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The country’s liberal import policy on processed grains has led to the low availability of by-products, which is one of the key challenges to value addition in the livestock sector, a senior livestock specialist has said. Dr Chris Sukume, a livestock specialist with the Livestock and Meat Advisory Council, says the importation of maize meal and wheat flour has led to low availability of by-products such as wheat and maize bran.
As a result, the by-products, are being imported at high prices.
President Mugabe proposed a 10-Point plan which will be used to stimulate economic growth and create employment opportunities. The plan will be anchored on the agriculture sector and on value addition and beneficiation of agricultural and mining resources.
According to Dr Sukume, the current low local production of grains, soyabean and cotton means that the country has largely been dependent on costly imports to support growth.
“Feed is a key input in the livestock sector. The liberal import policy and the low production of grains is a key challenge to value addition,” Dr Sukume said.
Dr Sukume says the livestock sector has been burdened by a multitude of fees and levies across the whole value chain-making.
This makes the value-added products from the sector non-competitive.
Live cattle sales are subject to rural district council levies which are currently pegged at 10,5 percent, or equivalent to $52,50 per $500 worth animal. A number of Rural District Councils in Zimbabwe charge abattoirs $10 per beast as levy for slaughter, a charge abattoirs say is high and increases production costs.
According to Dr Sukume, abattoirs are also subject to high inspection and affluent discharge fees.
During processing, key imported raw materials such as mechanically deboned meat derived from poultry attract a duty of 40 percent.
Among some of the challenges affecting the value addition of livestock is the competition from cheap illegal imports.
In 2014, the market was flooded by cheap imports mainly from South Africa and Brazil, discouraging investment in value-addition in the process. All meat sub-sectors including poultry, beef and pork were also affected.
Dr Sukume says one of the key challenges that is affecting the livestock industry is the liquidity crunch.
“The current depressed economic activities in the country accompanied by loss of employment and hence disposal income, have kept demand for livestock products very low, which has acted as a dis-incentive to investment,” Dr Sukume said.
Information gathered from the Ministry of Agriculture, Mechanisation and Irrigation Development states that in 1996, Zimbabwe slaughtered 780 000 cattle out of a total herd of 5,9 million. The country is currently slaughtering around 200 000 out of 5,3 million as low prices discourages farmers from selling their cattle.
The Abattoirs Association of Zimbabwe says the liquidity crisis has forced some abattoirs to reduce production to below 50 percent.
In the end, producers are forced to opt for other ways of slaughtering their beast rather than bringing them to abattoirs, hence loss of business. Efforts by Government to encourage value addition in this sector are failing to get the required results.
In 2014, Government introduced a levy on exports of raw hides in an effort to encourage beneficiation. The levy was expected to boost value addition in the leather industry as well as to discourage the exportation of raw hides by local abattoirs.
The introduction of the levy, however, had negative effects on the sector, leading to some tanneries closing shop. Others have reportedly slowed down operations.
Players in the livestock sector maintain that income from the sales of hides is crucial to abattoirs since consumers now have low buying power and also because of the decline in beef prices.
Local tanneries are said to have inadequate capacity to process raw hides, resulting in excess supply which does not have a local market.
The local livestock sector has been facing a myriad of problems. State-owned meat processor Cold Storage Company (CSC), which used to be the biggest beef processor in the country and exported beef to the European Union, is saddled with a $22 million debt and owes workers $2,1 million in outstanding salaries.
The company was at one time the largest meat processor in Africa, handling up to 150 000 tonnes of beef and associated by-products a year.
Persistent outbreaks of foot-and-mouth disease halted exports in 2001, affecting its viability.
CSC requires over $50 million to revive operations and settle debts, but has remained a loss-making operation over the years.
Online Reporter