Botswana CDE and ITC partnership project on value chains

1 Botswana CDE and ITC partnership project on value chains Beef value chain findings, strategy and proposed interventions October 2014. PEER REVIEW DRAFT ITC Team Pablo Lo Moro Subhrendu Chatterji Agapitos Hatzipetros Stephen Ghanie Christopher Tsopito Contents LIST OF FIGURES .. i LIST OF TABLES .. i ABBREVIATIONS AND ACRONYMS .. ii EXECUTIVE SUMMARY .. i v 1. INTRODUCTION AND APPROACH .. 1 INTRODUCTION TO THE REPORT .. 1 BEEF SECTOR RECOMMENDATIONS IN CONTEXT .. 1 VCAD APPROACH AND REPORT STRUCTURE .. 2 2. THE BEEF SECTOR AND ITS EXPORTS IN THE GLOBAL CONTEXT .. 3 BACKGROUND TO THE BEEF SECTOR IN Botswana .

2 3 GLOBAL BEEF PRODUCTION AND TRENDS .. 4 EVOLUTION OF BEEF PRODUCTION IN Botswana .. 5 GLOBAL EXPORT AND IMPORT MARKETS IN FRESH, CHILLED AND FROZEN BEEF .. 7 Botswana 'S BEEF EXPORTS .. 10 IMPLICATIONS FOR THE BEEF value CHAIN .. 12 3. THE BEEF value CHAIN .. 13 INTRODUCTION .. 13 BEEF value CHAIN MAP .. 13 PRODUCTION .. 15 PROCESSING .. 22 MARKETING AND DISTRIBUTION .. 24 OTHER INPUTS .. 26 4. SUPPORT INSTITUTIONS IN THE BEEF SECTOR .. 29 INTRODUCTION .. 29 PUBLIC TRADE SUPPORT INSTITUTIONS .. 29 VETERINARY SERVICES .. 29 LIVESTOCK IDENTIFICATION AND TRACE BACK SYSTEM .. 33 QUALITY CONTROL AND MANAGEMENT SYSTEMS.

3 34 TRADE ASSOCIATIONS .. 35 LIVESTOCK advisory CENTERS .. 36 TRANSPORT .. 36 RESEARCH AND DEVELOPMENT .. 37 TRAINING .. 37 FINANCE AND INSURANCE .. 38 5. GOVERNMENT POLICIES RELATING TO THE BEEF SECTOR .. 39 INTRODUCTION .. 39 LAWS AND REGULATIONS AFFECTING THE SECTOR .. 39 POLICY FRAMEWORK .. 40 OTHER CORE SUPPORT POLICIES AND INITIATIVES .. 42 PROFESSOR MICHAEL PORTER'S RECOMMENDATIONS .. 44 TRADE POLICY RELATING TO THE BEEF SECTOR .. 44 6. COMPETITIVE CONSTRAINTS .. 45 INTRODUCTION .. 45 BORDER IN GEAR: SUPPLY SIDE CONSTRAINTS .. 46 BORDER GEAR: QUALITY OF BUSINESS ENVIRONMENT ISSUES.

4 49 BORDER OUT GEAR: MARKET ENTRY CONSTRAINTS .. 53 SOCIAL DEVELOPMENT GEAR .. 55 7. BEEF SECTOR EXPORT MARKET DEVELOPMENT AND value OPTIONS .. 58 INTRODUCTION .. 58 MARKET DEVELOPMENT OPTIONS .. 58 value OPTIONS .. 61 8. PROPOSED STRATEGY .. 63 INTRODUCTION .. 63 SWOT ANALYSIS .. 63 STRATEGIC VISION FOR EXPORT MARKETS .. 64 STRATEGIC OBJECTIVES .. 65 9. STRATEGIC ROADMAP FOR THE BEEF SECTOR .. 68 INTRODUCTION .. 68 FURTHER ENHANCING DVS PERFORMANCE .. 68 FINDING COORDINATED SOLUTIONS FOR FMD RELATED ISSUES .. 70 REPOSITIONING Botswana BEEF AND STRENGTEHING BMC EXPORT CAPACITY .. 72 STRENGTHENING COMMUNAL FARMING.

