This document provides an outline and updates on the "Competitive Smallholder Livestock in Botswana" research project. It discusses the motivation and objectives of defining and improving the competitiveness of Botswana's smallholder livestock sector. Key points include: smallholders produce most of Botswana's meat but cattle productivity is low; the project aims to enhance smallholder competitiveness through better understanding production systems and improving market participation; and work involves surveys, trials, and research on topics like efficiency, markets, and policy. Updates provided include training conducted, data collected, model scenarios analyzed, and project outputs and presentations.

1. Competitive Smallholder Livestock in
Botswana
Seminar at DAR- 26/02/2014
Dr. Sirak Bahta
International Livestock Research Institute (ILRI)

2. Competitive Smallholder
Livestock in Botswana: Outline
 Introduction and motivation
 Research questions
 Objectives
 Partners and Collaborating
Institutions
 Work plan and research finding

3. Motivation
Botswana smallholder sector:
• produces most of Botswana’s meat
• provides 70-80% of agricultural GDP
• uses significant land and water resources
50-80 thousand smallholders own (most of the country’s) cattle
100,000 smallholders own sheep and goats

4. Motivation
Cattle
• ave. <220 kg (even with 4-5 year oxen)
• <50% calving rates
• <20% off-take by the commercial export slaughter
sector
• growing, multiple domestic market
• promotion of specific production and marketing models
• capacity-building initiatives
Sheep and goats… thought to…
• be of low productivity.
• feature little value addition
• have interactions with cattle
(at farm level, at input service level, amongst
traders, in the retail meat market)

5. Motivation
A research project
Existing research:
• focused on exports
• focused on beef
• focused on production
This project aims to enhance the competitiveness of
smallholder livestock producers in Botswana

6. Research questions
• Who is the smallholder livestock producer, and
what factors constrain his/her livelihood?
• How can livestock-related marketing systems be
improved for the benefit of smallholders and
the rural population?

7. Objectives
 To better define smallholder livestock
production systems, identify the factors
affecting their productivity, and assess their
competitiveness
 To understand and improve conditions for
market participation and value addition in
markets for livestock, livestock products and
inputs
 To strengthen agricultural education and
extension capacity.

8. Partners
 ILRI - International livestock research
institute
 MOA, Botswana- Ministry of Agriculture
Botswana
 ACIAR- Australian Center for Agricultural
research

9. Collaborating institutions
 BIDPA- Botswana Institute for Development Policy
Analysis
 Department of Agricultural Research
 Department of Veterinary Sciences
 BCA-Botswana College of Agriculture
 Department of Agribusiness Promotion
 Department of Agricultural Statistics

10. http://botswanalivestock.wordpress.com/

11. Late 2012
 Consensus on competitiveness and factors
affecting it (Competitiveness workshop on
October 2012)
 Understand competitiveness of smallholder livestock
 Answer the questions:
1. What can be done to raise competitiveness?
2. Who should do it?
3. What partnerships are available to this project?
Major work plan items late 2012

12.  Assess animal health problems, raise local
animal health capacity
• PE training in Serowe
• 25 extension officers trained on PE
• Blood and serum sample collection
• Survey on disease prevalence
• Majority of the sample are tested at BNVL
Major work plan items late 2012

13. Major work plan items late 2012

14. Objectives of the snapshot survey:
• Characterize the value chain actors involved with
smallholder livestock production;
• Evaluate marketing systems of smallholder livestock
keepers;
• Compare results with the recent FAO study and
extend them to enterprise level;
• Analyze product quality preferences and retail
consumer purchasing demand;
• Identify possible policy interventions to enhance
livestock competitiveness.
Major work plan items late 2012

15. Initial data collection on Value Chain
- Snap shot survey conducted in central district to understand the
livestock value chain
Major work plan items late 2012
Livestock Producers
BMC/Abattoirs
Local
cooperation
Individual
farmers
Government
programs
Speculators/
Agents
Feedlots
Butcheries
Input suppliers
Supermarkets
Consumers domestic
market Consumers
externalmarket
Provision ofinputs such
as feed and drugs
Indicates the direct selloflivestock to
consumers and consumers obligatory
to killthe cattle in slaughter houses
Two way supply/demand oflivestock
Export ofhigh quality meat to
foreign markets
.
..
Major market channels for cattle
Major market channels for smallstock
Exports

16. Figure 1: Total cost per household, subdivided by number of animals held (Total
Livestock Units)
Total costs subdivided by Herd size
Major work plan items late 2012

17. Figure 2:Gross margin by livestock herd size (Total Livestock Units)
Farmers’ discussion groups identified the following factors as constraints on financial performance:
Limited numbers of veterinary officers to provide sales permits
Technical problems with the bolus, such as read errors and double insertion
Major work plan items late 2012

18. Problems restrict producers’ access to the export markets
and promote the alternative, and usually lower-priced
market channels for cattle.
• BMC’s monopoly on cattle purchases, making it a local
price maker
• Exploitation by agents/speculators
Producers claim to be powerless as market decision-makers,
particularly in the face of continuing costs when sales dates
are uncertain.
• Lack of awareness and information about the quality
requirements of the markets for beef and small stock,
both live animals and meat, is a major problem
Major work plan items late 2012

