Market study on pig products in Botswana Moses Galeboe ... Study Complete version.pdf(Researcher –...

Local Enterprise Authority

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RESEARCH AND DEVELOPMENT DIVISION

Market study on pig products in Botswana

Moses Galeboe, Isaac Mbaiwa, Onalenna Mmatli

Date: September 2009


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Acknowledgements

This study was commissioned by the Local Enterprise Authority (LEA), and conducted by LEA’s Research and Development Division (RDD). The Division would like to thank the team of research staff who undertook this study, which was led by Moses Galeboe (Researcher – Agriculture). Sincere gratitude goes to Dr. Neo P. Mooko (Director, RDD) for her guidance in this project and by extension LEA’s Executive Committee (EXCO) for the resources availed to enable the conduct of the study.

This report was authored by Messrs Moses Galeboe, Isaac Mbaiwa and Onalenna Mmatli of RDD. Special thanks also go to Messrs Isaac Mbaiwa, Onalenna Mmatli, Jacob Kegakgametse who participated in the design of the study and diligently undertook its field work and data processing. The team also extends its appreciation to Ms. Boikhutso Kgomanyane and Ms. Dynah Solani for their contribution in data collection and coding respectively. Mr. Kgotlhaganang Kgakololo is also highly acknowledged for his invaluable contribution of design of data processing and analysis systems for the study. The technical input of the entire RDD team in general is immensely appreciated in respect of providing guidance and quality control through all the stages from inception of the project through writing of its report.

Finally RDD would like to extend gratitude to the staff of LEA’s National Branch Network (NBN) staff for the support which eased data collection for the study. LEA also acknowledges Central Statistics Office (CSO) for provision of complementary data especially in respect of trade statistics on pig products. LEA would like to extend sincere gratitude to the Authorities of the Ministry of Agriculture and their District staff as well as the piggery farmers for their cooperation and information sharing during data collection. The cooperation and input of these stakeholders during data collection was the most critical component of the project and this report would not have been possible without their selfless sacrifice of their time.


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Executive summary

(i) Scope and purpose of the study

The origin of LEA’s interest to study the piggery sub-sector in Botswana can be traced back to 2008 when the National Network Branch (NBN) made a request to Research and Development Division (then Research and Information Management Division (RIM)) to study the potential for commercialization of the sub-sector in the Southeast Region. Following consultation with NBN, the Division undertook a preliminary study which was carried out by way of desktop research and information gathering from the abattoirs in the vicinity of the Southeast region. Subsequent to this, in 2009, LEA’s Executive Committee (EXCO) directed that the current study be undertaken.

The overall objective of the current study was to undertake a market study nationally which would inform the Authority on the structure of the piggery industry in Botswana as well as the potential and challenges experienced by its major players. To this end the major players in the industry would be identified and brought on board. To meet this objective the study was designed to gather information from the farmers as well as the institutions that trade in pork products in the entire country. The study therefore, targeted producers in respect of commercial farmers and traders of pork products (alternately referred to as institutions). These institutions included wholesalers, retail outlets, restaurants, hotels and lodges. The specific objectives for the study were as follows:

1. Provide information on developments in the pig products market both locally and internationally covering prices, supply and demand.

2. Identify the target markets for pork products, their demand and requirements.

3. Establish the level of production and contrast that with the corresponding demand.

4. Identify challenges faced by commercial pig producers in marketing their produce and recommend remedial measures.

5. Explore issues relating to market access for local producers to penetrate local and external markets.

6. Explore the various distribution channels that exist in the pig products market and recommend the most appropriate for the farmers.


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(ii) Key findings

Desktop study

The desktop research part of the study has found out that pork is the world’s choice meat, surpassing beef, poultry and others. According to FAO, pork has been the most consumed meat in the world since 1976. FAO also estimates that pork consumption will increase further in the future owing to population growth and increased per capita consumption. FAO statistics show that pork production stood 98.5 million tons in 2003. FAO further projects that in the year 2015 the world will require to produce between 113 million tons and 130 million tons of pork to be able to meet the world demand.

Literature shows that the key conditions required by a country to gain competitive edge in pork production are availability of water and land. Adequate water is required for producing, not only pigs, but also other raw materials (grains) essential to their feeding. On the other hand abundant land is required to house the waste from the pigs, which can then be used as fertilizer for the grains which can be processed into pig feeds.

Farmers’ survey

1. The piggery sub-sector has been growing during the past decade with the number of commercial farmers increasing over the years. The study targeted all of these commercial farmers, and 37 were reached countrywide.

2. The piggery sub-sector is dominated by adult male farmers. The women and youth who are part of the LEA target groups are under-represented. Specifically young female entrepreneurs were found to comprise only 3 percent of the piggery farming community.

3. Over 90 percent of the farmers raise animals for pork production. About 53 percent of these farmers concentrate their efforts solely on this aspect, while 38 percent double this activity with breeder stock production.

4. Specialization in breeding is non-existent among the farming community. There is an opportunity in this area for LEA to promote new entrants to fulfil this role to service the stocking needs of new farmers as well as existing piggery units in light of restocking or expansion.


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5. In respect of operation of piggery unit, feeds, labour and transportation are the main cost items. On average feeds far outweighs other cost items as they were reported to cost about P90.40 per animal per month. On the other hand payments to labour and transportation cost P29.13 and P13.94 per animal per month respectively.

6. Most of the farmers (89 percent) target pork trading institutions, while 11 percent of the farmers market their produce directly to individuals. Only 15 percent of the farmers who sell to the traders were found to be able to extend their marketing reach to national level while the rest were confined to marketing their produce within the regions where they are located.

7. The farmers are individualistic in their marketing which necessitates efforts of getting them to associate to be intensified.

8. The farmers were found to understand the requirements of the market as their stock comprised largely of large white breed. This breed was found to be the most preferred among the institutions that buy pork from the farmers.

9. Additionally farmers were found to rely largely on the Ministry of Agriculture and LEA for various training related to their piggery unit operations. These organizations, together with CEDA, Department of Culture and Youth need to collaborate to administer a national programme aimed at enabling the sub-sector to take advantage of the vast existing market opportunity and growing it to achieve diversification of both the agriculture sector and the national economy of Botswana.

Institutions survey

1. The study found out that the annual national demand for pork products was 2,417.945 metric tons valued at P41.385M. On the other hand the annual supply of pork was estimated to be 1,758.919 metric tons valued at P11.139M. The study estimated a shortfall of about 630.864 metric tons (26 percent of the total demand). Only 25 percent of the supply of pork received by the institutions was reported as local produce, showing the country to be overly dependent on imports (75 percent).

2. Pork ribs were found to be high in demand compared with other pork products. Out of 18 pork products pork ribs accounted for over 36 percent of the demand. Most of the pork ribs were found to be sourced from imports as well as all the other products.


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3. The study found that the wholesalers are the main market for the farmers (70 percent of the national demand was from the wholesalers). The retailers followed the wholesalers with 21 percent of demand). The wholesalers were also found to do most of the purchases (69 percent of local purchases and 96 percent of imports) The structure of the market is therefore such that the wholesalers purchase produce at farm-gate price and then they in turn serve as the secondary source of supply to the other institutions and individuals in the country.

4. Most of the institutions who responded on the question of price determination reported that the price they paid for pork produce was a result of negotiation with the suppliers.

5. The demand from the retailers was largely for whole carcass (79 percent), to be further processed into the various pork products. On the other hand the demand from the restaurants comprised largely of pork ribs which constituted 46 percent followed by bacon with 28 percent. Similarly in respect of the hotels and lodges the demand comprised largely of pork ribs taking 42 percent followed by bacon with 18 percent. Whole carcass, pork chops and sausages were next with 12 percent, 10 percent and 10 percent respectively. Almost half of the bulk of the demand from wholesalers was for pork ribs (46 percent). Bacon and polony (processed products) were also high on the priority list of the wholesalers as they constituted 20 percent and 17 percent respectively.

6. The traders (86 percent of respondents) were found to require mostly fresh pork from the farmers which they would package and label according to their own requirements. Additionally most of the traders are satisfied with the quality of pork from their local suppliers as shown by 72 percent of them grading the quality as either good or excellent. Further 16 percent of the traders found the quality of locally supplied pork as acceptable, which brings the number of customers who are content with local supplier’s quality to 88 percent.

(iii) Conclusions

1. On a general level the study concludes that the piggery sub-sector, though still at infancy in Botswana compared to the beef and the poultry, is growing and has potential for further growth if it continues to receive consideration of LEA’s interventions such as the LEA cluster formation programme. LEA’s focus on the sub-sector can catapult it to provide the much desired diversification of the agriculture sector as well as the economy of the country at large.

