International Competitiveness of
Botswana’s beef industry
Tebogo B. Seleka
Pinkie G. Kebakile
Botswana Institute for Development Policy Analysis
Conference on Policies for Competitive Smallholder Livestock Production
Gaborone, Botswana, 4-6 March 2015

Outline
• Introduction
• Measuring international Competitiveness
• Results
- Against SADC countries
- Against leading beef exporters
• Factors underlying Botswana’s beef industry
competitiveness

Introduction
• Beef industry in Botswana plays a key role in the
economy.
- It accounts for a large proportion of agricultural value
added.
- It is the second leading source of export revenue
after minerals.
- It is one of the key sources of livelihood among rural
dwellers – as a source of income and employment
(including self-employment).

• However;
- Its share of agricultural value added has
declined over time.

- Beef exports have declined
0
10,000
20,000
30,000
40,000
50,000
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Year
Quantities(Mt)
0.00
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
RealValues(2006prices)
QTY(Mt)
RealValues

Measuring international competitiveness
• RCA1ij= xij/xnj
• RCA2ij=(xij/xnj)/(xik/xnk)
• RCA3ij=(xij-mij)/(xij+mij)
• NPij=(xij-mij)/pij
• PCij=pij/cij
- RCA=Revealed comparative advantage, x= exports,
m=imports, I= country I, j = beef, k= all agricultural
commodities, n=set of countries (SADC or leading
beef exporters), NP = ratio of net trade to
production, PC=ratio of production to consumption,
p = production, c= consumption.

Results: Botswana more competitive than SADC countries but
its competitiveness has decline over time – RCA2
0
10
20
30
40
50
60
70
80
90
100
Botswana Namibia South Africa Zimbabwe

Ratio of net trade to production
-0.2
0
0.2
0.4
0.6
0.8
1
Botswana Namibia South Africa Zimbabwe

Ratio of production to consumption
0
1
2
3
4
5
6
7
8
9
Botswana Namibia South Africa Zimbabwe

Botswana Compares well with leading beef
exporters by its relative competitiveness has
declined over time: RCA2
0
5
10
15
20
25
30
35
40
Argentina Australia Botswana Namibia New Zealand Uruguay

Ratio of net trade to production
-0.2
0
0.2
0.4
0.6
0.8
1
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Argentina Australia Botswana Namibia
New Zealand Uruguay USA

Ratio of production to consumption
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Argentina Australia Botswana Namibia
New Zealand Uruguay USA

Factors underlying competitiveness: Supply-side
factors – cattle population
70
75
80
85
90
95
100
0
500
1000
1500
2000
2500
3000
3500
Ratioofcommunal(Percent)
Heads(thousands)
Cattle Share of communal

• Poor productivity indicators
- Mortality rates averages 12 percent in communal
system – although they have improved over time
- Off-take rates averaged 8 percent under communal
arrangements
- Calving rates averaged 57 percent and have
stagnated over time.
- Cattle prices declined consistently from 1974 to
2006.
- Disease outbreak (FMD).
- Recurrent drought

Demand-side factors – increasing domestic
demand for beef – Cattle sales for export
slaughter declined from 80 to 40 percent
0
10
20
30
40
50
60
70
80
90
0
50,000
100,000
150,000
200,000
250,000
300,000
ShareofBMC
Headssold
YearTotal BMC

BMC throughput declined two fold from 1984 to
2012
0
50,000
100,000
150,000
200,000
250,000
300,000
Heads
Year

Institutional factors: one channel export
marketing through the BMC a threat to industry
sustainability
-200000
-150000
-100000
-50000
0
50000
100000
150000
200000
250000

• Preference erosion in the EU market due to
future policy reforms.

Conclusions
• Botswana’s beef industry is more competitive
than other SADC countries, but compares well
with leading beef exporters.
• Declining competitiveness levels are due to low
and stagnant productivity.
• Increasing domestic demand for beef in
Botswana, which has resulted in declining
exports.
• Future threats include single channel export
marketing and possible preference erosion in the
EU market.