the levels enjoyed by our competitors.

At the processor level there is need to reduce the distance between farmers and processors, a key feature in highly efficient producing countries such as Brazil.

There is also need to look at the costs imposed on the processing sector by a multiplicity of regulations.

In the table egg sector figure indicates that Zimbabwe is a high cost producer compared to the

South American producers again largely due to the reasons identified for broilers.

Thus similar issues need to be addressed in the table egg sector.

Figure 10:

Competitiveness of the Broiler Sector

Figure 11:

Competitiveness of the Table Egg Sector

2.3.3 Dairy

Figure indicates that Zimbabwe enjoys some of the highest producer prices for milk and yet production has not been growing appreciably.

The key constraints in the dairy sector seem to be:

• Access to sufficient land to grow fodder on farm, the cheapest form of feed for dairy animals;

• Lack of good quality breeding animals;

• Lack of dairy production knowledge especially among farmers new to the industry;

and

• Low capacity utilisation in the processing sector leading to high per unit costs

• Inconsistent/poor electricity supply.

Figure 12:

Fresh Milk Producer Prices in Select Countries

2.3.4 Pork

In the pork sector Zimbabwe has both the highest live producer price as well as the largest farm to processor margins in the region (see Figure 13).

In addition the feed cost problems highlighted in the poultry section, lack of world class genetics has been found to be a key problem in realising comparable productivity.

At the processor level there are a few pig abattoirs which are mainly located in major urban centres to far away from farms leading to high transactions costs.

Figure 13:

Pig Prices in Select Countries

Framework for Livestock Sector Competitiveness in Zimbabwe

A conceptual framework, building on the challenges examined earlier and based on critical success factors for livestock business development, as identified by stakeholders, has been developed to guide this strategy.

It is intended to create an enabling system where the different parts of the wheel work together to achieve one goal of fostering competitiveness and inclusive growth of the

Zimbabwe livestock sector.

The framework consists of four drivers for developing competitiveness which include ten critical ‘cornerstones’ that are needed for success.

3.1 The four drivers that foster competitiveness

1.

An enabling and predictable policy and institutional framework

This driver consists of the following cornerstones:

• Coherent and stable policy environment;

and

• Streamlined regulatory environment.

Local and international investors will not invest in a business however good it is if they risk losing their investment as a result of sudden changes in regulation or unpredictable government policies, or because the law doesn’t protect their investment.

Policies are needed that create a safe and predictable environment for investors and anyone else working along the value chain.

A streamlined regulatory environment reduces cost of doing business.

This encourages investment and fosters cost competitiveness.

These need to have relevant mandates and power, as well as proper checks and balances.

2:

Market driven product development and value addition

This driver consists of the following cornerstones:

• Systems of standards and quality assurance that respond to the needs of consumers in local, regional and international consumers;

and

• Value addition along the whole value chain.

There should be a comprehensive system for standards and quality assurance in place, which includes training, control mechanisms and reporting structures.

These are important to ensure the quality and competitiveness of Zimbabwe livestock products, with farmers given adequate support to achieve high standards.

Self-‐regulation and controls are needed to ensure compliance with these systems.

Most of the livestock products produced in Zimbabwe are sold raw, have little ‘added value’ and earn scant profit.

Yet Zimbabwe imports a significant amount of processed livestock products at significant cost to the country.

Systems, structures and capacity need to be put in place to help

Zimbabwe’s producers add value to their products, for sale in both domestic and international markets.

This would improve both profitability and competitiveness.

3:

Competitive cost structures from production to markets

This driver consists of the following cornerstones:

• Organisation of farmers to reach economies of scale and self regulation;

• Enhancing productivity/closing the yield gap;

and

• Regular and continuous analysis and improvement of cost structures along the value chain.

Small-‐scale entrepreneurs within the livestock sector face huge challenges, and do not realise the economies of scale achieved by farmers, traders, processors and marketers who co-‐operate and collaborate across the value chain.