5 74 .. 76 FURTHER REFORMING BMC AND LIFTING EXPORT MONOPOLY .. 77 IMPROVING THE SECTOR'S SUPPORT NETWORK .. 79 IMPROVING REGIONAL COOPERATION .. 82 10. PRIORITY project IDEAS FOR PSDP .. 84 INTRODUCTION .. 84 STRENGTHENING COMMUNAL FARMING PRACTICES .. 85 IMPROVING DVS SERVICE DELIVERY .. 87 BRANDING OF Botswana BEEF AND DEVELOPING EXPORT CAPACITY AT BMC .. 90 INCREASING THE EFFECTIVENESS OF BEEF PRODUCER ASSOCIATIONS .. 90 BIBLIOGRAPHY .. 91 ANNEX I: PROPOSED PROJECTS FOR PSDP OR PARTNER SUPPORT .. 92 ANNEX II: LIST OF MEETINGS AND INTERVIEWS .. 130 LIST OF FIGURES Figure 1: VCAD approach and report structure.

6 2 Figure 2: World top beef producers .. 4 Figure 3: Trends in production of main meat 5 Figure 4: Trend in world beef export prices .. 9 Figure 5: Share of beef in Botswana 's exports .. 10 Figure 6: Trends in Botswana 's beef exports .. 10 Figure 7: Major beef export destinations .. 11 Figure 8: The beef value chain .. 14 Figure 9: Botswana cattle population trends .. 15 Figure 10: Geographic distribution of cattle .. 16 Figure 11: Cattle distribution by holding .. 17 Figure 12: Cattle sales by type of buyer .. 19 Figure 13: Average prices realized by traditional and commercial producers.

7 20 Figure 14: Traditional and commercial farm cattle performance .. 21 Figure 15: BMC domestic vs export sales and prices .. 26 Figure 16: DVS Organizational structure .. 30 Figure 17: Veterinary control zones .. 31 Figure 18: Trend in measles infection in cattle .. 32 Figure 19: Geographic distribution of Livestock advisory Centers .. 36 Figure 20: The four gears of export competitiveness .. 45 Figure 21: Gender distribution of traditional cattle holdings .. 57 Figure 22: Outline of proposed PSDP interventions in the beef value chain .. 84 Figure 23: Structure of proposed communal farming pilots projects.

8 85 Figure 24: Components of proposed DVS project .. 87 LIST OF TABLES Table 1: Top 10 global fresh, chilled and frozen beef exporters .. 7 Table 2: Top 10 global fresh, chilled and frozen beef importers .. 8 Table 3: Model of performance potential in cattle production .. 21 i | P a g e ABBREVIATIONS AND ACRONYMS BCA Botswana College of Agriculture ITC International Trade Center BCPA Botswana Cattle Producers Association LAC Livestock advisory Center BEAC Business and Economic advisory LIMID Livestock Management and Infrastructure Council Development Program BITC Botswana Investment and Trade LITS Livestock Identification and Trace back Centre System BMC Botswana Meat Commission LMIA The Livestock and Meat Industries Act 2006.

9 BMTPA Botswana Meat Traders and MIS Management information systems Processors Association BNBPU Botswana National Beef Producers MITI Meat Inspection Training Institute Union BNVL Botswana National Veterinary MOA Ministry of Agriculture Laboratory BOBS Botswana Bureau of Standards MOFAIC Ministry of Foreign Affairs and International Cooperation BOCCIM Botswana Confederation of MOH Ministry of Health Commerce, Industry and Manpower BVI Botswana Vaccine Institute MOLH Ministry of Lands and Housing CAGR compounded annual growth rate MTI Ministry of Trade and Industry CBT Commodity Based Trading NDB National Development Bank CCARDESA Centre for Coordination of Agricultural NDP National Development Plan Research & Development for Southern Africa CDE Center for the Development of NFTRC National Food Technology Research Centre Enterprise CDM Cold dress mass NSO National Strategy Office CEDA Citizen Entrepreneurial Development OIE World Organization for Animal Health Agency CPA Cattle post area

10 Farmers PPP Private Public partnership farmers CWE Carcass Weight Equivalent PRINT SADC Promotion of Regional Integration project DABP Department of Agricultural Business PSDP Private Sector Development Programme Promotion, MOA DAP Department of Animal Production, RFID Radio Frequency Identification MOA DAR Department of Agricultural Research, SACU Southern African Customs Union MOA DVS Department of Veterinary Services, SADC Southern African Development Community MOA EDD Economic Diversification Drive SADCAS Southern African Development Community Accreditation Service EPP Export parity price SANAS South African National Accreditation System ES Extension services SDVO Sub District Veterinary Office EU European Union SMME Small, micro and medium sized enterprise FAO Food and Agricultural Organization SWOT Analysis of strengths, weaknesses.