A preliminary review of regulatory constraints affecting pig industry in Zimbabwe

J Mutambara

University of Zimbabwe, Department of Agriculture Economics and Extension,
P.O Box MP 167, Harare, Zimbabwe.
jmutambara@agric.uz.ac.zw

Abstract

This study was carried out to provide a preliminary analysis of the status of pig industry in Zimbabwe and regulatory constraints to production and marketing using a value chain approach. The study used literature and secondary data from stakeholders and service providers, as well as, primary data collected through key informant interviews and focus group discussions with stakeholders and services providers. Data were analyzed mainly by value chain mapping and descriptive statistics which summarized data into meaningful form for the purpose of this study.

Key players and service providers in the pig industry played various roles from input supply, production, processing until the product was available to domestic and international consumers. Pig production has been going down over time from a record high of 20000 sow units in 2007 to about 10000 sow units in 2010. Despite this, slaughter figures were going up from 80000 pigs in 2007 to about 100000 pigs in 2010, indicating the possibility of farmer scaling down operations due to economic challenges they were experiencing in Zimbabwe. Farm production was performing below theoretical standards in areas such as litter size, litter per year, farrowing rate, dead weight feed conversion, mortality rate and age at 90 kg weight. Pork production was further threatened by weak demand for meat estimated at 8.7 kg per capita. Key regulatory constraints identified were import duty policy (94%), weak public service (93%), GMO policy (90%), border protocols (90%), unfair trade practices (dumping, import of GMO finished products, illegal imports) (90%), informal stock feed supply (73%), costly environmental management regulations (73%), information asymmetry (70%), cumbersome drugs and vaccine laws (63%), enforcement of health and safety standards (57%), costly ASF certification (51%) and costly labour laws (51%). It is thus evident from this study that there is a need for a serious regulatory review in order to ensure the smooth running of business in the pig industry in Zimbabwe. It is recommended that further detailed research and inquiry be made around the various regulatory issues identified to provide hard evidence on the impact of such operating environment on the performance of the industry. With this evidence, stakeholders will be more equipped to carry out evidence based lobbying and advocacy for a favorable policy environment that will see growth and development in the pig industry.

Key words: advocacy, chain, demand, evidence, lobbying, stakeholders, value

Introduction

Agriculture occupies a central role in Zimbabwean economy contributing: between 14 and 18 per cent of Gross Domestic Product (GDP), over 40 per cent of national exports, 60 per cent of raw materials to agro-industries, and providing livelihood to over 70 per cent of the population, as well as, employment for some one-third of those in the formal labour force (MoAMID 2010). This makes the agricultural sector very important in reduction of poverty and food insecurity. Zimbabwe’s livestock sector is a key pillar in the agricultural industry and the economy at large contributing over 20% of the total agricultural production in the country. It is estimated that in Africa, livestock-derived food items (meat, milk and eggs) alone contribute on average more than 30% to agricultural GDP (Aldo et al 2010). According to Peden et al 2009, livestock are kept for various uses including draught power, milk, meat, eggs and various cultural uses. They compliment cropping activities through the provision of manure for soil fertility maintenance, draught power for cultivation, transport, cash and food. According to Bossio (2009), livestock also offer opportunities for risk coping, farm diversification and intensification besides providing significant livelihood benefits. 

The major livestock products in Zimbabwe are beef cattle, dairy, poultry, pigs, goats and sheep. In rural areas, 50-60% of the households own cattle, 70-90% own goats, and over 80% own chickens.  Small-scale farmers own most of the cattle (90%), goats (98%) and pigs (80%) as important sources of animal protein, draught power, income and social safety net during emergencies, especially drought (MoAMID 2010). Therefore, increasing livestock production is also very important in reducing poverty and food insecurity in the country. 

Over years, Zimbabwe has experienced significant decrease in agricultural production and exports. Agriculture GDP decreased from approximately 21% in 2001 to less than 10% in 2008. Between 2002 and 2005, cattle population on large-scale farms declined from about 25% to less than 13% of the national herd and in 2009, it further decreased to less than 1%. Dairy herd also declined from 104483 in 1994 to 43159 in 2004 and to 22000 in 2009 resulting in a decline in milk production (Anseeuw et al 2011) and the national sow unit decreased from over 18000 to just 8000 between 2001 to 2008 (PIB 2010).  By 2009, the livestock population of Zimbabwe consisted of 5.1 million beef cattle, 21689 dairy, 397800 sheep, 3.2 million goats and 202234 pigs (MoAMID 2010). Moyo (2012) in http://www.citypress.co.za/business/zims-land-policy-bears-fruit-20120915/ argued that the decline in crop and livestock production and yields was largely due to the shortages of inputs that affected all the categories of farmers, rising input costs, and inadequate credit, incomes, savings and wage remittances. The low yields are also due to the increasing frequency of droughts. 