There is a need to continuously analyse and improve cost structures for processes in order to achieve higher efficiencies and to improve business competitiveness.

This may also be achieved by supporting farmer organisations to reach economies of scale and undertake self-‐regulation.

To achieve cost competitiveness Zimbabwe livestock producers need to close the yield gap currently existing relative to major competitors.

This requires close collaboration between value chain participants and public institutions to adopt cost effective technologies that boost productivity all along the livestock value chains.

As technology is dynamic, there is need for continuous benchmarking of local production techniques to developments internationally to ensure Zimbabwe is not left behind in the technology race.

4:

Communication, knowledge and facilitation services

This driver consists of the following cornerstones:

• Effective information, knowledge and communication services;

• Affordable and accessible financial and advisory services;

and

• Business development services and value chain facilitation to make actors work together.

Entrepreneurs operating at all levels of the value chain lack access to up-‐to-‐date information on prices, supply and demand, weather, disease out-‐breaks, market regulations and other topics that would help them do business in a planned and efficient way.

Such knowledge and information management systems are essential to link producers with markets, and to improve long-‐term planning and quicken reaction times to changing external circumstances.

Non-‐financial services such as training, consultancy and advisory services, marketing assistance, and technology development and transfer all play a crucial role in increasing the competitiveness and efficiencies of small businesses.

But these business development services

(BDS)

are seldom available to small livestock entrepreneurs who work in remote physical locations, and do not know what kinds of services are available and therefore do not make demands of them.

In particular they lack access to state-‐of-‐the-‐art advisory and facilitation services that help farmers increase productivity sustainably, and link them to innovations.

3.2 From Conceptual Framework to Strategy

Each of the above clusters presents factors that are required to make the Zimbabwe livestock protein sector work as a system.

The framework is being used to analyse the state of the different factors in a given situation, and to assess the gaps that need to be addressed most urgently to make the system work.

Not all the factors have to be addressed at the same time.

However, any that are creating a real bottleneck at any given time should be dealt with immediately.

The framework helps to prioritise which parts of the system should be given the highest priority to enhance livestock competitiveness.

This framework has not only helped to conceptualise an efficient and effective livestock sector, but to identify at a more detailed level the real bottlenecks and gaps in the Zimbabwean situation.

Using this, it has been possible to identify and prioritise four key strategic areas in which action is required to realise the sector’s potential.

These Strategic Priority Areas are the subject of the next chapter.

The Strategic Priorities for Livestock Competitiveness in Zimbabwe

The goal of the Zimbabwe livestock and meat sector is for a highly productive and efficient livestock sector that is competitive in both the local and international markets.

4.1 Strategic purpose and objectives

The purpose of the strategy is to guide the livestock sector’s development and transformation towards its re-‐orientation from a focus on subsistence to a new focus on meeting competitively the demands of the market and of commercialisation.

The strategy has four objectives:

• Remove barriers and create incentives for the private sector to invest in livestock and related business opportunities;

• Invest public resources more strategically to trigger growth in the livestock value chains;

• Make livestock production systems more competitive, easily adaptable in order to deal with dynamic markets and the opportunities they bring;

and

• Encourage ‘the right kind’ of institutional frameworks that enable all actors to utilise market opportunities.

These objectives will be realised by pursuing four strategic priorities.

Each is of equal importance, and will need to be pursued at the same time to bring overall results.

All stakeholders will need to play an active role, both individually and together, to achieve these ambitious priorities.

At times, government will need to take the lead, for example by facilitating closer interaction between the private sector and the public sector, or by shaping the policy environment so that it actively encourages innovation.

In other strategic areas the private sector will need to take the lead.

4.2 Strategic values and principles

The strategy is underpinned by a number of key values and principles that guide the actions emerging from the strategy.

These are:

• All actions should be driven by the aim to reach higher competitiveness through efficiency gains in livestock value chains.

These gains can be in terms of actors working together more effectively or through better technology, systems and processes.

