Last Updated: Thursday, 5 December 2002
Zim embarks on massive restocking exercise
Features Reporters
BEEF prices have soared in recent months owing to the significant drop in the number of cattle available for slaughter and profiteering by butcheries.
The Cold Storage Company and private abattoirs are scrambling for cattle resulting in increased prices for beasts.
Traditionally, during this time of the year farmers are reluctant to sell their beasts because of the availability of grass.
This year the problem has been compounded by the de-stocking throughout the year by white commercial farmers whose land was redistributed to indigenous farmers.
New farmers are starting to buy cattle and are not expected to send many cattle for slaughter this year. Cattle rearing is a long-term business not ideal for farmers looking for quick returns on investments.
Private abattoirs that manage to secure cattle are continuously increasing their prices, forcing butcheries to push up prices as well.
Retailers have increased the price of beef from around $990 a kilogramme to between $1 200 and $2 000 on average.
Abattoirs are, however, still selling super grade beef for $900 a kg, choice beef for $890 a kg, commercial for $850 a kg and economy beef for $650 a kg.
Controlled prices are $375 for a kg of super grade meat, $250 and $275 a kg for choice and commercial meat respectively.
Some butcheries in high-density suburbs are selling low-grade beef at a flat price of $1 200 a kg.
Large retail outlets like TM, OK, Spar, Food Chain supermarkets are, in some of their outlets, selling super grade beef only.
The retail outlets are also now selling high quality beef cuts such as rump brisket, blade and T-bone at prices ranging from $1 750 to $ 2 000 a kg, up from around $1 695 a kg. Fillet is being sold at prices of up to $2 250 a kg at some city butcheries.
The Cold Storage Company (CSC) which has gone for a month without beef, sells super grade meat for $975 a kg, choice for $975 a kg, commercial for $825 a kg and economy for $775 a kg.
"We have gone for a month without beef," said a sales official at the company. "There is no meat now."
The profit margins for butcheries have now come under intense scrutiny. While they are not expected to sell beef at prices below wholesale prices their profit margins have to be reasonable.
At present, some butcheries are putting over 100 percent mark up. Butchery owners gave various reasons to justify the increases.
"Prices are going up for other things, so we have to do like wise," said a city butchery owner. "Abattoirs have not hiked the price of beef but overheads for us have gone up. So we have to make up for this."
Other butchery owners cited transport costs and the need to make a good return on their purchases.
"When inflation is low its reasonable to make a mark-up of say 8 or 10 percent," said one butchery owner in Mabvuku. "But when it’s high as it is now, you have to increase accordingly, otherwise you will not be able to purchase more goods."
However, consumers say there is no reasonable justification for butcheries to hike the price of beef.
They accuse the business sector of speculative pricing, profiteering and being generally greedy when it comes to pricing.
Consumers also condemned the business sector for believing that price increases were the only panacea to viability problems.
"We know things are tough in the business world," said Mrs Jane Matare of Greendale. "But the situation does not warrant regular and unjustified increases."
Private abattoirs dominating the beef industry increased beef prices for all grades by 15 percent in March 2001. By then, the wholesale prices for economy beef rose to $66 a kg from $57 while commercial beef price went up to $80 a kg from $68.
At the time, retailers paid $110 a kg up from $95 and up to $120 a kg for super and choice beef grades.
It was common for butcheries to increase prices by around $45 for economy and commercial grades and for up to $55 for super and choice grades.
A year later, greed and speculative motives have crept into the whole pricing system pushing prices of beef to unimaginable and unjustified levels.
"It’s the ‘everything-is-going-up syndrome’ which is driving us to charge unrealistic prices," said Mrs Matare. "It’s pure greed and sheer drive for profiteering."
Last year, a retailer would put up a margin of $45 for lower grades and $55 for high quality beef grades. Presently, butcheries are putting margins of between $400 and $1 000 a kg for both low and high quality beef grades.
The Government was forced to impose a price freeze on a whole range of products and services to protect consumers from profiteering by manufacturers and distributors.
The price of the listed goods and services cannot be increased for the next six months.
"Butchery owners are charging whatever they feel like," said Mrs Joana Muregerera of Mufakose. "They adjust prices everyday and it’s now difficult to budget or plan."
However, beef prices will stabilise as efforts are being made to rebuild the national herd.