The FAO projections in food demand suggest that food demand will increase by almost 50% towards 2050 (FAO 2003). This is in line with the expected increase in population over time; the past 100 years have seen the world’s human population increasing by nearly fourfold (UN 2007) and it is projected to increase from 6.7 billion (2006) to 9.2 billion by 2050. To increase crop and livestock production in line with increasing demand for food, three primary factors should be considered and these are; increased cropland and rangeland area (15% contribution in 1961–1999); increased yield per unit area (78% contribution); and greater farming intensity (7% percent contribution) (FAO 2006). Thus, for food production to keep pace with population’s demand there is a need to invest in more efforts to increase yields, continued expansion of cropland by conversion of natural habitats, or by optimizing food or feed energy efficiency from production to consumption.

Prompted by the need to strategically position themselves in the meat industry, especially after economic stability brought about by dollarization and formation of government of national unit by early 2009, stakeholders in the livestock industry in Zimbabwe have been airing several views in various fora about critical issues that could hamper competitiveness, growth and development in the sector. Simply defined, competitiveness is the ability of a firm or a nation to offer products and services that meet the quality standards of the local and world markets at prices that are competitive and provide adequate returns on the resources employed or consumed in producing them (http://www.businessdictionary.com/definition/competitiveness.html). Competitiveness is affected by both endogenous (capacity/ability, key factors of production such as climate, land, capital, labour and technology, efficiency of farm operation, sustained quality production, etc.) and exogenous factors (policy environment, services, market demand, prices, market access, infrastructure development, research and development, etc.). In addition, there are also factors of a regulation nature such as permits, licenses, levies, that affect the competitiveness of agricultural producers in particular. For farmers to be competitive, the bureaucratic process for marketing needs to be efficient and free from excessive corruption since officials have the power to use delaying tactics or rent seeking behaviour. It must be recognized that agriculture has important forward and backward linkages to the local economy on both the production and the consumption sides, which affect the ability of farmers to compete through reaching the markets. 

This study focused on external regulatory factors affecting pig industry in Zimbabwe in order to assist stakeholders in strategizing for industry development. The evidence produced from this work will be useful to various key stakeholders in the industry in terms of issues they need to deal with externally with reference to regulatory authorities. Evidence on external regulatory constraints will be useful to key stakeholders as instruments for lobbying and advocating for favourable policies that will see the industry improving its performance in the local and international markets.

Materials and methods

This study was carried out in Zimbabwe and major elements of the study were stakeholders and service providers in the pig industry. The key stakeholders considered included commercial pig farmers, pig breeders such as Pig Industry Board (PIB) and other individual breeders, stock feed manufacturers, abattoirs, processors and butcheries (wholesale and retail). Service providers consulted were Ministry of Agriculture Mechanization and Irrigation Development (MoAMID)’s meat inspectors, animal health service providers and farmer organizations such as Pig Producers Association of Zimbabwe (PPAZ), and Livestock and Meat Advisory Council (LMAC) of Zimbabwe among others. 

The study used literature and secondary data from stakeholders and service providers, as well as, primary data collected through key informant interviews and focus group discussions with stakeholders and services providers. Stakeholders were asked to identify and jointly prioritize by scoring constraints using a well defined criterion that considered expected impact and risk, action required, responsible organization, time dimension, and resources required. Data were analyzed mainly by value chain mapping and descriptive statistics which summarized data into meaningful form for the purpose of this study.

Results

 Key players and service providers in the pig industry value chain 

The study revealed that there are key players and service providers in the pig industry in Zimbabwe working as a network of interconnected units to ensure delivery of pork and pork products for consumption in the domestic and international markets. The value chain consists of input supply, producers, feed manufacturers, abattoirs, processing wholesalers, retailers and consumers. Service providers include other players who facilitate activities along the value chain to ensure product delivery such as farmer organizations (LMAC and PIB), veterinary services, health inspectors and others. Details of the various players and service providers are indicated in Figure 1.

