Grow­ing mar­ket for grass-fed beef of­fers op­por­tu­nity for com­mu­nal farm­ers

Joseph Kau, an agri­cul­tural econ­o­mist at the Agri­cul­tural Re­search Coun­cil, spoke to An­nelie Cole­man about the grass-fed beef move­ment in South Africa and the op­por­tu­ni­ties it presents for com­mu­nal farm­ers, as well as the ob­sta­cles thwart­ing progress.

Farmer's Weekly (South Africa) - - Contents - FW

how did the grass-fed beef move­ment evolve in South Africa?

Grass-fed beef refers to cat­tle that are al­lowed to for­age and graze for their own fresh food. In 2014, the Grass-Fed As­so­ci­a­tion of South Africa [GFSA] was launched in Bloem­fontein. De­spite pre­vi­ous fail­ures by other or­gan­i­sa­tions to get this ini­tia­tive go­ing, the chang­ing so­cio-eco­nomic sit­u­a­tion in South Africa and health­ier life­style choices are con­sid­ered ef­fec­tive driv­ers for the long-term sus­tain­abil­ity of grass-fed beef pro­duc­tion. GFSA largely caters to com­mer­cial farm­ers. New and com­mu­nal beef pro­duc­ers are yet to learn about the ben­e­fits of par­tic­i­pat­ing in this kind of en­ter­prise. Some re­searchers ar­gue that com­mu­nal farm­ing in South Africa can by de­fault be re­garded as or­ganic farm­ing sys­tems as th­ese farm­ers mostly make use of very few, if any, chem­i­cal inputs, and their live­stock of­ten range freely over com­mu­nal graz­ing ar­eas.

There have been ef­forts in the past to mo­bilise com­mu­nal farm­ers to­wards pro­duc­ing cer­ti­fied grass-fed beef. In 1998, for in­stance, the Univer­sity of Fort Hare, in col­lab­o­ra­tion with ru­ral de­vel­op­ment agen­cies in the Eastern Cape, ini­ti­ated a pro­gramme to pro­duce or­ganic beef pro­duc­tion by mak­ing Nguni cat­tle avail­able to com­mu­nal farm­ers. In­ter­ested com­mu­ni­ties are given two bulls and 10 in-calf heifers to en­able them to build up a nu­cleus herd. Registered Nguni bulls are used to re­place all the ex­ist­ing bulls in the com­mu­nity.

Af­ter five years, the com­mu­nity is re­quired to give back to the project two bulls and 10 heifers, which are then passed on to an­other group of re­cip­i­ents. One of the con­di­tions of the project is that com­mu­ni­ties should have fenced graz­ing ar­eas and a range­land man­age­ment com­mit­tee, and must prac­tise ro­ta­tional graz­ing at pre­scribed stock­ing rates. The long-term goal is to de­velop a niche mar­ket for com­mu­nal farm­ers to sup­ply cer­ti­fied or­ganic beef.

How vi­able is grass­fed beef pro­duc­tion for com­mu­nal and emerg­ing farm­ers?

The in­ter­est in grass-fed beef has in­creased ex­po­nen­tially dur­ing the past 20 years. Re­search shows that com­mu­nal farm­ers are al­ready sup­ply­ing large num­bers of grass-fed cat­tle to the in­for­mal mar­ket. Lo­cal cat­tle breeds found among com­mu­nal farm­ers, such as the Nguni, have huge po­ten­tial to pro­duce high-qual­ity beef with vir­tu­ally no chem­i­cal inputs. Pri­vate sales of cat­tle by com­mu­nal farm­ers re­main the most im­por­tant form of cat­tle mar­ket­ing. In a study in­volv­ing 230 com­mu­nal farm­ers in KwaZulu-Natal, which ex­am­ined farm­ers’ choice of cat­tle mar­ket­ing chan­nels, it was dis­cov­ered that pri­vate sales were re­spon­si­ble for 50% of cat­tle traded in the com­mu­nal live­stock farm­ing sec­tor. In the Chris Hani Dis­trict in the Eastern Cape, 85% of farm­ers in­ter­viewed pre­ferred pri­vate sales as a mar­ket­ing chan­nel. This is be­cause in pri­vate sales, farm­ers are able to ne­go­ti­ate for a better sell­ing price, which they can­not do at auc­tions or abat­toirs.