• Inclusiveness:

including all actors particularly smallholder farmers in value chain processes.

The strategy aims at an inclusive development, where livestock sector growth is achieved with increased income generation and employment creation in the rural areas.

• Public-‐Private, public-‐public and private-‐private sector dialogue and collaboration with the aim of improving efficiency and growth.

• Transformation:

the present situation is largely influenced by the status quo of institutions, attitudes and people.

The strategy aims at transformation of people’s attitudes and of institutions and organisations as a base to unleash the potential that Zimbabweans and their institutions have.

4.3 Strategic priorities

The four strategic priorities for livestock sector development in Zimbabwe were identified through an in-‐depth analysis of the situation, guided by the conceptual framework.

The strategic priority areas are all operational responses to the four drivers in the conceptual framework, while the issue of information and communication has been fused into the four priority areas.

All priorities need to be tackled at the same time, with the lead being taken by different actors in each case.

Strategic Priority A:

Put markets at the centre of all stages of the livestock value chain activities.

Strategic Priority B:

Focus research development and innovation to better catalyse growth of vibrant livestock value chains.

Strategic Priority C:

Promote smarter organisation of the actors in the sector to enable enterprises to benefit from economies of scale and improved productivity.

Strategic Priority D:

Attract investment by creating an enabling environment.

4.3.1 Strategic Priority A:

Put markets at the centre of all stages of the livestock value chain activities

Background and Current Issues

The agricultural sector in Zimbabwe to date has been largely ‘supply driven’, with a focus on production and getting the product to market.

It has not concerned itself with the needs of the market, and how to satisfy them.

This first strategic priority therefore, aims to reconfigure the sector so that it understands the needs of, and produces for, the market.

The first challenge is for producers to understand market demand, using information that is timely and detailed.

They need intelligence that is up-‐to-‐the minute on quality standards, sanitary and phyto-‐sanitary requirements (food safety and plant health), price indicators, production volumes etc.

to help them realise the potential of their goods and services on the open market.

The needs of different kinds of market domestic, regional and international should be factored into business plans, because they vary hugely.

For example, domestic and regional markets focus on different commodities and high value products from international markets.

The potential of local and regional markets is generally significantly underestimated.

For international markets, emphasis should be placed on maximising income and creating local jobs through the export of higher value livestock products.

For regional markets, prominence should be given to the production of commodities in which Zimbabwe already has a comparative and competitive advantage in the region.

For the domestic market, the strategy should aim to create more structured and organised markets that enable other players, such as processors, marketers and financial services providers, to participate.

Objectives of this priority area

In order to realise the first strategic priority of making the livestock sector more market-‐oriented, we need to do four things:

• Establish a market-‐oriented livestock sector for Zimbabwe in which all activities from breeding, to production, processing and packaging address the needs of the market;

• Identify new and emerging markets for Zimbabwean livestock products, and innovate around our products to better meet niche and premium markets;

• Better position Zimbabwean livestock products, possibly through the creation of a strong brand like ‘Made in Zimbabwe’, which would communicate quality and distinctiveness;

and

• Improve the physical market livestock infrastructure in Zimbabwe.

Challenges

The main challenges are enabling livestock product producers to understand and stay well informed about markets, and to add value to their products to meet market needs.

Questions to consider in this respect include:

• How to create access to up-‐to-‐date and relevant market information by all key actors in the livestock value chains?

• How to drive value addition based on the needs of the market and reach the type, quality and quantity of products the market requires?

• How to discover and explore new markets?

• How to promote innovation and product development in the various stages in the value chains?

• How to create value through a quality brand ‘Zimbabwe’ in the domestic, regional and international markets?

• How to develop market infrastructure that fulfils hygiene standards, that is reachable and affordable (value for money)?

Strategies to address the challenges

A. Market Intelligence

Establishment of a central repository

A central repository will be set up which will cover all markets (domestic, regional and international).