Figure 1. Pig industry value chain (USAID 2010)

 Players in the Pig Industry in Zimbabwe  

Input supply sector provides the various inputs needed in the pig industry, these include pig breeders, feed manufacturers and veterinary services. Production sector consists of a few large-scale commercial farmers (such as Gilt edge, Davenport, Tripple C), a number of medium-scale producers and numerous small-scale semi substance producers. Abattoirs are registered slaughter facilities, operating in accordance with given standards that buy and slaughter livestock from farmers for a price based on the dressed weight and grade. They sell raw and processed pork meat to wholesalers and retailers. The largest abattoir in the country is Colcom Foods Limited, a grade A abattoir (slaughtering over 100 pigs day) which is export-rated with capacity to slaughter and process 5,000 pigs per week. Colcom Foods Limited employs a strategy of backward and forward vertical integration into pig production, processing, wholesale and retail besides abattoir facility.  Other abattoirs such as Koala, Montana Meats, Caswell Meats and Surrey (Meat Graders data base) are into pig and other livestock slaughtering for retail customers. In addition, there are numerous, unregistered and small slaughterhouses providing pig meat at irregular times for the fresh meat market. Wholesale and retail sectors of pork consists of numerous butcheries and numerous supermarkets who buy mainly processed (tinned, beacon, polony, chops, ribs, sausages etc.) pork from Colcom Foods Limted and mainly raw pork from other abattoirs for sale to consumers. Besides key player as indicated in the value chain, there are service providers who include PIB, Veterinary services, Meat graders, farmer organizations, stakeholder organizations (LMAC, PPAZ), transporters and cash providers and others who play several facilitation roles along the commodity chain. 

Pig Production in Zimbabwe 

Pig production has been fluctuating over the past decade. Zimbabwe national commercial sow herd peaked at nearly 20000 sows in 2007 from 15500 in 2005, then declined by half to about 8000 in 2008 (USAID 2010). To date, pig numbers are believed to be rising steadily and estimated to be about 10000 sow herd (Figure 2). These figures exclude the pigs in the smallholder sector, which are estimated to comprise about 80% of the total pig population in Zimbabwe with the main function of ensuring food security and as a store of wealth with a very low off take.

Figure 2. Trends in National sow herd

Currently, the industry supplies approximately just above 100000 animals per year for slaughter and processing, equivalent of about 5000 MT of meat according to Meat graders data base. This is a major increase from a record low of 40000 animals in 2008. Figure 3 shows the slaughter figures over time.

Figure 3. Annual slaughter of pigs

Classification of pork produced

According to DRSS Meat Grading  database, the classification of pig meat produced by Zimbabwe’s registered pig abattoirs was as follows-: over 50% porkers, 30% baconers and 20% other classes (under porkers, general and manufacturing classes). There has been an increase in the proportion of porkers and a decrease in the proportion of baconers over the years as shown on Figure 4.

Figure 4. Classification of slaughtered pigs

Productivity at farm level versus theoretical standards

Results show that farm production was performing below theoretical standards in areas such as litter size, litter per year, farrowing rate, dead weight feed conversion, mortality rate and age at 90 kg weight mainly for small and medium-scale farmers (Table 1). 

Demand for meat in Zimbabwe 

It is estimated that overall meat demand is currently between 6000 and 7000 MT per month, with beef demand around 1000 MT, chicken 3500 MT, and other meats, pork inclusive 2000 MT (USAID 2010). Prior to the hyperinflationary environment period (2001-2008), meat consumption in Zimbabwe was estimated to be 8000 to 10000 MT per month: 4500 MT of beef, 2500 MT of chicken, and 3000 MT of pork, fish, goat, sheep and other poultry. The proportionate demand for pork and other meats is believed to have declined by 20% after 2008 compared to before hyperinflationary environment (USAID 2010). In general, assuming a population size of nine million people, Zimbabwe’s per capita meat consumption is about 8.7 kg per year.

Regulatory constraints in pig value chain

Stakeholders identified key regulatory constraints such as import duty policy, weak public service, GMO policy, border protocols, unfair trade practices (dumping, import of GMO finished products, illegal imports), informal stock feed supply, costly environmental management regulations such as waste management requirements, information asymmetry, drugs and vaccines laws, health and safety standards (slaughter conditions), costly ASF certification and costly labour laws in order of decreasing importance. Figure 5 provides details of the prioritized regulatory constraints in pig value chain.

