Meat Board in competitiveness agenda
…as study reveals industry loopholes needing urgent plugging
By Hilary Mare
FOLLOWING a competitive analysis of the Namibian Meat Industry, the Meat Board of Namibia (MBN) has implored all stakeholders in the Namibian meat industry under the auspices of the Ministry of Agriculture, Water and Forestry to meet to address the shortcomings and formulate new strategies to position the meat industry five years ahead.
The analysis was specifically the meat export value chains versus the livestock export value chains and versus major exporting countries of the world such as Uruguay, Australia, New Zealand and South Africa.
The study was conducted by Optimal Agricultural Business Systems, a group of reputable independent agricultural economists.
“Such an exercise to restore fundamentals in economic growth (GDP) is not new and occurs on a regular basis in most meat exporting nations. Areas to focus on should be the export of beef from north of the Veterinary Cordon Fence, developing the correct policy mix (strategies) to enhance local value addition without eroding the primary sector, and implementing a post drought recovery strategy, amongst others by not interfering with the market channel,” the Board said in its latest bulletin.
The study modelled the financial benefits to be accrued to the agricultural GDP if local slaughter and finishing of livestock could be achieved.
The study shows that an increase of 100 000 marketable animals in the NCA and a 10% carcass price increase, improved carrying capacity (10% increase in production) for NCA and SVCF and a shift from weaner production towards ox production could increase the livestock sector’s contribution to GDP by N$914 million, resulting in an increase of 23%.
“It is thus of crucial importance that beef produced in the NCA could be exported to financially viable markets and that the Green Scheme projects of AgriBusDev produce fodder for feedlot weaners in Namibia,” said the Board.
Discussing some of the outcomes of the study that require attention, the Board noted that the study also compared the reference countries in terms of number of cattle, total tons exported (excluding live) and total value of exports. In essence, Australia contributes 41% to the total number of cattle but contributes 58% to total export volume (excluding live animals) and 61% of the total export value (excluding live animals). On the other hand, Namibia contributes 4% to the total number of cattle but only 0.7% to total export volume (excluding live animals) and 0.5% of total export value.
The study further compared the countries in terms of number of sheep, total tons exported excluding Australia contributes 55% to total number of sheep, 51% to total export volume (excluding live animals) and 49% of the total export value (excluding live animals). Namibia contributes 2% to total number of sheep but only 0.4% to total export volume (excluding live animals) and 0.3% of total export value. New Zealand has only 21% of the total number of sheep but contributes 47% to export volume (excluding live animals) and 49% to total export value (excluding live animals).
“Of importance is the quality margin of products which reveals the level of advancement of factor endowments, technologies and capabilities used in the production thereof. When supply is competitive, higher prices are generally associated with higher quality and greater product differentiation. The variance in the unit price of goods signals opportunities for countries to upgrade quality and to grow faster,” the Board noted.
In this regard the study provided a broad comparison of Namibia’s quality margin in terms of the quality of exports; reflected by the average unit price for the three meat categories from Namibia versus the four reference countries in 2017. The results show that fresh/chilled beef is a higher value product than frozen beef and sheep meat. In this category, Namibia compares average with the other peer countries.
“In terms of frozen beef and sheep meat, Namibia average unit value is relatively low; hinting at a lower perceived value in its export markets.”