The Livestock Development Trust (LDT) is at the forefront of the rebuilding efforts. It has so far distributed at least 15 000 beasts to about 8 000 new farmers.
Zimbabwe’s national herd was depleted following the 1992 drought, the worst in living memory, which reduced the number of cattle to about five million.
At least 1,6 million livestock died during the 1992 drought.
The national herd is estimated to be 5,7 million with an asset value of $60 billion. Of the 5,7 million cattle, 4,5 million is found in the communal and resettlement areas while the remaining 1,2 million is in the commercial farming sector.
The Government this year allocated $450 million to the trust that was established last year to assist new farmers to get livestock on credit.
Under the programme, farmers who require livestock apply to the trust stating the type and number of cattle they require.
The trust would then either allocate the cattle or ask the farmers to look for the cattle themselves for which the trust would pay.
The scheme also includes a number of other programmes, such as cows supplementation and artificial insemination.
The massive national herd restocking investment exercise has resulted in the empowerment of the resettled farmers as they now have access to loans they could not get before because of the collateral demanded by financial institutions.
This empowerment policy is also being developed to promote livestock production for the lucrative multi-billion dollar beef industry, which is a foreign currency earner.
Zimbabwe and Libya recently signed a deal that would see the former supplying the latter with a quota of 5 000 tonnes of beef per year.
A proposal has been made that 50 percent of that quota should come from the communal areas.
LDT senior administrative officer, Mr Forbes Muvirimi, said farmers had already dried up the $450 million allocated by the Government because of the overwhelming response.
Initially, he said, the beneficiaries were allocated a maximum of 15 herd of cattle per individual farmer but this had to be revised downwards following the popularity of the programme.
"We are waiting for additional funds from the Government to expand the programme since the farmers are raring to go," Mr Muvirimi said.
At least more than $1 billion was needed to successfully rebuild the national herd over the next three years. The trust was facing several challenges in its efforts to assist the new farmers to secure livestock on credit.
"Some farmers have no adequate knowledge about the type of cattle suitable for their areas while the other challenge is the shortage of quality bulls which are essential for the breeding programme," Mr Muvirimi said.
Some of the cattle distributed to the farmers, he said, were also dying of diseases such as heart water.
Zimbabwe Farmers Union director Mr Sylvester Tsikisayi said the number of farmers who had benefited from the trust’s livestock input scheme was a drop in the ocean.
"There is need for the Government to allocate more resources to the restocking exercise in order for more farmers to benefit from the scheme," he said.
Mr Tsikisayi said some of the cattle distributed to the farmers were dying of diseases because of the shortage of dipping chemicals.
He called for closer co-operation among the ZFU, LDT and the Department of Veterinary Services in order for the restocking exercise to be a success.
The ZFU, Mr Tsikisayi said, had put in place an insurance scheme for farmers to ensure that those who lost their cattle through genuine reasons would be compensated.
The Government’s efforts of restocking the national herd have been boosted by the support of other organisations like the Indigenous Commercial Farmers Union (ICFU) and World Vision International.
ICFU president Mr Davison Mugabe recently said the union was seeking to raise up to $500 million for the establishment of a "cattle bank" that would guarantee the future of the beef industry.
He said a number of white commercial farmers whose farms had been designated had slaughtered their cattle in order to sabotage efforts to restock the national herd.
The de-stocking exercise was taking place despite a policy put in place by the Government early this year of protecting the slaughter of female beasts.
This followed reports that the country’s total herd of breeding cattle had gone down drastically from an estimated one million to about 400 000.
The plans to set up a cattle bank, Mr Mugabe said, had reached an advanced stage and ICFU members would be expected to contribute a minimum of two heads of cattle each for breeding under the scheme.
On the other hand, World Vision International was complementing the Government’s efforts of restocking the national herd through the Area Development Programme (ADP) which was initiated in 1996.
The donor agency in July this year distributed more than 100 heifers and 12 bulls to villagers in Mudzi in Mashonaland East province.
The beasts, bought at a cost of more than $3,7 million, would go a long way in empowering the villagers.
Beneficiaries of the ADP would pay half the costs of the beasts, a move that would ensure that the recipients utilise the cattle properly as well as promote good management
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"Ivinicus factus sum veritabem diceus." ( I have become an enemy for speaking the truth ) St Paul!
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Mitayo Potosi
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