19. Figure 3: Products’ attributes important for consumers
Consumers’ perception of meat quality
Major work plan items late 2012

20. Figure 4: Factors consumers look when they buy meat (Sellers Perspective)
Retailers’ perception of meat quality
Major work plan items late 2012

21. Results of Value chain analysis: System
dynamics model
Livestock Keepers BMCSelling to BMC
(mixed grade catlle)
High Quality (prime, super, grade 1
& 2) Meat Exported & Sold to
Domestic High Quality Retialers
Feedlots
Cattle sold to feedlots or
kept on farmers own feedlot
(weaner)
Selling High Quality Cattle
(prime and super grade) to
BMC
Livestock Outflow for
Various reasons
(death, gift, stray,
theft, donation,
individuals, festivals,
etc.)
Lower Quality Meat
Sold in Domestic Market
Big Butcheries (Carcass
Distributor)
Selling to Big Butcheries
(cattle-all grades)
Small/Local
Butcheries
Selling to Small Butcheries
(mostly old cattle, goat, and
sheep)
Lower Grade Meat
selling (cattle)
Selling to locals
Selling to Chain Stores &
Hotels (Prime, super, grade
1 & 2)
Government
Programs
(cattle, goat,
and sheep)
Selling to Domestic
High Quality Retailers
Figure 5: Cattle market channels in Botswana

22. Figure 6: Portrayal of model structure

23. Scenario 1: Baseline scenario
• The model programmed to replicate the status quo of
beef production and trade in Botswana
• Exports to the EEA (over 75% of export market share)
are blocked for two years. Thus, demand from the
export market declines by about 75% for two years
based on lost access to the EEA markets, and then
returns to normal.
• FMD outbreaks were programmed to occur randomly
once each 7 years (based on historic outbreaks). The
reported simulation introduced an FMD outbreak in
week 98 (simulation time horizon is 260 weeks).

24. Scenario 2: Market liberalization
• Looks at the effect of market liberalization on the financial
and productive performance of producers and other value
chain actors.
• In addition to the existing domestic and export market
channels, this policy targets exports of weaners to South
Africa.
• This scenario introduced to look at controlled sales of
weaners and how it might influence production and
marketed volumes for different value chain actors.
• It evaluates the effect of exporting 2,000 weaners starting
from week 52 (2,000 is a random initial value; the model
endogenously calculates weaner prices).
• This scenario is motivated by the policy debate in Botswana
on the positive and negative effects of removing BMC’s
monopoly over beef export channels

25. Scenario 3: Baseline + FMD freedom
• This scenario, reports the results of a FMD-free
scenario of cattle production and marketing.
• This scenario assumes a smooth flow of cattle to the
export market without any disruption due to animal
diseases outbreaks.
• This scenario is motivated by the fact that large scale
FMD outbreaks and outbreaks in the EU export
zones in Botswana, unlike small regional outbreaks,
do not occur as frequently as outbreaks in FMD-
endemic and FMD vaccinated zones

26. Scenario 4: Market liberalization +
FMD freedom
• This scenario tries to assess how FMD
freedom combined with market liberalization
will influence market dynamics within the
beef value chain.

27. Value chain actors financial performance relative to
baseline scenario
Scenarios Producers Feedlots BMC
Traditional
urban and
rural
butchers
Modern butchers
and retailers
Market
liberalizatio
n only 36% -3% -3% No change No change
FMD control
only 101% 21% 42% 10% 1%
Market
liberalizatio
n and FMD
control 172% 28% 36% 10% 1%

28. Producers cumulative profit

29. Feedlots cumulative profit

30. BMC cumulative revenue

31. Traditional urban and rural butchers
cumulative profit

32. Modern butchers and retailers cumulative
profit

33. • Without improved FMD control, liberalizing the monopoly
power of BMC has little impact on producer market access in
domestic and export market channels.
• Strategies that combine FMD control and market liberalization
generate benefits for producers and other value chain actors.
• Investment in FMD control is not without cost:
– Marginal benefits in market access likely to be diminished
by significant fixed and recurrent investments in disease
surveillance, vaccination, and maintenance of FMD zones.
– This suggests that although partial market liberalization
has potential benefits, other value-adding strategies need
to be considered.
Results of Value chain analysis: System
dynamics model

34. - Household survey
- A structured questionnaire was used
to collect data.
- Data was collected in collaboration
with BCA
- 15 enumerators and two BCA
lecturers involved
- About 600 households are
interviewed in 1 and ½ months
Major work plan items 2013

35. Major work plan items 2013

36. Data collected include detailed information on
- Costs and returns and production inputs such as feeds,
veterinary supplies and advisory services, labour and fixed
inputs.
- Cattle breeding method,
- Disease prevalence,
- Access to extension
- Market services
- Household socio demographic characteristics.
- Food security and risk information
Major work plan items 2013