2. Pork is the worlds leading choice meat and its demand will increase globally in the future as a result of the growth in its per capita consumption as well as the continuing growth in the world population. However, before the local producers can begin to target international markets they still have vast opportunity domestically as there exists an annual shortfall of about 630.864 metric tons of pork products to satisfy the


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unfulfilled demand of the local traders. Notably, prohibitive feed costs are reported to be a limiting factor to the endeavors of the local farmers to raise production.

3. Piggery enterprise was found to be a growing business undertaking in the country as shown by the increasing number of establishments over the years. This enterprise was found to be more popular in the Ramotswa region, and other places on the eastern side of the country such as Molepolole, Kanye, and Mochudi. Piggery enterprise was also found to be popular in Serowe and areas in its vicinity. These areas present a comparative advantage to justify their high priority status in the scheduling of cluster formation initiatives by LEA. Most of the commercial farmers target pork production leaving a window of opportunity in the industry for specialized breeding farmers.

4. Alongside feeds, salaries and wages, transportation was found to be one of the main cost drivers to the pig enterprise operators. Additionally most of the farmers are individualistic in marketing their produce and are therefore, burdened with transportation of their produce to reach the markets and their customers.

5. Most of the farmers were found to be focused on producing animals to be slaughtered to provide fresh meat to processing agents in the industry. Large white breed of pigs was found to be the most commonly kept among farmers as well as being the breed of choice for those institutions that were breed specific in their demand for pork products.

6. No farmers were found to be focused solely on breeding of animals for sale to other farmers. Opportunity in this area needs to be explored further by with possibility of entry of new entrepreneurs who will be assisted by LEA.

7. Most of the farmers rely on own transport to take their produce to their markets and customers. This finding was consistent both from the point of view of the farmers as well as the traders. Farmers are also individualistic in their marketing and transportation.

8. A number of organisations were cited by the farmers as their providers of business development services. Most of the services were found to have been provided by LEA and MoA. Overlaps in the content of the courses was observed between the organisations.


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(iv) Recommendations

1. LEA should continue to promote development of the piggery sub-sector through cluster formation in view of the domestic market opportunity (as evidenced by demand-supply gap) with a longer term goal of making inroads into the expanding international pork markets. The cluster formation programme should commence in the Southeast to take advantage of the comparative advantage provided by the high business activity level in the area.

2. LEA should work with the Department of Animal Production, specifically Pig Development Section as well the Department of Agriculture Research in the Ministry of Agriculture to embark on research for improved pig and cheaper feeds that can be produced locally to reduce feeding costs to the farmers. LEA and the Ministry of Agriculture (MoA) should work with the raw materials-producing enterprises such as feed-growing farmers to be linked with feed formulators (e.g. Nutri feeds) as part of its cluster development programme.

3. LEA should, as part of its Business Opportunity Department, explore further the business opportunity in respect of breeder farmers. These farmers can be linked with the DAR to provide improved quality breeder stock to the pork producing farmers in the country.

4. LEA should liaise with MoA, CEDA and others to ensure synergy in the provision of business development training for the farmers. In this regard the organisations should harmonise their programmes and interventions such that areas of specialty are identified for each one of them. The programmes of the individual organisations can then feed into a coordinated national pigs sub-sector development programme.

5. LEA should sell the idea of creation of a pig produce futures market to the Botswana Pig Producers Association which can possibly to link the suppliers of inputs, producers and their wholesale and retail customers. This would also have the effect of a market based price regulating mechanism which would alleviate the problem of lack of negotiation skills to influence the produce prices as cited by farmers. Established collection produce points also need to be established which will benefit the farmers by way of cutting down on transportation costs.


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List of Acronyms used

CEDA Citizen Entrepreneurship Development Agency

CSO Central Statistics Office

DAR Department of Agriculture Research

EXCO Executive Management Committee (LEA)

GDP Gross Domestic Product

LEA Local Enterprise Authority

MoA Ministry of Agriculture

NFTRC National Food Technology Research Centre

MITC Meat Inspection Training Centre

NAMPAAD National Master Plan for Arable Agriculture and Dairy Development

NBN National Branch Network

NDP National Development Plan

RDD Research and Development Division


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Table of contents

Acknowledgements ...................................................................................................................... 2 Executive summary...................................................................................................................... 3 List of Acronyms used ................................................................................................................ 9 Table of contents ....................................................................................................................... 10 Terms and definitions................................................................................................................ 13 1 Introduction ......................................................................................................................... 14

1.1 Background ................................................................................................................................ 14 1.2 Literature review .................................................................................................................. 15

1.3 Rationale ..................................................................................................................................... 18

1.4 Structure of the report .............................................................................................................. 18 2 Research purpose and methods ........................................................................................ 19 3 Findings ................................................................................................................................ 21

3.1 Findings of the farmers survey ................................................................................................ 21

3.1.1 Demographic details of respondents and their geographical location .................... 21

3.1.2 Year of establishment of the piggery businesses ............................................................... 21

3.1.3 Production situation ............................................................................................................... 22

3.1.4 Farmers’ operational costs .................................................................................................... 23

3.1.5 Farmers’ quality control measures ....................................................................................... 25

3.1.6 Target markets and distribution of products ...................................................................... 25

3.1.7 Marketing and distribution of products ....................................................................... 27

3.1.8 Sales and prices ....................................................................................................................... 29

3.1.9 Current meat prices reported by the farmers ..................................................................... 31

3.1.10 Business development activities and services ................................................................... 31

3.2 Institutions survey ..................................................................................................................... 33

3.2.1 Details of the institutions and their geographical location ............................................... 33

3.2.2 Current market situation ....................................................................................................... 35

3.3.3 Demand and supply of pork produce ................................................................................. 36 4 Conclusions and recommendations .................................................................................. 43

4.1 Conclusions ................................................................................................................................ 43

4.2 Recommendations ..................................................................................................................... 45 5 Literature cited ..................................................................................................................... 46


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List of tables and figures

Table 1: LEA registered pig farming clients (as at September 4, 2009) ................................... 14

Table 2: World pork production per continent, 2004 ................................................................ 17

Table 3: Demographic details of respondents and their LEA clientele status ........................ 21

Table 4: Monthly average operational costs ................................................................................. 24

Table 5: Weighted monthly average operational costs ............................................................... 24

Table 6: Problems encountered in marketing produce .............................................................. 28

Table 7: Frequency of mode of transport .................................................................................... 29

Table 8: Derived average prices of pigs (Pula per animal) ......................................................... 30

Table 9: Average meat prices at farmgate ..................................................................................... 31

Table 10: Institutional categories and frequencies ...................................................................... 33

Table 11: Location of institutions covered .................................................................................. 34

Table 12: Frequency of interviewees for the institutions’ survey ............................................. 35

Table 13: Source of Supply for Pork Products ............................................................................ 36

Table 14: Annual demand and supply of pork in Botswana (Metric tons).............................. 37

Table 15: Monthly Demand for Pork Products by Institutions ................................................ 38

Table 16: Monthly supply of pork products by local suppliers ................................................. 38

Table 17: Monthly import supply of pork products ................................................................... 39

Table 18: Product presentations required by traders .................................................................. 41

Table 19: Perceptions of the traders on the quality of pork supplied by local farmers ...... 432

Figure 1: The world market demand for meat products ............................................................ 15

Figure 2: Trends in the world market demand for meat products ........................................... 16

Figure 3: Pork production and trade in Botswana ...................................................................... 18

Figure 4: Year and number of establishments for piggery businesses ..................................... 22

Figure 5: Farmers core business activity ....................................................................................... 23

Figure 6: Frequency of respondents by common product pre-requisites ................................ 26

Figure 7: Media used by farmers to market their products ........................................................ 27

Figure 8: Sales, values and derived prices ..................................................................................... 30

Figure 9: Derived price trends for various breeds in Botswana ................................................ 31

Figure 10: Interactions of the players in the piggery sub-sector ............................................... 36


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List of annexures

Annex 1: Location of farmers enumerated ............................................................................ 47 Annex 2: Production problems faced by the farmers ........................................................... 48

Annex 3: Training courses received by farmers .......................................................................... 49

Annex 4: Monthly demand for the institutions ........................................................................... 50

Annex 4b. Restaurant monthly demand of pork ......................................................................... 50

Annex 4c. Hotels and lodges monthly demand of pork ............................................................ 51

Annex 4d. Wholesalers monthly demand ..................................................................................... 51

Annex 5: Monthly supply of pork to institutions by local farmers ........................................... 52

Annex 5b. Hotels and lodges' monthly supply of pork products by local suppliers .............. 52

Annex 5c. Wholesalers' monthly supply of pork products by local suppliers ........................ 53

Annex 6a. Retailers' import supply of pork products ................................................................. 54

Annex 6b. Wholesalers' import supply of pork products .......................................................... 54

Annex 7: Preference of traders to suppliers ................................................................................. 55


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Terms and definitions

The following technical definitions of terms apply in the context of this study.

