1. International Competitiveness of Botswana’s beef industry Tebogo B. Seleka Pinkie G. Kebakile Botswana Institute for Development Policy Analysis

2. Outline Introduction Measuring international Competitiveness Results -Against SADC countries -Against leading beef exporters Factors underlying Botswana’s beef industry competitiveness

3. Introduction Beef industry in Botswana plays a key role in the economy. -It accounts for a large proportion of agricultural value added. -It is the second leading source of export revenue after minerals. -It is one of the key sources of livelihood among rural dwellers – as a source of income and employment (including self-employment).

4. However; -Its share of agricultural value added has declined over time.

5. - Beef exports have declined

6. Measuring international competitiveness RCA1 ij = x ij /x nj RCA2 ij =(x ij /x nj )/(x ik /x nk ) RCA3 ij =(x ij -m ij )/(x ij +m ij ) NP ij =(x ij -m ij )/p ij PC ij =p ij /c ij - RCA=Revealed comparative advantage, x= exports, m=imports, I= country I, j = beef, k= all agricultural commodities, n=set of countries (SADC or leading beef exporters), NP = ratio of net trade to production, PC=ratio of production to consumption, p = production, c= consumption.

7. Results: Botswana more competitive than SADC countries but its competitiveness has decline over time – RCA2

8. Ratio of net trade to production

9. Ratio of production to consumption

10. Botswana Compares well with leading beef exporters by its relative competitiveness has declined over time: RCA2

11. Ratio of net trade to production

12. Ratio of production to consumption

13. Factors underlying competitiveness: Supply-side factors – cattle population

14. Poor productivity indicators -Mortality rates averages 12 percent in communal system – although they have improved over time -Off-take rates averaged 8 percent under communal arrangements -Calving rates averaged 57 percent and have stagnated over time. -Cattle prices declined consistently from 1974 to 2006. -Disease outbreak (FMD). -Recurrent drought

15. Demand-side factors – increasing domestic demand for beef – Cattle sales for export slaughter declined from 80 to 40 percent

16. BMC throughput declined two fold from 1984 to 2012

17. Institutional factors: one channel export marketing through the BMC a threat to industry sustainability

18. Preference erosion in the EU market due to future policy reforms.

19. Conclusions Botswana’s beef industry is more competitive than other SADC countries, but compares well with leading beef exporters. Declining competitiveness levels are due to low and stagnant productivity. Increasing domestic demand for beef in Botswana, which has resulted in declining exports. Future threats include single channel export marketing and possible preference erosion in the EU market.