The Livestock and Meat Advisory Council

(LMAC)

is better positioned to host the repository, and it will be charged with compiling, regularly updating and passing on up-‐to-‐the-‐minute market information and intelligence to the livestock value chain players.

The

LMAC

has already forged linkages with a number of institutions to enable it to respond to the multiple information requests.

For example it has established links with:

• Stockfeeds Manufacturers Association on raw materials usage, feed production and prices through quarterly returns;

• Poultry breeders:

on day old chick production and sales through quarterly returns;

• Meat Graders on beef, sheep, goat and pig slaughters on a monthly basis across the country;

• Dairy Services:

on milk deliveries to the formal processors;

as well as

• ZIMSTATS

on trade in feeds and feed raw materials, as well as livestock products.

Further links need to be forged to cover pig and milk product processing and pricing.

The above information is currently being distributed as per request or to membership via email communication.

The

LMAC

will seek to improve dissemination through a web-‐based platform.

International and regional markets

The central repository will hold intelligence on market conditions such as prices of related competing products, demand trends for products, existing competition, packaging requirements, regulatory requirements, tariffs and non-‐tariff barriers, and

SPS

requirements.

Domestic markets

Less complex information is needed for producers working in a domestic market, but they will still require intelligence on buying patterns and trends in different parts of the country, in order to set production and distribution targets.

Production and market mapping

Mapping will be carried out to accurately capture what livestock products can best be produced in different parts of the country, and where there are markets for these products.

This will help to optimise production, and avoid waste in both production and marketing.

b.

Grades and Standards

Access to stable higher value markets and ability to compete in those markets requires adoption of strategies that realign production processes to meet the requirements of those markets.

Key concerns of discerning markets are freedom from disease, acceptable quality standards (healthy, clean, etc), freshness, tenderness, tastiness, among others.

Thus the industry needs to put in place building blocks that move the sector to these norms.

Below are some suggested strategies by industry bodies.

Livestock Identification and Traceability System

The

LMAC

aims to develop internationally compliant livestock traceability scheme that takes cognisance of the changed rural landscape following the land reform program.

Traceability is of particular importance in the livestock sector since it a key aspect of international livestock trade is to exclude products from animals coming from disease endemic areas.

The

LMAC

therefore needs assistance in developing and implementing such a system in Zimbabwe.

Concept note has been developed.

Beef Classification Reform

Beef grading and classification has an important bearing on market repositioning as it determines what type of animal needs to be produced to satisfy the quality perceptions of consumers.

For long stakeholders in the beef sector have expressed disquiet with the current system which is deemed difficult to understand and penalises beef from local breeds.

The Beef Classification and Grading

Committee comprising private and public participants finally met in June to review the Beef

Classification and Grading System.

The meeting agreed that the current system, is now outdated, is too complicated, use of the fleshing index unduly penalises carcases from indigenous cattle breeds;

and does not conform to consumer expectations of what constitutes desirable meat traits.

The meeting resolved to adopt systems similar to South Africa and Namibia based on age, fattiness and weight.

The fleshing index needs to be done away with.

c.

Creating Brand Awareness Locally and Internationally

Local products, if they are to become successful brands globally, should first become recognised in

Zimbabwe.

With a good domestic reputation, they are more likely to attract international investors and marketers.

The government and the livestock industry representative bodies will support programmes of brand building and brand marketing for new and existing products destined for domestic, regional and international markets.

Poultry and pork industries are under severe stress from imports of poultry from South Africa and

South America, reducing formal sales.

Stakeholders have resolved to improve their competitiveness in the formal local markets relative to imports by differentiating their products based on levels of brining, freshness, non-‐GMO fed, ‘proudly Zimbabwe’ product branding, produced under strict modern standards, among others.

The dairy industry has suffered from a shift from fresh milk consumption towards

UHT.

The following are strategies that have been proposed by respective industry representative bodies:

• The Zimbabwe Association of Dairy Farmers and the Zimbabwe Dairy Industry Trust has proposed a strategy to build back demand for fresh milk on grounds of it being more natural and wholesome.