Baconer: A pig generally weighing over 70 kilograms (from which bacon is cut).

Weaner: Young pigs (piglets) that leave the sow and begin eating solid food.

Porker: A young pig generally weighing between 40 kilograms and 69 kilograms fattened to provide meat such as pork chops.

Boar: Un-castrated male pig.

Sow: Female adult pig (especially after farrowing).

Cost driver: An activity that causes a cost to be incurred.

Institution: In the context of this study an institution refers to retailer, restaurant, hotel or lodge and wholesaler that trades in pork products in Botswana.

Region: This refers to the geographical coverage of each of LEA’s National Network Branch Offices.


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1 Introduction

1.1 Background

LEA through its Ramotswa Branch is presently engaged in the formation of a competitive cluster of enterprises which will encompass piggery farmers in the Southeast Region. LEA’s choice of the Southeast region as a starting point is justified by the fact that the region characterized by a long standing tradition of pig farming, albeit often operating on a non-commercial level. The cluster formation initiative on piggery enterprises is therefore, pursued with a view to commercialise the sub-sector and set it on a path of global competitiveness. The LEA database of enterprises also shows the dominance of the Southeast region in pig farming as at the time of writing this report the LEA Ramotswa Branch Office had generated more pig farming interest (37 promoters) than any of the other twelve LEA Branch Offices (refer to Table 1).

Table 1: LEA registered pig farming clients (as at September 4, 2009)

LEA Branch Pre-start Startup Existing TotalRamotswa 30 2 5 37Molepolole 25 0 0 25 Kanye 22 1 2 25 Serowe 17 0 3 20 Mochudi 6 1 2 9 Gaborone 6 0 1 7 Francistown 3 1 1 5 Masunga 4 0 1 5 Selebi Phikwe 3 0 0 3 Maun 1 0 0 1 Kasane 1 0 0 1 Total 118 5 15 138


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1.2 Literature review

1.2.1 The global situation on world demand for pork

The following excerpt from a paper entitled “Global Perspective on Integrated Production” presented at the London Swine Conference – Production at the leading edge held on April 6 – 7, 2005 gives an analysis of the progression of pork consumption over the past three decades.

“The world’s population has increased during the last decades and will increase further during this century. Due to this fact and increased meat consumption per person, global consumption of meat will rise. Over the last 40 years, global pork production has increased by a factor of 3.5 from 24.7 million tons in 1961 to 86.6 in 2002.” (Leo den Hartog, 2005).

World pork consumption increased by 27% between 1997 and 2005 (Donald E. Orr Jr. and Yingran Shen 2005). In 2005 global pork consumption was estimated to be over 93 million metric tonnes. FAO compilation of world market demand and its projection for up to the year 2010 shows that pork is the meat of choice globally, albeit with a loss of market share, especially to poultry, in recent years (refer to Figures 1 and 2). According to FAO the largest market for pork is China with consumption of over 17 million metric tonnes per year. Therefore, in this respect (and ignoring other factors), opportunity beckons for local producers to invest in the sub-sector with a view to eventually take a shot at attaining increased global market share.

Figure 1: The world market demand for meat products

Source: Global Perspective on Integrated Pork Production, Leo Den Hartog, 2005


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Figure 2: Trends in the world market demand for meat products

Adapted from Leo Den Hartog, 2005

1.2.2 World pork production

In 2003 the world production of pork stood at 98.5 million tons from a herd of approximately 1 billion animals. Asia dominated the world production, accounting for about 55 percent followed by Europe with 26 percent. Africa accounted for only 0.78 percent. At country level China is by far the largest producer as well as being the largest consumer of pork. As seen above, pork has been the most consumed meat in the world since 1976 when it overtook beef. According to FAO projections the world demand-matching production of pork in the year 2015 will be between 113 million tons and 130 million tons.

According to Roppa (2005), the key conditions for a pork producing country to gain competitive edge in the future are availability of water and land. Countries with higher water availability have better conditions for producing, not only pigs, but also other raw materials (grains) essential to their feeding. In respect of land one of the greatest limitations for the growth of pig production is waste.

“A pig defecates the equivalent of 2.5 people, and the use or storage of this waste is becoming a serious problem in large farms. One of the ways of using this waste is as fertiliser. Therefore, countries with large areas of land and adequate climate will have the advantage of using the waste as fertiliser in crops and of producing grains for feeding the pigs at a lower cost” (Roppa, 2005).


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The analysis presented above is critical for Botswana’s pig production sub-sector because while the country may have advantage in land availability it will still face limitation in respect of water availability and climatic conditions relative to some competitors in the global arena. Therefore, water conserving technologies as well as finding ways to mitigate the adverse local climatic conditions have to be pursued as critical areas of cost control and continuous productivity improvement. World pork production figures are shown in Table 3 below.

Table 2: World pork production per continent, 2004

Production Continent (Million tons) % Asia 54.44 55.27Europe 25.96 26.25 America 16.78 17.04 Africa 0.77 0.78 Oceania 0.55 0.56 World 98.50 100 (Source: L. Roppa, 2004)

1.2.3 The local situation of production and trade of pork

On the local scene one has to start off with acknowledgement of the fact that very little literature, if any at all, exists on the subject of commercial pig production and trade. According to the Ministry of Agriculture (MoA) the pig population in the country was estimated to be 11,335 during 2008/09. There exists a differential in the figures on pig operations of MoA and those targeted for this study arose due to the fact that only commercial operations with regular supply of produce to an organized market were eligible for enumeration and the data collection instruments were thus business operations inclined.

According to the MoA data production of pork has generally been stable over the past 6 years. It has to be borne in mind, however, that the Ministry’s figures are all encompassing of both commercial as well as non commercial farming operations and may thus be divergent from the observed increased investment in the sub-sector (refer to Figure 1). Using the 2004 domestic production level and the FAO statistics as proxy for estimation of Botswana’s market share it can be seen that the country contributes approximately 0.06% of Africa’s output and a distant 0.0005% of the world output. An increase in the import level was experienced in 2005, as well as 2007 and 2008. Exports have also been on a general decline during the past 5 years. Consumption (derived demand) was has been on a general decline during the period 2004 through 2007.


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Figure 3: Pork production and trade in Botswana

Sources: CSO (Trade statistics, unpublished) and MoA (Pig Development Section Annual Report, 2008/9)

1.3 Rationale

Agriculture is one of the niche sectors in which LEA is mandated to continuously administer SMME business development interventions with the ultimate aim of diversifying the economy of Botswana. LEA undertook this market study on pig products in Botswana to explore further the opportunities that exist in the piggery industry in Botswana as well as identify challenges requiring intervention by LEA and other stakeholders. The results of the study will inform the business development programmes of the LEA for the benefit of both existing and potential investors in the piggery industry.

1.4 Structure of the report

Chapter 1 of this report gives the introduction which entails the background to the study, literature review and rationale for LEA’s conduct of the study. Chapter 2 outlines the purpose of the research in respect of the objectives which is then followed by a description of the methods used in gathering and analysing the data. This Chapter also gives the limitations of the study in respect of the methodology adopted. The findings of the study are presented in Chapter 3 covering the two surveys undertaken in this study, being the farmers’ survey and the institutions’ survey. The last part of the report contains appendices which include sample frames, questionnaires and additional study tables that could not be included in the main body of the report.


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2 Research purpose and methods

2.1 Research objectives

The overall objective of the study was for LEA to undertake a market study aimed at generating information that would enable the Authority to gain understanding of the structure of the piggery industry covering the major players in respect of production and marketing of pig products in Botswana. The specific objectives were as follows;

2.1.1 Provide information on developments in the pig products market both locally and internally covering prices, supply and demand.

2.1.2 Identify the target markets for pork products, their demand and requirements.

2.1.3 Establish the level of production and contrast that with the corresponding demand.

2.1.4 Identify challenges faced by commercial pig producers in marketing their produce and recommend remedial measures.

2.1.5 Explore issues relating to market access for local producers to penetrate local and external markets.

2.1.6 Explore the various distribution channels that exist in the pig products market and recommend the most appropriate for the farmers.


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2.2 Methodology

2.2.1 The sampling frame, sampling and geographical sample location

Two surveys were undertaken under the study. The first survey targeted all commercial pig farmers in the country, including those that are operating and which may not be registered with LEA for business development interventions. The latter, who are not part of the LEA database, and were identified with the assistance of the LEA Branch Offices as well as the authorities of the Ministry of Agriculture (MoA) at District and Regional levels. The second survey targeted major traders of pork and related meat products such as restaurants, supermarkets, hotels and lodges which provide a market for the pig producers. These were also identified countrywide and were all targeted for enumeration. Various information sources were also utilised, especially in collating information to be used to populate the supporting pig products market profile that shall be compiled post completion of the study.