37. Some of the research topics include:
• Market participation, commercial orientation and
channel choice
• Animal health cost analysis
• Profit efficiency and competitiveness
• Technical efficiency
• Feed related research output
• Policy: trade and marketing
• Food security and other studies of interest to local
partners
Major work plan items 2013-2014

38. Variables Mean
Value of beef Cattle output (Pula per year) 5955
Beef cattle price (Pula) 1993.04
Feed cost (Pula per year) 605.57
Vet. cost (Pula per year) 650.89
Labour Cost (Pula per Month) 237.78
Cost of other inputs (Pula per year) 350.5
Value of fixed capital (Pula) 131779.5
Crop land area (Hectares) 6.19
Family labour (hours per month) 210.34
Results: Descriptive statistics
38

39. Variables Mean
Age of household head (Years) 59.79
Education of Household head (years) 4.95
Household Off farm income (Pula per year) 54815.57
Distance to commonly used market(Km) 39.65
Herd size (Beef cattle equivalent) 23.86
Gender (% female farmers) 22%
Information access (Yes=1, No=2) 76.79%
FMD disease zone (Yes=1, No=2) 42.80%
Crop income (Yes=1, No=2) 50.03%
Results: Descriptive statistics
39

40. Results:Stochastic profit frontier estimates
Variables
OLS MLU
Coeff. t-values Coeff. t-values
Constant -34.87 -26.31 -38.12 -32.49
Ln (Average Beef cattle price) 5.01 28.23 5.51 34.85***
Ln (Feed prices) -0.15 -3.61 -0.13 -3.11***
Ln (Veterinary prices) -0.12 -2.97 -0.09 -2.46**
Ln (Labor prices.) 0.08 0.24 -0.79 -1.93**
Ln (fixed capital) -0.02 -0.64 0.02 0.53
Ln (Family labour Hrs) -0.06 0.28 0.46 1.82*
Ln (Crop land area) 0.55 2.95 0.28 1.70*
sigma-squared 7.87 6.03***
gamma 0.80 11.09***
log likely hood function -1129.60 -1093.43
LR test of the one-sided error 72.32

41. Results: Efficiency drivers
Variables Coefficient t-values
Constant -11.86 -2.47**
Age of household head -1.26 -3.44***
Education of Household head 0.043 0.14
Annual household non-farm income 0.26 2.64***
Distance market (commonly used) 0.56 2.42**
Herd size 2.48 4.92***
Gender (% female farmers) -2.82 -2.43***
Information access (Yes=1, No=0) 4.15 2.80***
FMD disease zone (Yes=1, No=0) -4.56 -3.84***
Crop income (Yes=1, No=0) -2.31 -2.94***

42. • Profit efficiency among farmers
Project outputs 2013-2014
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
HZ1
(Mean=0.58)
HZ2
(Mean=0.54)
HZ3
(Mean=0.48)
Pooled
(Mean=0.57)

43. Feeds work
- Feed assessment in Botswana
• FEAST tool training to about 22 MOA staff
• Feed assessment result will inform the composition of
the diets that will be used at
• Feed trial (pen) – DAR, Exchange visit to Australia
• Feed trial (BMC):
• will look on technical economic efficiency of feedlots
• Include post slaughter performance indicators
• Analysis will be done in cooperation with BMC and
UNE (University of New England
Major work plan items 2014

44. Breeding activity
• Preliminary planning meetings held in Botswana by
Boni (Dec. 2013)
• Some element breed work will go into feed trials
• Boni will communicate specifics in Feb-March
during communications event
• Feed trial (BMC) will have breeding analysis
Major work plan items 2014

45. BIDPA’s deliverables
• Roles for Co-operatives in Enhancing Competitiveness
of Smallholder Livestock in Botswana
• Public and Private Provision of Services to
Smallholders: an examination of Livestock Advisory
Centres
• Regional Trade Opportunities for Botswana’s Livestock
Sector
• Policy Conference
Major work plan items 2014

46. Animal health
• PE survey results
• Refresher training in April
• Disease prevalence (test results) research outputs
Extension work
• Training need assessment
• CICE to lead
Major work plan items 2014

47. • A Survey of Smallholder Livestock Production in Central
District, Botswana Poster presented at 9-11 September,
Kampala, Uganda
• Smallholder market competitiveness for beef production in
Botswana: A quantitative value chain analysis Poster
presented at 9-11 September, Kampala, Uganda
• Measurement of competitiveness in smallholder livestock
systems and emerging policy advocacy: an application to
Botswana (Food policy Journal)
• Determinants of profit efficiency among smallholder beef
producers in Botswana (IFAMA June 16-17, 2014, Cape Town,
South Africa)
Project outputs 2013-2014

48. • Determinants of competitiveness of smallholder beef
producers in Botswana 25-27 June 2014 | Halle (Saale),
Germany
• An analysis of beef market liberalization in Botswana: A
quantitative value chain approach (IFAMA June 16-17, 2014,
Cape Town, South Africa)
Project outputs 2013-2014

49. Thank you!!