Lifting of ban on movement of cattle is ‘great news for the industry, consumers and the SA economy’

THE DECISION by the Department of Agriculture, Land Reform and Rural Development Minister Thoko Didiza yesterday to lift the countrywide ban on the movement of cattle was “great news for the industry, consumers and the South African economy”.

This was the view of Abrie Rautenbach, the head of AgriBusiness and Relationship Banking at Absa, as well as other industry leaders who welcomed the move.

The ban was imposed to help curb the spread of foot and mouth disease (FMD) in the country. Cattle are now allowed to be moved in all but three areas, KwaZulu-Natal, Limpopo and Free State which remain selectively restricted for now.

Rautenbach said: “It is expected to have a positive impact on employment while also benefiting the logistics and grain industry. It is important for the red meat industry to be able to export and to be FMD-free.

“While this does not equate to FMD-free status, it is a step in the right direction. The optimal functioning of value chains is in the interest of all parties,” Rautenbach said.”

Any constraint in a supply chain created risk for value chain participants as well as enablers.

He said the ban effectively stopped certain producers from selling cattle and weaners and thus had a negative economic and financial impact on the industry and consumers. The result was that some producers could not keep to their financial commitments.

He said for consumers, the theory of supply and demand applied as breaking or blocking a part of the value chain meant that supply becomes constrained, resulting in an increase in meat prices in the short-term or creating inconsistencies in the prices of meat, thereby creating price risk for the consumer.

“The timing of the lifting of the ban is important. Given the cycle in the red meat industry, lifting the ban now ensured that there would be consistent supply of meat during the upcoming festive season (December/ January). A shortage in supply would increase prices for consumers,” Rautenbach said.

John Hudson, the national agriculture head at Nedbank Commercial Banking, said: “This is good news as an extended ban was always going to put additional pressure on the livestock sector and related value chain actors.” However, he cautioned that the underlying disease risk was still in play and a robust biosecurity strategy was required to manage the risk going forward.

“It’s unlikely we will eradicate diseases such as foot-and-mouth and others such as African swine fever, but we need to manage the risk to try and avoid having to go the blanket ban route in future,” Hudson said. South Africa would now start seeing a flow of animals into the value chain. However, Hudson said the ban would have resulted in an imbalance in supply on to the market, and given the lag, this was expected to be in December.

With the ban lifted, a sense of normality would return and hopefully the country could smooth the supply concerns and ensure an adequate supply of beef over the festive season.

“The good news for consumers and the supply of beef on to the market will now normalise,” he said.

However, Daneel Rossouw, the functional head of agriculture, Nedbank Commercial Banking, said the government’s initial ban was a shortterm solution. He explained that a long-term plan was needed. “A big problem is there is not sufficient funding from National Treasury to the veterinary authority to tackle these outbreaks. Political support is needed.

“A big percentage of livestock production comes from small-scale rural farmers, that might not be aware of their role and responsibility in terms of biosecurity,” Rossouw said.