2.2.2 Data collection, management and analysis

Interviews were conducted by three LEA Research Officers with respondents at farm level, as well as the aforementioned traders of pork products. Further, analyses of these field data are complemented by desktop information from various sources such as Central Statistics Office trade data, the MoA reports, National Development Plan, FAO reports and other secondary sources. Data processing was performed using CSPro Software while the data was subsequently exported to SPSS software for tabulation and further analyses.

2.3 Limitations

1. The farmers’ survey was administered to farmers who were assessed to be operating their farm holdings as businesses i.e. those who supplied pig products to some organised market on a regular basis. By design, this excluded some backyard operations where animals were found to be kept principally for wealth or household consumption purposes. Users of the results of the study are therefore cautioned to interpret the results of the study taking cognizance of this fact.

2. Attempts were made, which came to nought, to find literature related to commercial piggery in Botswana. The Annual reports of the Pig Development Section of MoA were therefore, relied upon even though they were bereft of in-depth commercial information.


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3 Findings

3.1 Findings of the farmers survey

3.1.1 Demographic details of respondents and their geographical location

In total 37 farmers were reached during the study and on the basis of their data the sub-sector was found to be dominated by male farmers (62 percent), especially among the adult population who accounted for 41 percent of the respondents. On the other hand young females were found to be least involved in the sector as they accounted for only about 3 percent of the respondents. Out of all the farmers enumerated almost half (46 percent) were found to be LEA registered clients while the other 54 percent were non-LEA registered enterprises identified with the assistance of both LEA Branch Offices and the authorities of the Ministry of Agriculture at district level (refer to Table 3). Noteworthy here is the fact that the LEA registered clients classified as ‘pre-start’ were excluded from the sample taking into account the design of the data collection instruments which were tailored to gather data relating to business operation, progression and experiences of the entrepreneurs.

Table 3: Demographic details of respondents and their LEA clientele status Sex of Promoter Male Female

Age LEA Non-LEA LEA Non-LEA Totals 25-29 4 4 1 0 9 30-34 3 2 0 0 5 35+ 4 6 5 8 23

Totals 11 12 6 8 37

Annex 1 delineates the farmers that were enumerated by location.. Most of these farmers were enumerated in the Kgatleng District (9 respondents). Selebi Phikwe, Serowe and Francistown all had 5 farmers while Ramotswa and Kanye had 4 and 3 respectively.

3.1.2 Year of establishment of the piggery businesses

Figure 4 delineates the year of business establishment for all the piggery projects enumerated during the study. This figure shows that most of the enterprises that are in operation (95 percent to be specific) are fairly new businesses established after the turn of the 2000 millennium. This figure also exhibits increasing growth of the sub-sector over the past decade. All the enumerated enterprises were found to have been in continuous operation during their existence over the past 5 years. The sub-sector as represented by the farmers had a minimum workforce of 120 people. This included 32 promoters who worked fulltime on their enterprises and 7 unpaid family helpers. The workforce comprised mainly citizens (68% of the employees).


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Figure 4: Year and number of establishments for piggery businesses

3.1.3 Production situation

The total pig stock held on the farms was 4,569. The most favoured pig breeds were large white (64 percent of the stock), cross breeds (25 percent) and landrace (11 percent). The composition of the cross breeds were not ascertained during the study. The least kept breeds were duroc and tswana breed comprising 0.3 percent and 0.2 percent of the total stock respectively.

Figure 5 shows that the farmers can be categorized into 6 groups. The focus of most farmers is to raise pigs specifically for pork production alone (18 respondents). These farmers either own or have access to slaughtering facilities. The second category of farmers split their operations into two viz; pork production and breeder stock production to service other farmers. This category constituted 13 farmers. Two of the farmers did not slaughter their animals at all, rather selling them live to their customers for pork production, thus allowing other agents along the marketing chain to increase value added in respect of slaughtering. Some other 2 pork producers were flexible in their operations as they engaged in both activities of slaughtering their animals for sale as well as engaging in live animal sales to slaughtering agents for pork production. Only 1 farmer reported strictly sales of live animals as porkers and/or baconers as well as engaging in sales of breeder stock. Lastly, there was 1 all rounder farmer who engaged in all the three categories of sales. There were no farmers at all who focused solely on the breeding end of the marketing chain to service other farmers with high quality and improved breeder stock. This calls for the LEA’s cluster formation programme to concentrate on restructuring the industry’s players along the marketing chain by opening opportunities for some entrepreneurs to start up operations to fulfill this specialized role in a more focused manner.


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Figure 5: Farmers core business activity

3.1.4 Farmers’ operational costs

Most of the farmers identified feed as their main cost driver in operating a piggery unit. In fact as high as 84 percent of the respondents ranked it at the top of their list of the main production problems encountered and this was attributed to lack of local suppliers of feeds. Lack of working capital was the second most prominent problem as it was ranked high in the priority list of 49 percent of the respondents. Third in the priority list was high fuel costs and shortage of skilled labour which were cited by 24 percent of respondents.

Average monthly operational costs as reported by the farmers are presented in Tables 4 and 5. Expenditure on feeds was affirmed as the main cost driver followed by staff remuneration and transport expenses as shown by these items taking the largest share of the operating expenses. Table 5 gives much more refined estimates of the costs by taking into account the size of the enterprise in respect of the herd of animals (i.e. calculating the costs per animal kept). This consideration however, does little to change the view of the cost structure of running a piggery unit as feeds, payments to labour, and transportation still remained the foremost cost drivers in piggery operation.

Live animals Pork

Breeder stock

Number of farmers engaged in various types of sales

2

11

2

13

18


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Table 4: Monthly average operational costs

Weighted cost

Cost driver (Pula/Month/Animal)Number of respondents

1. Feeds 14,161 35 2. Labour (Salaries and wages) 5,234 10 3. Transport fuel 1,320 30 4. Staff rations 1,200 1 5. Equipment repairs and maintenance 1,016 24 6. Bank charges 1,000 1 7. Medications 631 30 8. Electricity bill 625 8 9. Transport hire 400 2 10. Water bill 257 11

Table 5: Weighted monthly average operational costs

Weighted cost

Cost driver (Pula/Month/Animal)Number of respondents

1. Feeds 90.41 35 2. Labour (Salaries and wages) 29.13 10 3. Transport fuel 13.94 30 4. Transport hire 10.21 2 5. Staff rations 8.28 1 6. Equipment repairs and maintenance 7.50 24 7. Medications 5.38 30 8. Electricity bill 3.30 8 9. Water bill 3.04 11 10. Bank charges 0.76 1


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3.1.5 Farmers’ quality control measures

The main quality control measures employed by the farmers in respect of disease monitoring and parasite control were reported as practicing controlled movements of the animals (30 percent of respondents), regular vaccination and de-worming (14 percent), bio-security/control (14 percent), regular disease monitoring/diagnosis (14 percent) and dipping of the animals (11 percent). Issues of hygiene were highlighted by the farmers such as disinfecting of pens (19 percent) and frequent cleaning as in at least once a day (62 percent of the respondents).

Regular weighing of the animals to gage the performance of feeds and general management and well-being of the animals was also seen as a pre-requisite by 52 percent of the farmers who weighed their animals at least once fortnightly. Forty-four percent of the respondents adhered to providing at least 2 kg of prescribed feed per animal rationed on a daily basis. As much as 32 percent of the farmers reportedly stuck to recommended feeds.

3.1.6 Target markets and distribution of products

3.1.6.1 Target markets

The study identified 3 target markets that the farmers have access to, and these are individuals, traders and other farmers. The first two target markets are basically pork based while the latter relates to exchange of animals between the farmers. In respect of the first of the aforementioned markets the study found that 11 (30 percent) of the farmers market their produce directly to pork consuming individuals. These individuals are targeted locally (i.e. within the same town or village) by 6 of the farmers, while the other 5 farmers are able to extend their sales to market localities in the vicinity of their localities but largely within the confines their regions.

The second target market, traders, is the most important as it was found to be serviced by 33 (89 percent) of the farmers. Most of the farmers who operate in this market (15) are also focused on raising animals for pork production and are able to access the traders at regional level (i.e. sub-nationally). On the other hand 5 of the farmers are able to extend their trader market catchments nationally. This marketing route needs to be promoted as it provides an avenue through which quality and food safety standards could be monitored and controlled as opposed to having individuals source the meat products directly at the farm gate. The remaining farmers are confined to trader markets within their localities of operation. The third market involves 11 (30 percent) farmers, 8 of whom market their animals locally (i.e. within their villages or towns) while the remaining 3 are able to extend their marketing to regional customers (i.e. sub-nationally).


