Have middlemen been bleeding the goat value chain?

Judith Phiri, Features Reporter

Known for being brokers, go-betweens, or intermediaries to a process or transaction, middlemen earn a fee or commission in return for services rendered in matching buyers and sellers. However, the question that remains a mystery is; Are middlemen beneficial to farmers or are they just opportunists?

Since time immemorial, the relationship between the farmer and middleman has been viewed as strained, as the average farmer views the middleman as an opportunist, and the middleman’s integrity is questioned as some may conclude that they cheat and are exploitative.

In 2019, the Value Chain Alliance for Livestock Upgrading and Empowerment (VALUE) project was launched and undertook a scoping study to understand the goat value chain system enablers and constraints for small and medium-scale producers. The scoping study findings confirmed and unearthed system-level dynamics and constraints that include local goat auctions and middlemen not significantly improving income for farmers.

Traditionally, farmers used to sell their goats at their farm gates to middlemen or private buyers. The animals would be sold without weighing or grading and due to monopolistic tendencies of the buyers being mostly middlemen, the farmers were mere price takers with very low negotiating power.

VALUE project team leader, Mr Newton Chari said studies show that goat farmers would suffer the most as middlemen paid them less.

“Farmers had a very limited role in supplying goat meat directly to end market consumers. Brokering was mainly done by middlemen and private abattoirs. There was low-capacity utilisation of local goat abattoirs such as Mvutcha, Umguza and Bulawayo which were operating at 30 percent, 10 percent and 15 percent respectively. Local goat auctions and middlemen did not significantly improve income for farmers. In their individual capacities, farmers were failing to meet quantity requirements for retailers and wholesalers which stood at a weekly demand of 4 180 kilogrammes (kgs) for super grade, 5 525kgs for choice and 9 797kgs for standard goat meat totalling 19 502kgs for the 528 profiled butcheries in Harare and Bulawayo.”

Mr Chari said in terms of governance of the value chain, focusing on the shared value, the distribution was as follows; farmers 14 percent, abattoirs 14 percent, wholesalers 17 percent, with brokers/middlemen enjoying the greater share of 55 percent.

In monetary terms, Mr Chari said this meant that for every US$1 generated, the farmers received a paltry US$0.14, abattoirs US$0.14, wholesalers US$0.17, with brokers/ middlemen enjoying the lion’s share of the market earnings US$0.55.

“To address these challenges, the project introduced the Direct Meat Marketing (DMM) approach which in summary entailed that Goat Producers Business Associations (GPBAs)-[farmer groupings formed by the project in 12 districts] would employ a business secretariat which was named the Business Management Units (BMU) to drive the business of the associations while members of the associations focused more on production and political issues in the value chains.”

He said the GPBA would mobilise farmers who were ready to take goats to the markets and this would be followed with aggregation and tagging of goats prior to transportation to Harare and Bulawayo, which were identified as major consumer markets for at least 60 percent of all goats produced in Zimbabwe. 

Mr Chari said once aggregation and tagging are complete, the BMU secures the Movement Permits and Police Clearance. The GPBAs transportation to major consumer markets would be organised and goats arrive at an abattoir in either Harare or Bulawayo for slaughter at an agreed slaughter fee of between US$3 to US$5.

“Butchery operators and retailers then come and buy goats from the farmers directly at wholesale price of between US$3 to US$4, for their retail which ranges from US$4.50 to US$12 depending on the location and markets. Since the inception of the DMM approach, a total of 4 453 goats from 1 193 farmers produced a total CDM of 56 tonnes which was sold to 64 butcheries in Harare and Bulawayo urban markets generating US$18 9024.”

Mr Chari said goat meat supply remains lower than the market demand which stood at 19 502kgs for the 528 profiled butcheries in Harare and Bulawayo, while with the growing interest in the DMM approach, they hope to see the supply increasing.

He said they were conducting a full study to ascertain the new shared value in the goat value chain and from preliminary assessments, there is an increase in farmers’ profit margins with between 30 to 45 percent as compared to the farm gate sales.

 “The farmers participating in DMM have improved their production practices such as goat nutrition and health based on the market feedback. There are still gaps in the policy framework governing the goat value chain. Combined efforts by government and private sector to establish a formalised goat marketing infrastructure will undoubtedly grow the value chain.”

Bambanani Nkayi Goat Improvement Centre’s business development officer (BDO), Ms Tongai Muhla said their association has assisted goat farmers in many ways.

“Through the GPBA created here in Nkayi District, we have 35 women and 19 men who are beneficiaries. This initiative has been very educative to farmers in the community of those who are members of the association and non-members. Farmers have taken goat farming as a commercial initiative and are generating income for their families.”

Binga GPBA chairperson, Mr Robson Mumpande said that formed in 2021, their association now has 123 paid-up members, with 27 male, 80 females and 16 youths.

“Before the introduction of Direct Meat Marketing, the price ranged between US$15 to US$25 for a goat locally. Through the DMM approach, farmers now manage to sell their goats at a much better price. Recently, the highest price fetched by a farmer for a single goat was US$102, weighing 34 kg CDM. The introduction of the DMM approach has changed the mind set of farmers towards goats. They are now viewing the livestock as a source of income and employment,” said Mr Mumpande.

He said the initiative has unlocked a new highly attractive market and unlike in the past, farmers are now rearing goats for business. Mr Mumpande said their association has so far taken seven consignments to the market through DMM. A total of 491 goats have been sold bringing the total CDM to 5 783.61kgs.

Some of the challenges they are faced with include high transport costs due to distance, increased police clearance costs, and disease outbreaks such as foot and mouth which can stop the movement of livestock.

In Mashonaland Central Province, Mbire GPBA’s BDO, Mr Joe Masate said their association located 240 km northwest of Harare, had 400 youths, men and women registered as members.

“With the assistance we got from the ZAGP VALUE team, we can now sell our goats directly to the butcheries surrounding Harare through a system called DMM which has benefited us as farmers. We have eliminated the middlemen who were buying from us at low farm gate prices of US$15 per goat. Through the DMM approach, a goat can fetch a net of US$30 after costs. You can see that there is a significant change.”

Mr Masate said so far, they have supplied 700 goats to butcheries around Harare, while farmers ensured their goats are inspected and graded to produce good quality meat that suits their client’s preferences.

Rushinga GPBA’s BDO, Mr Regis Kasako said the VALUE project has educated farmers in different aspects of goat production.

“Goat farmers were not used to vaccinating goats against diseases such as Pulpy kidney which is a deadly disease for goats.  But now goats are being vaccinated and this has reduced the mortality rate and the goat population has doubled. At the goat improvements centre, farmers have also been taught how to grow fodder crops suitable for goat feed. Most have adopted the system and have begun to make their stock feeds using the available crops and feed materials from the forest.  This has in turn reduced the cost of production which was a most worrying issue to them,” he said.

The VALUE project, which is part of an EU-funded Zimbabwe Agricultural Growth Programme (ZAGP), came about as a response to the challenges within the country’s livestock sector. The project sought to transform and promote the goat and pork value chains in Zimbabwe. It was implemented in 20 districts (12 for the goat value chain and eight for the pork value chain) from six provinces namely Manicaland, Matabeleland South, Matabeleland North, Mashonaland Central, Mashonaland East and Mashonaland West.