The main Masvingo based abbatoirs, notably Montana and Carswell, but also some butcheries employ buyers scattered across rural areas, working under area coordinators. When the buyer has sufficient animals in an area, they will call the abbatoir who will send a truck. Usually around 35 animals are required for a trip. Cash is then paid on receipt on the basis of estimated weights. No money is paid for the ‘fifth quarter’ (head, feet, offal etc.), and the transport is presented as ‘free’. For producers unable to trek their animals to an abbatoir (essentially Masvingo or Chiredzi) and pay for feed, transport and so on, this arrangement works well. Prices are not the highest, and some complain that weight estimates are not accurate, but this is one way of getting a reasonable deal. For more immediate sales, however, especially in times of urgency, for example if funeral costs have to be covered, other options may have to looked for, including selling to individual buyers and at council auctions.
Mr Z is an individual cattle buyer based in Chikombedzi. He has a number of businesses including a general store, but in recent years he has taken up cattle buying across the area. He complains that this is not so profitable now. He cites several reasons. Buying from council sales pens has, he complains, has become prohibitive because of the levies they charge. “This is now 10.5% on the sale price of every beast. For nothing!”, he exclaims. He now prefers to buy from individuals, but this means moving door to door and so transport becomes a significant costs. Also, disease outbreaks in an area can wipe out business at stroke as all movement is prevented by the veterinary department. This happened recently with foot-and-mouth disease. This, he explains, is a common disease, with regular outbreaks, but it affects trade, but not the cattle as they are used to it. He used to sell on to large companies like Montana or Bulawayo Grills, but he says they don’t offer good prices, and rip off the cattle buyer. He prefers to transport animals to Chiredzi himself and sell to butcheries directly. Finally he says he has to pay fees to Chiredzi district council every few months to have a licence to buy. “What do they give me in return?” he asks.
Mr V has been a buyer in the area for years. He used to have a farm, but this was taken in land reform. Now he concentrates on cattle buying. He used to attend the public auctions, but because of fees and attempts by officials to extract bribes he only goes along to watch, and check out the prices. Instead he creates his own buying points and alerts people in the area through his contacts, usually village headmen, who he all knows. He has points all over the Chikombedzi and Sengwe area. Mr V employs someone to weigh animals using a belt, and he pays on account, paying farmers once the animal is sold on. He prefers this as he does not want to have thousands of dollars on him on buying day. Since he is able to avoid the council levy his prices are reasonable, and he is well trusted in the area. He involves the police and veterinary department too, and picks them up and feeds them on a buying day. If someone refuses his price, he says” Go and sell at the formal market where the council takes a big cut, and see what the price is there!”. He employs drovers to move cattle from the buying point to an abbatoir or to a holding place which he may rent. Drovers are usually paid $5 per day, for trekking cattle over 10km or so. For longer distances he uses trucks.
Despite the proliferation of informal marketing, the council auctions still go ahead. In Chikombedzi they are a big event, attracting many others selling all sorts of wares at the market. When an animal is sold at the market, a fee is levied, but also the owner must present his/her stock card to have the sale registered by the police and the veterinary department. Both charge fees, around $2 and $10 respectively. However, very often, informal arrangements are struck. Bribes are sometimes paid to avoid registration and permits, and buyers and sellers can informally agree to settle outside the formal auction to avoid the council levy. The council official can be paid off too, and no receipts are logged.
While there is some competition in the cattle market, the levy system on council run auctions and the (semi)illegal nature of other sales operations means that overall sales levels are depressed, and producers and consumers do not necessarily get the best deal. A recent USAID study showed how changing the levy system could result in a massive boost of supply through formal networks, according to an economic model. But it is not just the costs of formal marketing. Lack of market knowledge is another issue, as farmers do not necessarily know the real price of an animal, as auctions are rare, and not competitive. Sometimes distress sales mean that much lower prices are gained, as animals are sold on at knock-down prices just to get the cash.
Market engagement needs more active organisation on the part of producers. As the manager of a leading abbatoir in Masvingo put it: “Rural people need to get together. If they could get together 200 to 300 cattle at one point, they could get really worthwhile prices”. As small herds scattered across the rural areas are now the main suppliers of beef nationally, new ways of organising marketing are needed. The high tax formal system is clearly not effective, and private buying may be undermining producer prices through lack of competition. If Zimbabwe’s meat eaters are to continue to get good, cheap meat, a rethink is clearly required.
For more on wider debates about trade, see the discussion in the comments section on the Retail Revolutions blog in this series.Post published in: News