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It was noted above that the main target market is the retail industry, specifically supermarkets and butcheries. Figure 6 shows that as many as 34 farmers (92 percent of respondents) reported their buyer’s requirement as fresh meat and these buyers would go on to perform further processing and packaging on their own or utilise specialised processing agents such as Senn Foods and other butcheries. Only 2 farmers reported their customers’ requirement as being meat cuttings while 1 farmer reported packaged pork as customers’ requirement. Farmers therefore, focus mainly on providing animals for slaughter and are not required to engage in further value added activities. The pre-requisite of live animals was reported by 4 farmers (11 percent of respondents). Among these were 2 farmers who produced porkers and 2 other farmers who targeted both the meat market and breeder stock market.

Figure 6: Frequency of respondents by common product pre-requisites


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3.1.7 Marketing and distribution of products

3.1.7.1 Marketing

Figure 7 shows that word of mouth is by far the most relied upon medium of marketing used by the farmers (reported by 60 percent of the respondents). Only 4 farmers (11 percent of the respondents) reported going out to make presentations to potential buyers. Three of these farmers were found to rely solely on this type of marketing while the last one combined this with distribution cards. As the farmers grow their business and form associations or affiliate to the already existing Botswana Pig Producers Association they might find expediency and cost effectiveness in creating a futures type trading platform using electronic and/or print information source which can continuously be updated with their offerings and additional market information for all of the sub-sector’s players with the aim of easing their marketing burden. This strategy would ensure that farmers and their customers can interact and transact with minimal logistical engagement thus cutting down on travel, marketing and advertising costs as it would then be the responsibility of the association to maintain and update such house of information on behalf of the farmers.

Figure 7: Media used by farmers to market their products


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The farmers cited lack of negotiation skills with buyers as the main hindrance in marketing their produce (refer to Table 6). This problem was reported by almost half of the farmers interviewed (17 respondents). Lack of working capital was also an area of concern to farmers (reported by 11 of the respondents) as it impacted negatively on their ability to supply produce consistently commensurate with market demand. This was followed by reported lack of knowledge and experience in marketing (9 of the respondents) and competition from imports. Only one farmer reported unavailability of slaughtering facility as a hindrance in marketing of produce.

The study also found out that 13 of the farmers slaughtered their animals within own farms. Another 8 of the farmers relied on the various municipal abattoirs such as Gaborone City Council, Francistown City Council, Selebi Phikwe Town Council and Meat Inspection Training Centre (MITC) in Lobatse.

Table 6: Problems encountered in marketing produce Problems Responses % Lack of negotiation skills with buyers 17 46 Inconsistent production due to lack of working capital 11 30 Lack of Knowledge and Experience in marketing 9 24 Competition from imports 7 19 Competition from local farmers 4 11 Low Prices 2 5 Price taking 2 5 Unavailability of Slaughter facility 1 3 Non-Adherence to meat industry requirements 1 3 Lack of transport 1 3

NB. The responses and associated percentages are not to be added column-wise due to the fact the above problems were recorded as multiple response options under one question.

3.1.7.2 Distribution of produce

The study found out that 27 farmers distributed their produce by transporting it to their customers or local markets. On the other hand 7 farmers depended solely on collection of produce by the customers while the last 3 farmers engaged both avenues to access their markets. Table 9 provides information on transport used by the farmers for business operations. It can be concluded that transportation resources are generally adequate as most of the farmers (29) have transport at the disposal of their businesses, although 19 of these farmers utilised the same transport for family commitments. One should however, hasten to recall that transportation was identified earlier as a critical cost driver to piggery enterprise. Three of the farmers relied solely on hired transport while 1 farmer combined hired with family transport. One other farmer also relied on family transport as well as having access to borrowed transportation from a friend.


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Table 7: Frequency of mode of transport

Busine

ss tra

nsport

Hired t

ransport

Family

transport

Collect

ion by

custo

mers

Friend

s trans

port

Total

Business transport 10 - 2 - - 12

Hired transport - 3 1 - - 4

Family transport - - 19 - - 19

Collection by customers - - - 1 - 1

Friends transport - - 1 - - 1

37

3.1.8 Sales and prices

The sales reported by the farmers and reflected in Figure 8 were attributable to breeds of large white, landrace and cross breeds only. Suffices to note that the farmers did not report sales of duroc and tswana breeds, which buttresses the thinking that at present these breeds are inconsequential for commercial purposes (however, still noting that the composition of the cross breeds remains a subject of future research interest). Pig and pig products sales have been increasing in the past three years as shown by the increasing trend for all pig breeds. The above figures were used to calculate the average prices for the breeds of pigs (here termed derived average prices).


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Figure 8: Sales, values and derived prices

Table 8: Derived average prices of pigs (Pula per animal) Year

Breed 2006 2007 2008 Large white 333 543 568 Landrace 498 715 613 Cross breed 1017 780 680 All breeds 460 610 615

Trends for the indices of the average prices of pigs taking 2006 as the base year are depicted in Figure 9. Generally the prices were increasing during the 2006 through 2008 period, more so between the years 2006 and 2007 and principally on account the increase in the average price of large white which was increasing throughout the period. Relative to 2006 the average price of landrace increased at a higher rate in 2007 than it did in 2008. On the other hand the average price of cross breeds was on the decline from 2006 through 2008.


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Figure 9: Derived price trends for various breeds in Botswana

3.1.9 Current meat prices reported by the farmers

Average prices of meat as reported by the farmers are presented in Table 8. Baconers are top of the list with an average price of P22.00 per kg followed by piglets and weaners (P19.00 per kg). Porkers and boars fetch P18.00 per kg while sow meat is the lowest priced at P16.00 per kg.

Table 9: Average meat prices at farmgate

Animal Pula/Kg Baconers 22 Piglets 19 Weaners 19 Porkers 18 Boars 18 Sows 16

3.1.10 Business development activities and services

The Ministry of Agriculture (MoA) was found to be the front runner in dispensing business development interventions to the enterprises followed by LEA. A total of 32 enterprises had benefited from various courses run by the MoA. The courses included Introduction to piggery, Piggery Management, Pig Production, Pig Husbandry, Bookkeeping/record Management, Pig Industry, Animal Husbandry, Business Management, and Farm Management. The most commonly attended course was Piggery Management and Piggery Production which were cited by 14 and 8 of the respondents respectively.


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On the other hand 7 farmers reported having benefited other courses, courtesy of LEA, which included, Business Management, Business plan preparation, Entrepreneurship, Marketing, and Quality Standards. The other agencies that had provided training to the piggery farmers were CEDA, Kgalagadi Breweries Limited, Botswana College of Agriculture, Department of Culture and Youth, Pretoria Technikon (RSA) and one unspecified institution in Zimbabwe (refer to Annex 3).


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3.2 Institutions survey

3.2.1 Details of the institutions and their geographical location

A total of 119 institutions were interviewed during the study comprising 38 retailers, 11 restaurants, 66 hotels and lodges and 4 wholesalers. The locations of the institutions that were interviewed are delineated in Table 10. The reason why fewer institutions were seemingly enumerated in Gaborone as compared to Francistown and Maun was that the data were obtained centrally for some of the institutions of holding or multiple branch setup (refer to Table 11).

Table 10: Institutional categories and frequencies

Category of business Frequency Percent Retailer 38 32 Restaurant 11 9 Hotel/Lodge 66 55 Wholesalers 4 3 Total 119 100


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Table 11: Location of institutions covered

LEA Office coverage Location Number of institutions

Francistown Francistown 20

Maun Maun 13

Gaborone Gaborone 12

Mogoditshane 2

Selebi Phikwe Selebi Phikwe 8

Serowe Mahalapye 6

Serowe 3

Letlhakane 5

Rakops 1

Paje 1

Palapye 5

Gantsi Gantsi 5

Kanye Jwaneng 5

Kanye 1

Lobatse 1

Molepolole Molepolole 4

Kasane Kasane 11

Ngoma 2

Lesoma 1

Kazungula 1

Masunga Tutume 2

Tshesebe 2

Gweta 2

Vukwi 1

Masunga 1

Ramokgwebana 1

Sowa 1

Nata 1

Mochudi Rasesa 1

Total 119


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The profile of the respondents that were interviewed in the institutions survey are delineated in Table 12.This table shows that most of the respondents held managerial positions (61 percent of respondents). Among the retailers alone 79 percent of the respondents belonged to management or order handling positions. On the other hand among the restaurants, hotels and lodges and wholesalers respondents who belonged to these same positions were 91 percent, 95 percent and 100 percent respectively.