Figure 5.  Regulatory constraints in pig industry value chain GMO Genetically modified organisms; ASF African SwineFever; HS Health and SAfety; EM Environmental

Discussion

Regulatory constraints in pig industry

Regulatory constraints identified were import duty policy, weak public service, Genetically Modified Organisms (GMO) policy, border protocols, unfair trade practices (dumping, import of GMO finished products, illegal imports), informal stock feed supply, costly environmental management regulations such as waste management requirements, information asymmetry, drugs and vaccine laws, health and safety standards (slaughter conditions), costly ASF certification and costly labour laws in order of decreasing importance.  

The import duty policy was noted on soya meal and other materials for processing pork such as Mechanically Deboned Meat (MDM). The duty on soya meal of 5% plus 15% VAT on landed costs makes importation costly. This puts local feed manufacturers on a cost disadvantage compared to foreign manufacturers who may be sourcing their raw materials locally. Furthermore, the import duty on finished products in the value chain (flour, cooking oil etc) that are zero rated on both duty and VAT versus 15% VAT on imported raw materials (wheat, soya beans etc) was noted as suppressive to local industry. Duty on raw materials for processed pork such as duty of 15% on MDM imported from outside the country was also noted as a disincentive to import thus suppressing local processing of pork in the country. There is a need for policy makers to revisit their duty policies, especially on raw materials and finished products to ensure that they do not expose local producers to unfair competition against foreign producers.

The provision of public services in the form of veterinary field services, research, laboratory testing and public health is being constrained by resource limitations. About 10 years ago, the country had 330 veterinarians but now, only 130 are remaining. Service delivery has not been adequate and satisfactory due to the following factors:

• High staff turnover

• Lack of mentorship of new and inexperienced staff

• Resource limitations due to underfunding by government

Possible solutions to deal with the problem in public service provision were the need for community empowerment on disease management to cater for shortfalls in public delivery system and capacity training at all levels to ensure quality of service delivery.

The government policy of maintaining the country free of GMO is an issue which is currently under serious debate. The country neither allowed growing GMOs and importing raw materials from GMO receptive countries such as Republic of South Africa (RSA). This policy prevents local industry from exploiting the advantages of GMOs, especially for maize, soya beans and cotton, the main ingredients in animal feed formulation. The policy limits maize and animal feed raw materials imports only to GMO free countries like Zambia and India. Given the limited supplies in Zambia, the economy is forced to import from India, a far away country with cost implications versus the possibility of importing from RSA a nearer country if not for GMO free policy. However, the country is not selective on GMO finished products such as cooking oil, maize meal and livestock products thus exposing local industry to unfair competition with foreign players who could be exploiting the full benefits of GMOs. Proposals were that the country has to revisit its GMO policy and consider the possibility of allowing GMOs but while that is in the pipeline, considering this could be a long term decision, the economy has to be GMO free consistent across the value chain (raw materials, intermediate and finished products) to create a level playing field for local producers versus foreign producers who are using GMO raw materials.  

Zimbabwe’s meat industry, pork inclusive has been facing serious competition from meat products from RSA, Brazil, USA, Canada etc. As a result, there are arguments that the infant industries in Zimbabwe emerging from economic meltdown need serious protection from unfair competition from outside large and well established companies. The economy introduced a meat quota system that was meant to bridge the gap between local supplies and foreign imported meat supplies. The issuance of meat import licences by the regulatory authorities in the country, especially for chicken has been associated with corrupt practices with non credible  persons/companies getting the licences while others were deprived.  

Stakeholders noted unfair trade practices such as dumping of meat and illegal imports of pork bones and chick offals as practices that are putting local industry at a competitive disadvantage. Despite the quota on chicken importation pegged at 500 MT and subject to regular reviews, there has been a huge influx of meat and even prohibited products such as offals (gizzards, necks, feet, liver and heads) to bridge the offal gap resulting from low cattle slaughter in the country. The previously noted GMO inconsistency plus the issue of brining was also noted as creating unfair competition in the industry. Zimbabwe has regulations allowing for 15% of carcass weight brining while other producers outside brine up to 25% decreasing the quality of meat. Stakeholders were requesting regulatory authorities to consider labelling requirements on pork products that will ensure that consumers are well informed of the quality of products they are buying in terms of GMO and brining practices.  