Imported fresh milk due to requirements for cold chain from source will find it difficult to compete in the local market due to distance and high transportation costs.

• The pork industry already has an ongoing quality assured meat program, the Zimbabwe

Quality Assured Pork scheme

(ZQAP)

in which participating pig farms follow a strict production standard covering bio-‐security, animal welfare, among others.

They plan to complement this with a branding initiative to improve access to local formal, regional and international markets.

• The poultry industry with assistance from

CDE

initiative will develop Zimbabwe quality poultry standards and launch a brand marketing initiative.

4.3.2 Strategic Priority B:

Focus research development and innovation to better catalyse growth of a vibrant livestock sector

Background and Current Issues

Genetics, feed resources and good management are major determinants to productivity.

For

Zimbabwe to attain and retain competitiveness it has to focus research and innovations that help bridge the yield gap that currently exists relative to the most efficient livestock protein producing nations.

Access to superior genetics affects different livestock value chains in varying ways.

For improved poultry production, farmers have access to world class genetics through an established and growing hatchery industry.

However, the cost of day old chicks has been high relative to Zimbabwe’s competitors largely due to the high cost of breeder feed.

In addition, limitations in feed formulations and poor on farm management have led to performances that fall short of what is being achieved elsewhere with similar genetics.

In pig production most farmers have lacked access to world class pig genetics available in most major pig producing countries.

For beef, the changed rural landscape has seen most cattle for slaughter coming from the small scale farming sector where there is uncontrolled breeding with bulls of inferior quality.

In dairy small scale farmers also lack access to superior genetics and there is little use of artificial insemination services.

The net result of the less than optimum access to good genetics has been poor productivity levels nationally in most livestock value chains.

Feed resources constitute a significant component to the cost competiveness and productivity of any livestock production process.

For feed raw materials such as cotton cake and molasses, important in ruminant feeds, Zimbabwe has been a surplus producer leading to lower prices relative to competitors.

However, Zimbabwe has in the recent past been a net importer for other feed raw materials including maize grain, maize and wheat bran, and soyabean cake.

Current policies ban importation of

GMO

maize and soyabean products further limiting the sources of such raw materials and leading to periodic shortages and high costs.

Further, duty-‐free importation of maize and wheat flour has limited availability of bran from local milling companies, again necessitating importation of these.

There is need therefore for increased local production of maize and soyabean and/or loosing restrictions on

GMO

derived raw materials to help reduce the cost of the raw materials.

Feed formulations are failing to keep pace with genetic potential especially in chicken and pig production.

In addition, there has been an increase in unregistered poor quality feeds on the local markets.

There has also been inefficiency in the use of on-‐farm feed resources due to a number of reasons.

In the newly resettled areas, lack of fencing and security concerns have necessitated night kraaling of cattle leading to reduction in feeding times, while poor knowledge of fodder production and planning by new dairy producers have denied effective use of less expensive on-‐farm feed resources.

Also most cattle are sent to abattoirs without being pen-‐fattened leading to low average carcass weights.

On-‐farm management has been identified as a key obstacle in bridging the yield gap.

Of concern has been poor health management that have led to high rates of mortality and low weight gains in meat production.

Farmers, especially in the smallholder sector, lack adequate knowledge of importance of water quality and pH, environment control (temperature, lighting, ventilation) as well as feed management.

Objectives of this priority area

The ambitions of the second strategic priority are two-‐fold.

First, is to increase productivity of primary livestock production activities through closer collaboration between research and industry

(including farmers and research organisations) on production technology development and extension that is driven by market demand.

Second, is to support innovative initiatives that supply or preserve superior genetics.

Third, to adopt initiatives that reduce the cost of livestock production especially feed access.

Challenges

The main challenges involve how to make sure that research, development, innovation and technology are used to improve productivity.