Table 12: Frequency of interviewees for the institutions’ survey Position of the Respondent Frequency Percent

Manager 41 34 Director 13 11 Assistant Manager 7 6 Food and Beverage Manager 2 2 Chef 23 19 Assistant Chef 3 3 Supervisor 7 6 Owner 1 1 Shop Assistant 3 3 Bookkeeper 1 1 Receptionist 2 2 Block Man 2 2 Sausage Maker 2 2 Butchery Assistant 3 3 Stock Controller 4 3 Cook 1 1 Warehouse Manager 1 1 Distribution Manager 1 1 Operations Controller 1 1 Regional Butchery Manager 1 1 Total 119 100

3.2.2 Current market situation

Table 13 explores the intra-transactions between the institutions as well as their interactions with the farmers. Some 22 retailers were found to have direct links with the farmers where upon they would also become a secondary source of supply to other retailers (26 retailers relied on the aforementioned 22). Presumably, the institutions might have drawn a thin line between the retailers and wholesalers, rather referring to the latter in some instances as retailers as some of them also engage in direct sales to the public. Restaurants on the other hand had no direct dealings with the farmers, rather relying on the retailers as their intermediaries. The same scenario emerged for the hotels and lodges where it was found that 55 percent of them got their pork supplies from retailers. However, as would be expected, the picture changes when one considers the wholesaler arena where all the 4 of them obtained their supplies directly from the farmers. The illustration in Figure 10 (derived from Table 13) depicts the supply chain and the interactions of the players in the pig products market.


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Table 13: Source of Supply for Pork Products Category of business Local Farmers Retailers Imports Retailer 22 26 1 Restaurant 0 11 0Hotel/Lodge 2 65 0 Wholesalers 4 1 2

Figure 10: Interactions of the players in the piggery sub-sector

Table 6: Price Determination Method of Determination Frequency Supplier sets the price 5 Retailer sets the price 4 Negotiations between business and supplier 17 Total 26

3.3.3 Demand and supply of pork produce

The aggregate annual institutional demand for pork products was estimated by the study to be 2,417.945 metric tons valued at P41.385M. On the other hand the total supply in the market as reported by the institutions was 1,758.919 metric tonnes which was valued at P11.139M. This comprised 445.422 metric tons from local suppliers and 1,313.497 metric tons of imports. Therefore, an aggregate annual shortfall of 658.026 metric tons was calculated for the institutions. This shortfall was adjusted for the fact that the restaurants did not disclose their purchases of pork products. The adjusted shortfall was therefore, 630.864 metric tonnes (i.e. about 26 percent of the total demand for pork)

Farmers Wholesalers

Retailers Hotels/Lodges

Restaurants


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3.3.3.1 Demand and supply for the institutions

The bulk of the demand and supply were reported at the wholesaler’s level. The wholesalers require 1,682.322 metric tons of pork annually. Their annual purchases amount to 1,562.657 metric tons which is split into 20 percent of local purchases and 80 percent of imports. The total purchases by the wholesalers only meet 93 percent of their annual demand. The wholesalers therefore, experience an annual shortfall of about 119.666 metric tons annually (refer to Table 14).

The retailers require 512.606 metric tons of pork annually. Their annual purchases were reported to be about 181.368 metric tons. These purchases were mostly done locally (67 percent of the purchases). The retailers experience a shortfall of 331.238 (i.e. 33 percent of demand) annually. The hotels and lodges require 194.855 metric tons of imports annually and their purchases are made locally. The hotels are faced with a shortfall of about 179.961 metric tons (i.e. 92 percent of their demand). The restaurants reported demand of 27.162 metric tons; however, they did not disclose their purchases.

Table 14: Annual demand and supply of pork in Botswana (Metric tons)

Traders

Wholesalers Retailers Hotels and lodges Restaurants Total

Demand 1,682.322 512.606 194.855 27.162 2,416.945

Local purchases 308.2 122.328 14.894 - 445.422

Imports 1,254.457 59.040 - - 1,313.497

Shortfall 119.666 331.238 179.961 27.162 658.026

Adjusted shortfall 630.864


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Table 15 shows that pork ribs are the product of choice demanded by the institutions followed by whole carcass as well as processed products such as bacon, polony, sausages and chops. Looking at Tables 15 and 17 it can be seen that pork ribs, which are in very high demand, are sourced mainly from of imports.

Table 15: Monthly Demand for Pork Products by Institutions

Product Av. Cost Price (P/kg) Volumes (kg) Value (BWP) Pork ribs 35.98 73,046.50 701,671.40Whole Carcass 27.66 46,424.52 1,724,127.49Bacon 51.68 35,908.46 644,427.34Polony 23.04 25,867.20 27,944.39Sausages 34.07 12,225.95 124,995.83Chops 41.86 4,713.10 142,789.65Belly 35.28 1,039.48 27,402.61Fillet 47.84 610.53 9,803.65Ham 50.06 389.24 10,724.81Smoked products 39.00 360.00 7,800.00Leg 36.32 308.05 9,155.27Neck - 160.00 -Salami 38.33 140.00 5,365.64Shoulder 31.90 74.72 2,383.58Gammon 90.00 50.00 6,100.00Kase griller 49.20 48.00 2,372.80Knuckles/rhime/trotters 22.20 26.00 370.70Frank 65.60 20.30 1,331.68Total 201,412.05 3,448,766.84

Table 16: Monthly supply of pork products by local suppliers

Product Av. Cost Price (P/kg) Volumes (kg) Value (BWP) Bacon 58.18 20,708.55 37,266.40Whole carcass 23.66 13,939.00 300,037.95Chops 43.07 1,357.60 5,747.90Ribs 37.18 359.31 12,155.20Sausages 38.84 324.00 11,905.40Smoked products 39.00 200.00 7800.00Polony 32.95 88.00 1,196.00Ham 40.00 80.00 3,040.00Fillet 45.00 40.00 1,800.00Belly 48.00 12.00 576.00Kase griller 48.80 10.00 488.00Total 37,118.46 382,012.85


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Table 17: Monthly import supply of pork products

Product Av. Cost Price

(P/kg) Volumes (kg) Value (BWP) Ribs 27.45 62,562.80 40,725.00 Polony 18.14 24,212.20 3,628.00 Bacon 37.00 10,268.16 377,440.00 Sausages - 8,000.00 - Chops 36.48 1,820.00 66,595.00 Belly 25.95 1,000.00 25,950.00 Leg 44.00 720.00 31,860.00 Smoked products - 400.00 - Fillet - 160.00 -Neck - 160.00 - Ham - 122.84 - Whole Carcass - 32.08 - Total 109,458.08 546,198.00

3.3.3.2 Monthly demand of pork by the institutions

Annex 5 shows that the bulk of the demand for pork products was from the wholesalers (70 percent). This was followed by the retailers whose demand accounted for 21 percent of the institutional demand, while the hotels (and lodges) and restaurants had monthly demand of 8 percent and 1 percent respectively.

The demand from the retailers was largely for whole carcass (79 percent), presumably for further processing into the various products (refer to Annex 4a). On the other hand the demand from the restaurants comprised largely of pork ribs which constituted 46 percent followed by bacon with 28 percent (refer to Annex 4b). Similarly in respect of the hotels and lodges the demand comprised largely of pork ribs taking 42 percent followed by bacon 18 percent. Whole carcass, pork chops and sausages were next with 12 percent, 10 percent and 10 percent respectively (refer to Annex 4c). Almost half of the bulk of the demand that went to wholesalers, as mentioned above, was for pork ribs (46 percent). Bacon and polony were also high on the priority list of the wholesalers as they constituted 20 percent and 17 percent respectively (refer to Annex 4d).


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3.3.3.3 Monthly supply of pork products to institutions by local suppliers

Annex 5 shows that 69 percent of the local purchases of pork are made by the wholesalers. On the other hand retailers and hotels (and lodges) respectively contributed 27 percent and 3 percent of the local purchases. Restaurants reported no purchases going towards local suppliers.

Among the retailers most of the local purchases (93 percent) were for whole pork carcass (refer to Annex 5a). On the other hand hotels and lodges purchased mostly processed pork from local suppliers. Annex 5b shows that their purchases comprised 34 percent, 23 percent, 19 percent, 9 percent and 6 percent of bacon, pork sausages, ribs, pork chops and ham respectively. Wholesalers’ on the other hand had a limited range of products purchased from local suppliers. Their purchases were reportedly highest on bacon (78 percent) than any other product and this was followed by whole carcass and pork chops with 17 percent and 5 percent respectively.