South Africa’s poor track record to suc­cess­fully com­mer­cialise live­stock pro­duc­tion by com­mu­nal farm­ers is cited as one of the reasons the coun­try still im­ports sig­nif­i­cant vol­umes of beef, de­spite the fact that the out­put value of the in­dus­try in­creased from R13 bil­lion in 2006 to R30,6 bil­lion in 2016.

in­ter­est in grass- fed beef has in­creased ex­po­nen­tially

What are the prac­ti­cal­i­ties of in­tro­duc­ing the idea of grass-fed beef to com­mu­nal farm­ers?

Although a typ­i­cal grass-fed en­ter­prise is less cap­i­tal-in­ten­sive than a com­mer­cial beef pro­duc­tion op­er­a­tion, it takes rel­a­tively long to reach a stage where in­come is gen­er­ated.

A cow, for ex­am­ple, is only mar­ketable af­ter two to three years. This, nev­er­the­less, res­onates well with the busi­ness prac­tices of com­mu­nal farm­ers, as

most are oc­ca­sional sellers. What is re­quired is the mo­bil­i­sa­tion of farm­ers into groups to form co-op­er­a­tives, so that they can cre­ate clus­ters and de­velop value chains for sup­ply.

There is also a need for skills trans­fer, ca­pac­ity build­ing and ac­ces­si­bil­ity to mar­ket in­for­ma­tion. Com­mu­nal farm­ers need to gain ex­pe­ri­ence in ne­go­ti­at­ing deals with re­tail­ers and abat­toirs, man­ag­ing and mon­i­tor­ing costs associated with sales, and meet­ing the re­quire­ments set by the in­sti­tu­tional en­vi­ron­ments.

What are the reasons for the slow com­mer­cial­i­sa­tion of com­mu­nal cat­tle farm­ing?

It is be­lieved that com­mu­nal farm­ers keep cat­tle as a liveli­hood se­cu­rity-safety net, with prof­it­mak­ing not nec­es­sar­ily be­ing a ma­jor con­sid­er­a­tion. This calls for an or­gan­i­sa­tion such as GFSA to be in­no­va­tive enough to find a bal­ance be­tween prof­itabil­ity and liveli­hood strate­gies if it wants to tap into the com­mu­nal mar­ket. Other than the model ap­plied by the Univer­sity of Fort Hare, there are op­por­tu­ni­ties for busi­ness mod­els such as share-eq­uity schemes, con­tract­grow­ing and co-op­er­a­tive for­ma­tions to in­clude com­mu­nal cat­tle in the for­mal com­mer­cial cat­tle struc­tures.

Look­ing into is­sues re­gard­ing the en­vi­ron­ment, im­por­tant fac­tors to be con­sid­ered in­clude the types of breed that can be used in a grass-fed en­ter­prise, the veld-car­ry­ing ca­pac­ity and dis­eases. There is over­whelm­ing ev­i­dence that com­mu­nal graz­ing is hugely over­stocked. The is­sue of over­stock­ing and over­graz­ing is a man­age­ment is­sue that re­quires govern­ment in­ter­ven­tion.

Why has the pro­duc­tion OF grass-fed beef from the com­mu­nal and emerg­ing sec­tors not BEEN re­alised yet?

There are con­cerns about the health sta­tus of com­mu­nal cat­tle, but in my opin­ion their health sta­tus is fair, although at­ten­tion should be given to the im­ple­men­ta­tion of biose­cu­rity mea­sures.

Be­cause of the vast ar­eas on which com­mu­nal farm­ers op­er­ate, meet­ing sup­ply quo­tas to re­tail­ers re­mains a chal­lenge. How­ever, ini­tia­tives such as those of the Univer­sity of Fort Hare can over­come some of th­ese.

What would be the best-case sce­nario for grass-fed beef by com­mu­nal farm­ers in 10 years’ time?

The grass-fed ini­tia­tive should be seen as a long-term strat­egy that seeks to ad­dress en­vi­ron­men­tal and so­cial as­pects of the econ­omy. In the best-case sce­nario, suit­able agroe­co­log­i­cal zones, some­thing like beef agri-parks, will be es­tab­lished in South Africa. This should ide­ally be sup­ported by a strong in­sti­tu­tional frame­work com­pris­ing pro­ducer or­gan­i­sa­tions, govern­ment in­sti­tu­tions, NGOs and farmer co-op­er­a­tives at grass­roots level. • Email Joseph Kau at [email protected]

Joseph Kau

An­nelie Cole­man

ABOVE:Skills trans­fer and train­ing are key to suc­cess­ful grass­fed pro­duc­tion by com­mu­nal farm­ers.

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