Questions to consider include:

• How to create institutional arrangements that enhance collaboration and synergies between research institutes, industry and other stakeholders, so they impart appropriate livestock production technologies for enhanced productivity?

• How to improve the genetics available to farmers?

• How to preserve the current gene pool available to farmers?

• How to ensure the quality of feed resources keeps improving to match the genetic potential available to farmers?

• How to encourage the product yield of animals sold by farmers?

• How to reduce cost of key inputs in livestock production?

Strategies to address the challenges

a. Innovations and collaboration in extension

The changed rural landscape brought about by the land reforms demand a different approach to how livestock are raised.

We are now dealing with mostly small holder farmers lacking experience in commercial livestock production and without a lot of resources.

There is need for the development of effective and affordable production technologies for the new farmers.

Currently there many non-‐ governmental organisations, private sector players as well as public institutions that are involved in technology extension.

There is need to harmonise these messages as well as coordination of the technology disseminations to ensure adequate coverage and avoid duplication and confusion.

The stakeholders (farmers organisations, industry associations, NGOs and

DLPD

institutions) in each livestock value chain (dairy, beef, pork and chicken) will form coordination platforms to exchange ideas and undertake collaborative demonstration plots and campaigns.

b. Genetic Improvements

The livestock industry and Government will undertake the following breed improvement programmes:

Beef Genetics Initiative:

Improving the quality of cattle genetics available to smallholder farmers who now are the main suppliers of slaughter cattle is paramount if beef processors are to get the throughput and quality they need to supply the market.

It is in the interest of private feedlots and abattoirs that are currently operating at below to be involved in ensuring smallholder access to good genetics.

A private feedlot operator, Makera Cattle Company, is providing groups of smallholder cattle farmers improved bulls as well as semen.

Government will provide incentives for the up-‐ scaling such initiatives.

Dairy Genetics Initiative:

Zimbabwe Association of Dairy Farmers in collaboration with LoL has been providing subsidised

AI

and

PD

services for SHFs.

The livestock industry will work with other development partners to expand such breeding services in order to improve dairy breeds for increased milk yields in the smallholder dairy sector.

Pig Genetics Initiative:

A 1% of wholesale value levy on pig slaughters to fund operations of the Pig

Industry Board

(PIB)

was proposed in 2008.

The Pig Producers Association of Zimbabwe

(PPAZ)

believes

PIB

has shifted from its mandate to become a competitor to the pig producers.

PPAZ

has suggested instead a joint venture company between

PIB,

PPAZ

and international pig genetics company that will sale breeding gilts to local pig farmers.

The investment would be funded by a once-‐off levy of pig producers and would solve one of the major constraint facing local producers.

c. Genetics Resource Preservation

Indigenous Cattle Genetics

Research has shown that indigenous cattle breeds such as Mashona, Tuli and Nguni are the most efficient animals in utilising natural resources under our conditions.

However, these breeds are under threat from heavy infusion of foreign breeds.

Stakeholders will undertake a breed conservation programme involving identification of superior animals of indigenous breeds, collecting and storing semen and embryos from such animals, and incentivising on-‐farm and on-‐station pedigree breeding of local breeds.

Cow Herd Conservation and Growth

There is little room to expand beef production through adoption of extensive production strategies due to the current large herd size.

The strategy is to get more meat from the current numbers of cattle.

What is needed is shifting the herd composition towards more breeding cows and heifers.

This can be accomplished through reduction of sale for slaughter female cows in times of drought through a drought feeding programme.

d. Feed Quality Improvements

In the stock feeds industry, unregistered informal stock feeds manufacturers a source of poor quality feed.

Poor communication between breeders and feeds suppliers have also led to feed formulations lagging behind what is required to get the best out of new genetics.

To counter these anomalies the feed industry will develop and implement Good Manufacturing Standards Protocols for feeds and host regular conferences to ensure feeds are in line with requirements for optimum productivity taking advantage of latest technological advances.

e. Innovations in livestock health services

Private veterinary drug suppliers and consultants will collaborate in campaigns to improve health management and disease surveillance to reduce mortality losses.

