201005250156280.Lusaka cattle presentation 23 March

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What Would it Take for
Zambia’s Cattle Industry to
Achieve its Potential?
Sunil Sinha
Prepared for the Job, Prosperity and Competitiveness Project
Supported by the World Bank, African Development Bank, and DFID
1
Huge Potential of Cattle
2
Substantial Grazing Land, Good
Conditions
•
4 times more grazing than arable land
•
3 agricultural zones suited to livestock
•
If Zambia = Kenya : additional asset value of US$4.5 billion.
Grazing Area
90
80
70
60
50
Grazing area
40
30
20
10
0
Zambia
Botswana
RSA
Zimbabwe
Kenya
Domestic Market: Potential for Fast Growth
•
Consumption of beef and dairy products rises fast when incomes increase.
•
Zambians consume very little beef and dairy products.
Meat & Milk Consumption Per Capita
Beef (Kg/C)
Milk (Ltr/C)
82.3
75.8
54.1
19.24
18.48
12.32
Botswana
South Africa
Kenya
17.1
8.96
Zimbabwe
6.03 7.4
Zambia
4
Zambia could export more beef & Dairy
products to neighbours
• Namibia and Botswana supply beef to RSA and export to Europe.
RSA is a net importer. Exports to DRC, Angola.
Beef main exporters
US$ ‘000
Botswana
111,207
23,665
RSA
10,557
727
Namibia
38,487
Beef main
importers (2007)
US$ ‘000
RSA
Zimbabwe
• Botswana, RSA, Tanzania, Malawi import dairy products.
Milk main
importers (2007)
US$ ‘000
Milk main
exporters (2007)
US$ ‘000
Botswana
15,242
RSA
2,223
RSA
6,823
885
Angola
5,387
Zimbabwe
Tanzania
1,611
Kenya
778
5
International Markets Huge & Very
Competitive
• World Beef and Dairy Trade = $50 billion+.
• Slow growth, Prices falling in real terms.
6
Cattle: Key To Reducing Rural Poverty
• Livestock owned by most rural households
• Higher proportion of household incomes than
crops (c 40%).
• Cattle industry: 310,000 (c 25%) of households
• Cattle is the largest asset (US$1-1.5 billion)
Million
heads
Cattle
Sheep
Goats
Pigs
Poultry
3.1
0.485
0.746
0.704
9.9
Under Performing, Uncompetitive
8
Small Cattle Population, Concentrated In 4
Provinces.
Cattle/grazing ha
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Zambia
Zambia
potential
RSA
Botswana
Zimbabwe
Kenya
9
Underperforming In Beef & Dairy
Country Comparison: Beef & Milk
Beef Production (000'T)
Raw Milk (000'T)
3672
3,000
805
58
Zambia
65
31
RSA
106
Botswana
250
390
97
Zimbabwe
Kenya
• Production is not much higher than1990, negligible exports...
10
Currently, Not Competitive In Beef
Zambia
Kenya
Namibia
RSA
Argentina
Brazil
UK
USA
Live
weight
(US$/kg)
1.29
1.11
1.19
1.57
1.26
0.99
2.26
1.98
Dressed
weight
(US$/kg)
3.69
2.16
2.13
2.8
2.7
2.04
4.19
3.81
Source: FAOSTAT, year 2007, Zambia figure: consultants’ calculation
Competitive in live weight, not in dressed weight.
11
Nor In Dairy
Farm Gate Producer’s Price, US$/Litre
2008
2009
Zambia
0.68
0.6
South Africa
0.4
0.4
Kenya
0.2
0.3
Source: FAOSTAT, Heifer International, Zambia figure: consultants’ calculation
Cost of raw milk is high because of scarcity, still importing powder to
reconstitute as milk.
12
Why Not Fulfilling Its Potential?
Small Market, But Now Growing





Incomes low outside formal employment
Prices: higher than neighbours,
10% of food expenditure
But market for beef now growing 5%-7%,
Dairy c. 10% p.a. But constraint in Lusaka.
 Driven by:



higher urban incomes, urbanisation
changing lifestyles,
changing food consumption patterns
14
3 Systems: Motives, Opportunities &
Constraints
Cattle Population (000)
Farmer Type
450
Traditional
Emergent
Commercial
Calving rate
30%-50%
in-btn
70%-80%
Calving mortality
30%-40%
in-btn
1%-2%
Adult deaths
5%-10%
Lower
Lowest
Off-take rates
8%-9%
10%-15%
17%-18%
Live Weight
200-250
250
300
Milk yields
1-2 ltrs
8-10 ltrs
17-23 ltrs
Low growth
Dynamic
Dynamic
165
2,455
Traditional
Emergent
Commercial
Characteristic
15
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