What Would it Take for Zambia’s Cattle

Industry to Achieve its Potential?

Sunil Sinha

Prepared for the Job, Prosperity and Competitiveness Project

Supported by the World Bank, African Development Bank, and DFID

1

Huge Potential of Cattle

2

Substantial Grazing Land, Good Conditions

• 4 times more grazing than arable land• 3 agricultural zones suited to livestock

• If Zambia = Kenya : additional asset value of US$4.5 billion.

Domestic Market: Potential for Fast Growth

• Consumption of beef and dairy products rises fast when incomes increase.

• Zambians consume very little beef and dairy products.

4

Zambia could export more beef & Dairy products to neighbours

5

• Namibia and Botswana supply beef to RSA and export to Europe. RSA is a net importer. Exports to DRC, Angola.

• Botswana, RSA, Tanzania, Malawi import dairy products.

Beef main importers (2007)

US$ ‘000

RSA 23,665

Zimbabwe 727

Beef main exporters US$ ‘000

Botswana 111,207

RSA 10,557

Namibia 38,487

Milk main importers (2007)

US$ ‘000

Botswana 15,242

RSA 6,823

Angola 5,387

Tanzania 1,611

Milk main exporters (2007)

US$ ‘000

RSA 2,223

Zimbabwe 885

Kenya 778

6

• World Beef and Dairy Trade = $50 billion+.

• Slow growth, Prices falling in real terms.

International Markets Huge & Very Competitive

Cattle: Key To Reducing Rural Poverty

• Livestock owned by most rural households • Higher proportion of household incomes

than crops (c 40%). • Cattle industry: 310,000 (c 25%) of

households• Cattle is the largest asset (US$1-1.5

billion)Cattle Sheep Goats Pigs

Poultry

Million heads

3.1 0.485 0.746 0.704 9.9

Under Performing, Uncompetitive

8

9

Small Cattle Population, Concentrated In 4 Provinces.

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Underperforming In Beef & Dairy

• Production is not much higher than1990, negligible exports...

11

Currently, Not Competitive In Beef

Source: FAOSTAT, year 2007, Zambia figure: consultants’ calculation

  Zambia Kenya Namibia RSA Argentina Brazil UK USA

Live weight

(US$/kg) 1.29 1.11 1.19 1.57 1.26 0.99 2.26 1.98

Dressed weight

(US$/kg) 3.69 2.16 2.13 2.8 2.7 2.04 4.19 3.81

Competitive in live weight, not in dressed weight.

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Nor In Dairy

Farm Gate Producer’s Price, US$/Litre

Source: FAOSTAT, Heifer International, Zambia figure: consultants’ calculation

Cost of raw milk is high because of scarcity, still importing powder to reconstitute as milk.

  2008 2009

Zambia 0.68 0.6

South Africa 0.4 0.4

Kenya 0.2 0.3

Why Not Fulfilling Its Potential?

Small Market, But Now Growing

Incomes low outside formal employment Prices: higher than neighbours, 10% of food expenditure But market for beef now growing 5%-7%, Dairy c. 10% p.a. But constraint in Lusaka.

Driven by:

higher urban incomes, urbanisation changing lifestyles, changing food consumption patterns

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3 Systems: Motives, Opportunities & Constraints

Cattle Population (000)

15

Farmer Type Traditional   Emergent   Commercial  

Calving rate 30%-50% in-btn 70%-80%

Calving mortality 30%-40% in-btn 1%-2%

Adult deaths 5%-10% Lower Lowest

Off-take rates 8%-9% 10%-15% 17%-18%

Live Weight 200-250 250 300

Milk yields 1-2 ltrs 8-10 ltrs 17-23 ltrs

Characteristic Low growth Dynamic Dynamic