Private sector(drug distributers) and Government(DVS and

MCAZ)

will jointly review drug registration and importation measures

(MCAZ)

to make sure producers have access to latest innovative technologies in the health industry.

f. Value-‐addition of current off-‐take

Increasing off-‐take is only one parameter in increasing productivity of farm animals.

With current beef carcass weights averaging around kg compared to greater than kg in regional competing countries there is scope for more meat production with current off-‐take levels through on-‐farm feeding before sales.

This has the advantage of improving both weight and grades of beef to the benefit of the farmer.

Example of such value addition is the community feedlot scheme in

Mangwe which has been well received by farmers.

g. Lowering Cost of Key Inputs

To be competitive there is need to lower the cost of key inputs into livestock production such as well bred breeding animals and feeds.

Stakeholders will adopt the following priority strategies to achieve this.

Adoption of mini-‐breeders:

to lower cost of DOCs

In the poultry value chain the main concern with accessing good genetics is the high cost of day old chicks.

The high cost of day old chicks mainly due to the high cost of feeding grand-‐parent and parent stock incurred by breeder firms.

Breeders will explore emerging technologies of ‘mini-‐ breeders’.

These are small breeding birds that are less demanding in feeding but do not compromise the performance of the resultant day-‐old chicks in broiler and layer production.

Easing movement of cattle breeding animals across regions and countries

There is currently imbalance in the availability of good cattle genetics across regions of Zimbabwe.

This has been partly due to restrictions in cattle movement as part of managing spread of foot and mouth disease.

Good genetic material in

FMD

susceptible areas is not finding its way to clean zones which lack access to good genetics.

Cattle value chain participants will explore the setting up of bio-‐ secure farms in the

FMD

susceptible zones where heifers would be screened for the disease allowing clean animals to be offered for sale to farmers in clean zones.

This would add value to animals from

FMD

susceptible zones while increasing supply of breeding females in FMD-‐free zones at affordable prices helping in the herd development countrywide.

This can be supplemented by easing of importation of good genetics from FMD-‐free zones in our neighbouring countries including Namibia and Botswana particularly during periods of drought when farmers in these countries would be wishing to off-‐load breeding animals at low prices.

The Government will create a market for locally produced stud animals.

Some locally produced breeds(Boran, Brahman, Tuli and Mashona) are in demand in the region, and by getting export protocols in place with neighbouring countries, this will provide a stimulus to stud breeders which will have a positive impact on local genetics.

Access to feed raw materials

The cost of raw materials for the stock feeds industry is currently very high due to low levels of production which is necessitating importation.

Thus solution lies in increasing local production of key resources such as maize and soyabean and/or reducing the cost of imported raw materials.

The livestock industry will adopt the following strategies to reduce raw material costs.

Reducing costs of importing feed raw materials

Feed industry and Government will work together to streamline the procedures to import maize and soyameal.

In particular they will decide on ways to simplify and reduce duplications in the permit system.

Currently feed companies have to get permits from the Department of Veterinary Services, the Economics and Market Divisions as well as the Agricultural Marketing Authority.

An alternative arrangement that could be to appoint one institution to issue permits following weekly permits adjudication meetings involving all the other institutions.

Feed companies and Government will also examine the implications of the current ban on use of soyameal derived from

GMO

soyabean especially in light of the fact that countries exporting livestock products to Zimbabwe are using cheaper

GMO

derived soyameal, and there not being import bans on livestock products from

GMO

soyabean fed animals.

Production of feed raw materials

Feed companies will increase contracting of farmers to grow soyabean and maize with Government instituting measures to ensure compliance with contracts.

The livestock industry stakeholders will encourage government and development partners to increase support to smallholder maize and soyabean production or to provide working capital support to feed mills who contract smallholder farmers.

Benchmarking Information

Finally, in order to continuously monitor the sectors’ cost competitiveness…