Namibia’s livestock sector: the obstacles & way forward

Outgoing president of Namibia’s Livestock Producers’ Organisation (LPO), Mecki Schneider, looks back on the highs and lows of 2016, and calls for ‘smarter’ farming and rangeland rehabilitation.

Namibia’s livestock sector: the obstacles & way forward
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Only some parts of Namibia had sufficient, well-spaced showers this year. This means that the rangelands were once again under pressure and did not have enough time to rest and recover.For many parts of the country, 2016 has been the fourth below-average rainy season. Herds were decreased, meaning years of rebuilding our livestock numbers lie ahead.

For many parts of the country, 2016 has been the fourth below-average rainy season. Herds were decreased, meaning years of rebuilding our livestock numbers lie ahead.

READ Namibia’s devastating drought in pictures

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One of our greatest assets in times of drought is our rangelands. The creation of the Rangeland Coordinating Unit (RCU), financed by the EU, gave new momentum to communicating the National Rangeland Management policy and strategy to all regions of Namibia. Various working groups have been formed and the one for the commercial farming sector will be up and running soon.

We are delighted that we found a simpler way of exporting livestock to specific feedlots and abattoirs in SA without having to adhere to the strict import regulations initially demanded. Soon, other SA feedlots will be registered for import and we trust that our livestock exports will henceforth proceed in an orderly manner.

It’s a pity there had to be confrontation before negotiations led to the current win-win situation. It would have been to the benefit of all SADC neighbours had this confrontation been avoided.

The smallstock marketing scheme also demanded attention this year. No one takes note of the fact that sheep farmers are losing millions. In turn, agriculture’s share of the gross domestic product (GDP) is decreasing.

It makes no sense that secondary role players in the value chain are profiting and placed in a comfort zone while farm production at grassroots level is handicapped. Farmers will be forced away from smallstock production to other activities such as game and tourism.

The Livestock Producers’ Association (LPO) has once again formulated its independent viewpoint and will forward that to the minister of agriculture.

Adding value
Another important challenge is the lack of understanding of the term ‘value addition’ in the livestock industry. The value added by the farmers is either ignored or seen as inferior. Where does value addition start? It starts when the farmers select which ram to mate with which ewe – and ends with a marketable product.

A sheep or goat is not a rough diamond or a piece of coal or iron ore which is mined and placed on a shelf until processed. The processing and value addition start when the farmer makes choices about mating, feeding and marketing.

When farmers sell to SA, they get about 50% of the value of the sheep carcass when they deliver live, market-ready products. The abattoir adds a maximum value of 2% (some insiders reckon this may be a negative figure due to the limited shelf life of the product). This means 48% is taken up by the processing and trade partners.

That 48% value addition, however, occurs in SA through the marketing channels of the smallstock abattoirs. There have been repeated acknowledgements that the slaughtering process alone does not add value. This means producers are and remain by far the largest adders of value within Namibia.

Ministry officials get stuck on textbook definitions of ‘value addition’ and hammer on about job creation. But it makes no sense to focus on the few hundred job opportunities at the smallstock abattoirs when thousands of farm jobs are threatened. The farming industry is shrinking.

The LPO has to again drive the negotiation process in favour of smallstock farmers and wealth creation in the rural areas.

Financial viability
How financially viable is stock farming? Over the years, the LPO has meticulously analysed the Cost Production Index. Cattle farming is currently worse off than sheep farming, having reached the level of 8% profit loss per year over the past 10 years. That is very worrying. It means cattle farmers are 80% worse off than 10 years ago.

Or you need to farm 8% more effectively every year to achieve the same level of disposable income.

At the same time, input costs are increasing much faster than any growth in income. For example, weaner and carcass prices have not kept up with input costs. Agri-inflation is far higher than the general consumer inflation rate.

This financial pressure, coupled with the current drought and export uncertainties (which negatively influence weaner prices), all place a tremendous burden on stock farmers.

This brings me to the challenges facing the beef processing sector. Our smaller abattoirs, which mostly deliver to the local markets, are well established. Meatco, our flagship abattoir, sets the price example for slaughter animals nationally.

Policy matters such as the restructuring Meatco and the new board of directors still need to be concluded.

Cabinet recently approved the transfer of Meatco to the Ministry of State Owned Enterprises, and the current term of the board of directors has been extended by another three months.

The LPO is in regular contact with this ministry to offer input and to remain informed on the state of the process, as not only the producers are in a state of uncertainty, but the markets of our processed goods as well.

Meatco remains an important partner in the viability of the beef industry. We trust that a new board of directors will be appointed soon to give new impetus to all Meatco matters.

Indigenous game
The LPO was once again this year confronted with the conflict between the livestock sector and indigenous game. Not only do predators cause many livestock losses, elephants have again wreaked much damage to the farming infrastructure in the north-west – all costs to be borne by the producers. The LPO is in regular contact with the Ministry of Environment and Tourism (MET) to address the problem.

Yet another conflict was created by the MET’s announcement it would promote buffaloes on game farms south of the veterinary cordon fence. Irresponsible expectations were created without in-depth consultation on the impact thereof on the N$5 billion livestock industry, with all its international markets and their strict veterinary requirements.

Currently, most Namibians are dependent on agriculture, and the industry is by far the largest. This matter will need long and thorough consultation.

Looking ahead
We have been through tough times, but the pendulum will again swing to years of plenty. In order to unlock the potential of agriculture in Namibia, however, we need to bear in mind that:

  • Organised agriculture will have to be more strongly supported by the various farming sectors. We need to look at the commitment of all stakeholders. The voice of agriculture needs to be loud and clear.
  • Commercial farmers need to realise that they must make provision for dry years – especially since government has other pressing social commitments in times of drought.
  • After these dry years, we have to pay attention to the recovery and progress of our rangelands. Our grasslands remain the mainstay of increased production because sustainable stocking will be the income generator for the future of livestock.
  • Smart farming is the new approach to farming. This means, among others, the increased precision farming of livestock, with detailed record-keeping of all farm matters. Production and financial norms per unit area should be known, to ensure good decisions.
  • Another aspect of smart farming is the use of technology. Modern farming could be much more profitable if such resources are used to the maximum.
  • A motivated workforce is of the utmost importance to unlock the potential of agriculture. – Staff reporter

Adapted from the Livestock Producers’ Organisation chairperson’s report delivered by Mecki Schneider recently. In accordance with the LPO constitution, Schneider will be retiring after four years (and 18 years of serving as a committee member of the LPO).

The views expressed in our weekly opinion piece do not necessarily reflect those of Farmer’s Weekly.

For more information, contact Mecki Schneider at 00264 81 129 2632 or [email protected].

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Annelie Coleman represents Farmer’s Weekly in the Free State, North West and Northern Cape. Agriculture is in her blood. She grew up on a maize farm in the Wesselsbron district where her brother is still continuing with the family business. Annelie is passionate about the area she works in and calls it ‘God’s own country’. She’s particularly interested in beef cattle farming, especially with the indigenous African breeds. She’s an avid reader and owns a comprehensive collection of Africana covering hunting in colonial Africa, missionary history of same period, as well as Rhodesian literature.