March 1, 2022

Botswana's smallholder cattle producers at risk of declining production due to low prices paid by meat processors

Beef farmers in Botswana have expressed concern that smallholder cattle production could decline, due to the low prices paid by feedlots and meat processing companies.

The country's cattle population had declined from around three million head in 2012 to one million in 2021, and 80% of its cattle were farmed by smallholders, according to recent statistics from Botswana's agriculture ministry.

In interviews with Farmer's Weekly, smallholder beef farmers in Botswana indicated that cattle farming had become unprofitable due to the low prices realised for their animals.

"Because these prices [paid for the animals] are lower than the costs of raising cattle for meat consumption, farmers are operating at a loss," cattle farmer Mpho Andries said.

"The status quo favours buyers only, while farmers struggle to make a profit. Feedlot and meat processing companies dictate both buying and selling prices for meat, because small farmers don't have the bargaining power to negotiate better prices."

Another cattle farmer, David Palai, said it appeared as though cattle buyers were forming cartels and fixing prices to "rip off" small farmers who couldn't access the export market, or sell to the state-owned Botswana Meat Commission, which offered better prices.

He added that due to the low prices received from the feedlot and meat processing companies, some farmers had, in the past, decided not to sell and waited for buyers offering better prices.

"But now, out of desperation, they're forced to accept low prices, because there are no buyers [offering] better ones. The [situation] calls for an independent regulator, especially in the area of pricing, to protect farmers and ensure that they generate profits from selling cattle," Palai said.

Having a regulatory body that ensured reasonable prices based on the cost of raising beef cattle for slaughter would give farmers impetus to invest in the industry, he added.

Botswana National Beef Producers' Union spokesperson Andrew Seeletso said the union was aware of farmers' concerns, and that the government had plans to introduce a meat industry regulatory body. However, he was unable to provide more details or a timeline for its establishment.

- Farmer's Weekly