3.3.3.4 Monthly supply of imports to institutions

Out of all the monthly imports reported during the study, 96 percent were made by wholesalers while the remaining 4 percent was attributable to retailers. Annex 6a shows that the retailers imported a wide range of pork products notably bacon (36 percent of retailer imports), pork chops (19 percent), pork leg (15 percent), pork ribs 12 percent and smoked products 8 percent. As mentioned above the bulk of the imports were reported by wholesalers. Most of these wholesalers’ imports were pork ribs (59 percent), polony (23 percent), bacon and sausages (8 percent each).

3.3.3.5 Purchases and prices

According to most of the institutions who responded on the question of price determination (17 out of 26 who purchase pork products from local farmers and retailers) the price of produce is set through their negotiations with the suppliers. Four of the institutions indicated that they are just price takers, i.e. adhering to the prevailing retail prices. Out of the aforementioned 26 institutions 23 of them indicated that they purchase pork in carcass form while 2 purchased live animals and 1 purchased processed meat. This is an intersting finding considering that most of the farmers cited cited lack of negotiation skills to engage their customers in price setting.

In respect of the institutions that source produce from local farmers it was found that most of the institutions (18 out of 26 respondents) depended on the farmers to deliver while 7 institutions collected pork produce from abattoirs. This is consistent with the finding from the farmers survey where it was reported that the farmers transport their produce to their markets (or customers). Only 1 institution went as far as the farmgate to collect produce. Most of these institutions purchased unprocessed pork in whole carcass form (23 out of


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the 26 aforementioned respondents) and 24 of them paid their suppliers within 30 days of delivery (this includes 9 who pay on the spot upon delivery). Only 13 institutions had contracts with their suppliers 9 of which were written contracts while the other 4 were verbal. The suppliers referred to here were farmers for 10 of the institutions and wholesalers for the remaining 3. All contracts with the wholesalers were formal written supply contracts. The most preferred breed for institutional buyers of pork was landrace. The farmers also seem to be cognizant of this fact as it was found in the farmers survey that this breed comprised the better part of the pig population in the country.

3.3.3.6 Traders value added pre-requisites

The study found that most of the institutions require fresh pork (86 percent of the respondents). Only 27 percent of the traders required packaged and labelled pork products. Packaged pork alone was required by 17 percent, while labelling was demanded by 13 percent of the traders. On the other hand packaged, labelled and coded pork was required by 15 percent of the traders. Therefore, only a few traders require farmers to package, most of the traders prefer to buy fresh pork from the farmers and proceed to package and label it according to their own specifications.

Table 18: Product presentations required by traders Pre-requisite No. of Institutions PercentFresh Pork 102 86 Packaged and Labeled 32 27 Packaged 20 17 Packaged, Labeled and Coded 18 15 Labeled 15 13No Packaging Required 3 3 Live Animals 1 1 Bar-Coded 1 1

3.3.3.7 Quality of pork supplied by local producers

Most of the traders are satisfied with the quality of pork supplied by local producers. In this respect Table 19 shows that 72 percent of the respondents viewed the quality from locals as excellent or good. This comprised 42 percent hotels and lodges, 23 percent retailers, 6 percent restaurants and 1 percent wholesalers. In addition to these traders a further 16 percent rated local producers as supplying pork of acceptable quality. These comprised of 8 percent hotels and lodges, 6 percent retailers, and 1 percent each of restaurants and wholesalers. Therefore, 88 percent of the traders were content with the quality of pork supplied by local farmers. Of the remaining 12 percent, only 3 percent were unhappy with the quality of pork supplied by locals while 9 percent either said they were


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not in a position to judge the quality of local pork or they simply did not respond to the question.


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Table 19: Perceptions of the traders on the quality of pork supplied by local farmers Category of business

Perception on quality Retailer Restaurant Hotel/Lodge Wholesalers Total PercentGood/Excellent 27 7 50 2 86 72 Acceptable quality 7 1 10 1 19 16 Poor Quality 2 0 0 1 3 3 Unable to rate 2 2 5 0 9 8 Total 38 10 65 4 117 98

The most important consideration for the traders preference of suppliers was better quality (61 percent of the respondents). This was followed by reasonable pricing, consistency in supply and adherence to agreed delivery timelines with 43 percent, 36 percent and 36 percent respectively. Presentation of packaging, diversity of products and contract supply were preferred by 27 percent, 26 percent and 21 percent of traders respectively. The rest of the considerations for preference of suppliers are delineated in Annex 7.

4 Conclusions and recommendations

4.1 Conclusions

The following conclusions and recommendations are based on the above findings as well as the background information for purposes of this study.

6.1.1 On a general level the study concludes that the piggery sub-sector, though still at infancy compared to the beef and the poultry, is growing and has potential for further growth if it continues to receive consideration of LEA’s interventions such as the LEA cluster formation programme. LEA’s focus on the sub-sector can catapult it to provide the much desired diversification of the agriculture sector and the economy of the country at large.

6.1.2 Pork is the worlds leading choice meat and its demand will increase globally in the future as a result of the growth in the per capita consumption as well as the continuing growth in the world population. However, before the local producers can begin to target international markets they still have opportunity at their doorstep as there exists an annual shortfall of about 630.864 metric tons of pork products to satisfy the demand of the local institutions. However, prohibitive feed costs are reported to be a limiting factor to the endeavors of the local farmers to raise production. Interventions to alleviate the burden of feed costs should therefore, be pursued to ensure that the piggery sub-sector realises its potential for diversification of the economy of the country.


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4.1.3 Piggery enterprise was found to be a growing business undertaking in the country as shown by the increasing number of establishments over the years. This enterprise was found to be more popular in the Ramotswa region, and other places on the eastern side of the country such as Molepolole, Kanye, and Mochudi. Piggery enterprise was also found to be popular in Serowe and areas in its vicinity. These areas present a comparative advantage to justify their high priority status in the scheduling of cluster formation initiatives by LEA. Most of the farmers target pork production leaving a window of opportunity in the industry for specialised breeding farmers.

4.1.5 Alongside feeds, salaries and wages, transportation was found to be one of the main cost drivers to the pig enterprise operators. Additionally most of the farmers are burdened with individual transportation of their produce to reach the markets and their customers.

4.1.6 Large white breed of pigs was found to be the most commonly kept among farmers as well as being the breed of choice for those institutions that were breed specific in their demand for pork products.

4.1.7 Most of the farmers were found to be focused on producing animals to be slaughtered to provide fresh meat to processing agents in the industry. No farmers were found to be focused solely on breeding of animals for sale to other farmers. Opportunity in this area needs to be explored further by with possibility of entry of new entrepreneurs who will be assisted by LEA.

4.1.8 A number of organisations were cited by the farmers as their providers of business development services. Most of the services were found to have been provided by LEA and MoA. Overlaps in the content of the courses were observed between the organisations and therefore, these organisations could collaborate to harmonise their interventions to create synergy of their business development services for the benefit of the farmers in a more coordinated manner. Other organisations that were cited were CEDA and Department of Culture and Youth.


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4.2 Recommendations

4.2.1 LEA should continue to promote development of the piggery sub-sector through cluster formation in view of the domestic market opportunity (as evidenced by supply demand gap) with a longer term goal of making inroads into the expanding international pork markets. The cluster formation programme should continue in the Southeast to take advantage of the comparative advantage provided by the high business activity level in the area.

4.2.2 LEA should work with the Department of Animal Production, specifically Pig Development Section as well the Department of Agriculture Research in the Ministry of Agriculture to embark on research for improved pig and cheaper feeds that can be produced locally to reduce feeding costs to the farmers. LEA and the Ministry of Agriculture should utilise the research results in promotion of raw materials producing enterprises such as feed-growing farmers to be linked with feed formulators (e.g. Nutri feeds) as part of its cluster development programme.

4.2.3 LEA should, as part of its Business Opportunity Department, explore further the business opportunity in respect of breeder farmers. These farmers can be linked with the Department of Agriculture Research to provide improved quality breeder stock to the pork producing farmers in the country.

4.2.4 LEA, MoA, CEDA and Department of Culture and Youth should work together to create a coordinated national pigs sub-sector development programme.

4.2.5 LEA should sell the idea of creation of a pig produce futures market to the Botswana Pig Producers Association to link the suppliers of inputs, producers and their wholesale and retail customers. Established collection produce points also need to be established which will benefit the farmers by way of cutting down on transportation costs.


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5 Literature cited Donald E. Orr Jr., Yingran Shen (2006). World Pig Production, Opportunity or Threat? Midwest Swine Nutrition Conference.

Leo Den Hartog (2005). Global Perspective on Integrated Pork Production.

Luciano Roppa (2005). Competition from South American Pork Production, www.thepigsite.com (Accessed on 24/09/09).

Ministry of Agriculture (2009). Pig Development Section Annual Report.