The supply of stockfeed in the country is characterized by formal and rapidly emerging informal supply. The informal stockfeed do not go through the normal registration process for quality assurance and thus are believed to be unreliable, of poor quality that short charges consumers of stockfeeds. This lack of enforcement and control of stock feeds manufacturing is blamed on government’s authorities responsible for implementing the fertilizer and farm feed act, a statutory instrument that requires manufacturers of farm feeds and other inputs such as fertilizers to follow the standard certification process before availing their products on the markets. The uncontrolled mushrooming of informal stockfeeds has resulted in productivity losses and costs on farmers thus negatively impacting competitiveness. There is a need to enforce this regulation specifically for all animal feeds produced for commercial purposes to safeguard public health, quality and ensure equal treatment of players in the animal feed manufacturing sector. 

The informal supply of drugs, vaccines and medicines is also another cause of concern in the livestock industry. This is believed to emanate from restrictive and cumbersome protocols associated with the involvement of Medicines Control Authority of Zimbabwe (MCAZ) in animal drugs. The MCAZ was previously responsible for regulating human drugs and has widened its scope to include animal drugs. Traditionally, the Department of Veterinary Services (DVS) was the sole authority responsible for testing and certification of new animal health drugs to be used in Zimbabwe. Now with additional regulations from MCAZ, the process of registration and certification of animal drugs has become costly in terms of time and additional licensing fees. About 100 USD is needed for registration of drugs while an ad valorem tax of 0.5% is charged on importation of drugs. 

The cost associated with compliance with environmental management regulations such as waste management requirements are believed to be prohibitive for mostly smallholder farmers who constitute the bulky of producers. Stakeholders noted that the Environmental Management Agency (EMA) regulation and enforcements on waste management although good, is costly. The requirements of walled ponds for downstream management of effluent are costly to put up with inspection fees and fines charged very high and taxing on farmers. 

Lack of information was an important issue noted by stakeholders. Basic information for planning in the industry is not known given that the information management system that used to be vibrant before the economic meltdown is no longer active and needs to be revived. Basic information such as the size of pig industry, commercial and non-commercial sectors, geographic distribution, value network, especially the informal network, support services and others are required to support decisions in the sector. For instance, it is estimated that commercial herd is 12000 sows while the total sow population is estimated at 40000. These are mere estimates based on qualitative assessment and cannot be relied on for planning. Stakeholders indicated the need for a comprehensive pig industry survey that will provide reliable baseline information for critical decisions in the industry. Closely related to the issue of information gap, lack of knowledge and awareness on regulations was another important issue. There were indications that players do not know all the regulations that they are supposed to operate under. As a consequence, some of the players would find themselves operating outside the provisions of regulations. Therefore, there is a need to inform and educate players on all the relevant regulations. 

Compliance to health and safety standards and lack of enforcement of the regulations was another critical regulatory issue identified. Most smallholder farmers (over 90%) do not comply with health and food safety regulations in slaughtering of animals, thus posing serious health threats. Smallholder farmers forgo the cost of compliance by slaughtering in non certified places, thus putting formal operators at a cost disadvantage. There is also a health hazard looming if this goes unchecked as consumers may be exposed to unhealthy and unsafe products. Therefore, there is a need to ensure that set regulations are enforced and adhered to, especially those that have implications on public health.
 

As a quality assurance measure to meet the international standards for pig production, producers are supposed to certify and meet the ASF requirements. The cost of obtaining certification for ASF was noted as prohibitive and cumbersome. The certification process was noted as too long and the cost of the certificate is believed to be too high. Currently, the charge for such certification is 200 USD. Stakeholders feel that such a service is typically a public good and should be financed by the government and not farmers.
 

Labour is one critical input in agricultural production systems. The current cost of employing and retaining the right skilled staff is very high, and the market is full of mediocre staff as the industry is seen as occupation of last resort. The Labour Act demanding the registration of all employees under the National Social Security Act is not favourable to players in the pig industry where labour is very mobile. Workers move from one job to the other in line with seasonal changes and the desire for better opportunities resulting in employers losing out. This Act should be reviewed to accommodate situations in agriculture where employees move from one job to the other.

Conclusions

•  In conclusion, there is a need for a serious regulatory review of the pig industry in order to ensure the smooth running of business in the pig industry in Zimbabwe given the volume of regulatory issues identified by stakeholders in the pig value chain. It is recommended that further detailed research and inquiry be made around the various regulatory issues identified to provide hard evidence on the impact of such operating environment on the performance of the industry. With this evidence, stakeholders will be more equipped to carry out evidence based lobbying and advocacy for a favourable policy environment that will see growth and development in the pig industry.

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Received 10 June 2012; Accepted 8 February 2013; Published 1 March 2013

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