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Annex 1: Location of farmers enumerated

LEA Office Coverage Total Locality Number

Francistown 5 Gulushane 1 Borolong 1 Tholotsane 1 Matshelagabedi 1 Ditadi 1Gaborone 1 Kolobeng 1Kanye 3 Kanngwe 1 Moshaneng 1 Lerolwane 1Masunga 2 Tshesebe 1 Sebina 1Maun 1 Tshanakuna 1Mochudi 9 Magothoadisa 1 Mmokolodi Farms 1 Mmokolodi 1 Thapadiata 1 Malotwana 2 Bokaa 1 Tlhagala 1 Matebele 1Molepolole 2 Phiring 1 Maatlagatse 1Ramotswa 4 Ramotswa 1 Bojanpswa 1 Lephaleng 1 Mogobewakgomo 1Selebi Phikwe 5 Tapalaphala 1 Selibe Phikwe 1 Selokwana 1 Mokgotshwe 1 Majweng 1Serowe 5 Sepalamoriri 1 Kolokome 1 Tapalakgomo 1 Mosikari 1 Morale 1


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Total 37

Annex 2: Production problems faced by the farmers

Production problems Responses %

High Feed Costs 31 84

Lack of working capital to run the enterprise efficiently 18 49

High fuel costs 9 24

Lack of local feed suppliers 9 24

Shortage of Skilled labour 9 24

High infrastructure maintenance costs 6 16

Pests and Diseases 4 11

Don't have enough knowledge and experience 4 11

High water bill costs 2 5

Harsh Weather Conditions 2 5

Pig Mortality 2 5

Direct payment of suppliers by financiers 1 3

Inadequate Support services 1 3

Unavailability of land for expansion 1 3

Unproductive Stock 1 3

Unavailability of water on site 1 3

Lack of production skills 1 3

Low Quality feeds from local suppliers 1 3

High transport Costs 1 3


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Annex 3: Training courses received by farmers

Zimbabwe RSA KBL (Unspecified Youth and (Pretoria

Training/Course MOA (Kick Start) Provider) CEDA Culture LEA BCA Technikon) TotalAnimal Husbandry 1 0 1 0 0 0 0 0 2Artificial insemination in Pigs 0 0 0 0 0 0 0 1 1Book Keeping/Records Management 3 0 0 0 1 0 0 0 4Business Management 1 1 0 1 0 1 1 0 5Business Plan Preparation 0 0 0 0 0 2 0 0 2Customer Service 0 0 0 1 0 0 0 0 1Entrepreneurship 0 0 0 0 0 1 0 0 1Farm Management 1 0 0 0 0 0 0 0 1Human Resources Management 0 0 0 2 0 0 0 0 2Introduction to piggery 2 0 0 0 0 0 0 0 2Marketing 0 0 0 0 1 1 0 0 2Pig Husbandry 3 0 0 0 0 0 0 0 3Pig production 6 0 0 0 0 0 2 0 8Piggery Management 13 0 0 0 1 0 0 0 14Quality Standards 0 0 0 0 0 2 0 0 2Small Stock Production 0 0 0 0 0 0 0 1 1Pig Industry 2 0 1 0 0 0 0 0 3Total 32 1 2 4 3 7 3 2 54


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Annex 4: Monthly demand for the institutions

Annex 4a. Retailers monthly demand

Product Average Cost Price

(P/kg) Volumes

(Kg) Values (BWP)

Whole carcass 22.75 33,873 1,582,222.69

Bacon 42.13 3,818 149,722.60

Polony 20.81 1,692 24,862.04

Ribs 30.82 1,226 43,396.20

Chops 33.88 735 27,765.00

Sausages 25.32 423 10,537.00

Fillet - 400 -

Smoked products 39.00 360 7,800.00

Neck - 160 -

Knuckles/rhime/trotters 7.45 20 149.00

Kase Griller 48.80 10 488.00

Total 42,717 1,846,942.53

Annex 4b. Restaurant monthly demand of pork


(P/kg) Volumes

(Kg) Value (BWP)

Ribs 35.14 1,041 34,260.87

Bacon 52.75 641 23,994.68

Chops 45.45 190 7,551.00

Sausages 37.44 150 4,962.48

Whole carcass 40.48 142 6,028.00

Polony 16.08 41 623.95

Kase Griller 49.60 38 1,884.80

Frank 65.60 20 1,331.68

Total 2,264 80,637.46


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Annex 4c. Hotels and lodges monthly demand of pork


(P/kg) Volumes

(Kg) Value (BWP)

Ribs 37.96 6,817 544,659.33

Bacon 54.27 2,942 170,710.06

Whole carcass 46.68 1,944 58,376.80

Chops 43.38 1,688 84,118.65

Sausages 35.15 1,631 49,496.35

Leg 34.88 308 9,155.27

Ham 48.69 266 10,724.81

Fillet 47.84 211 9,803.65

Salami 38.33 140 5,365.64

Polony 26.46 122 2,458.40

Shoulder 31.90 75 2,383.58

Gammon 122.00 50 6,100.00

Belly 39.95 39 1,452.61

Knuckles/rhime/trotters 36.95 6 221.70

Total 16,238 955,026.85

Annex 4d. Wholesalers monthly demand


(P/kg) Volumes

(Kg) Value (BWP)

Ribs 25.48 63,963 79,355.00

Bacon 30.00 28,508 300,000.00

Polony - 24,012 -

Whole carcass 17.25 10,465 77,500.00

Sausages 19.00 10,022 60,000.00

Chops 25.95 2,100 23,355.00

Belly 25.95 1,000 25,950.00

Ham - 123 -

Total 140,194 540,210.00


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Annex 5: Monthly supply of pork to institutions by local farmers Annex 5a. Retailers' monthly supply of pork products by local suppliers

Products Average cost price

(P/kg)Volume

(kg) Value (BWP)

Whole carcass 21.36 9,439 219,057.95

Bacon 39.16 284 8,756.40

Smoked products 39.00 200 7,800.00

Ribs 34.95 96 3,355.20

Polony 12.95 80 1,036.00

Chops 22.22 45 1,000.00

Sausages 34.95 40 1,398.00

Kase Griller 48.80 10 488.00

Total 10,194 242,891.55

Annex 5b. Hotels and lodges' monthly supply of pork products by local suppliers


(P/kg) Volume

(kg) Value(BWP)

Bacon 62.57 425 28,510.00

Sausages 39.22 284 10,507.40

Ribs 37.92 240 8,800.00

Chops 47.23 113 4,747.90

Ham 40.00 80 3,040.00

Whole carcass 58.00 40 2,320.00

Fillet 45.00 40 1,800.00

Belly 48.00 12 576.00

Polony 20.00 8 160.00

Total 1,241 60,461.30


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Annex 5c. Wholesalers' monthly supply of pork products by local suppliers


(P/kg) Volume

(kg) Value (BWP)

Bacon - 20,000 -

Whole carcass 18.00 4,460 78,660.00

Chops - 1,200 -

Ribs - 23 -

Total 25,683 78,660.00


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Annex 6: Monthly import supply of pork products to institutions

Annex 6a. Retailers' import supply of pork products

Product Average cost price

(P/kg) Volume

(kg) Value (BWP)

Bacon 44.00 1,760 77,440.00

Chops 47.00 920 43,240.00

Leg 44.00 720 31,860.00

Ribs 28.95 600 17,370.00

Smoked products - 400 -

Polony 18.14 200 3,628.00

Fillet - 160 -

Neck - 160 -

Total 4,920 173,538

Annex 6b. Wholesalers' import supply of pork products

Product Average cost price

(P/kg) Volume

(Kg) Value (BWP)

Ribs 25.95 61,963 23,355.00

Polony - 24,012 -

Bacon 30.00 8,508 300,000.00

Sausages - 8,000 -

Belly 25.95 1,000 25,950.00

Chops 25.95 900 23,355.00

Ham - 123 -

Whole carcass - 32 -

Total 104,538 372,660.00


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Annex 7: Preference of traders to suppliers

Reasons No. of institutions Percent Better Quality 73 61 Reasonable Prices 51 43 Consistency of Supply 43 36 Delivery Times 43 36 Presentation of Packaging 32 27 Diversity of Products 31 26 Contract Supplier 25 21 Terms and Conditions of Supply 22 18 Lower transportation costs 19 16 No alternative Supplier 11 9 Easy access to farms 8 7 Company Policy 8 7 Reliability 4 3 Able to meet supply specification 3 3 For Hygienic and health reasons 3 3 Producer and Retailer 3 3 Processed Products not available Locally 2 2 Good Customer Service 2 2 Have Marketed/Advertised to us 2 2 Economic Benefit 1 1 Supplier offers credit facilities 1 1

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