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Beef value chain actors reap big gains from new financing in Southern Africa


 swazilandcattlefattening_cropped

Cattle at a small-scale fattening farm in the Siphofeneni area, Swaziland (photo credit: ILRI/Saskia Hendrickx).

Improving the livelihoods of livestock smallholders and other value chain actors through value addition and marketing is constrained by lack of finance, working capital, affordable high-quality inputs and well-structured value chains. Even with a high demand for agricultural financing in Africa, not more than 1% of commercial lending goes to agriculture, with even less availed for livestock enterprises.

But efforts by research and development partners are offering renewed hope for livestock financing in Southern Africa. This was revealed at an International Conference on Livestock Value Chain Finance and Access to Credit, organized by the International Livestock Research Institute (ILRI) in partnership with the Swaziland Water and Agricultural Development Enterprise (SWADE) and Swaziland’s Micro Finance Unit (MFU) 21-23 Feb 2017.

The main objectives of the conference were to:

  • Demonstrate sound business case models for low-cost feeding regimes
  • Divide the value chain actors into segmented sub-groups linked together
  • Share experiences and research in helping smallholder livestock producers/actors access finance/credit
  • Support a productive dialogue among livestock value chain actors, financial institutions, scholars, private-sector companies and government institutions
  • Asses ways to replicate and scale success to more low-income countries/regions

The conference was organized following a successful pilot project titled ‘Innovative Beef Value Chain Development Schemes in Southern Africa’, funded by the International Fund for Agricultural Development (IFAD) and led by ILRI under the CGIAR Research Program on Policies, Institutions and Markets (PIM). The project is implemented in the Lubombo and Manzini regions of Swaziland. The conference was attended by farmers and representatives of farmer groups; the Government of Swaziland; research, academic and financial institutions and IFAD.

In his keynote address, ILRI’s regional representative for Southern Africa, Sikhalazo Dube, announced that under the beef value chain finance initiative, farmers working as business entities are obtaining credit from Nedbank to cover the operational costs of fattening about 25 beef cattle by feeding them on forages grown on two-hectare plots using locally available water sources.

It is expected that farmers will earn at least USD15,000 per cycle if the cattle are sold at 15–18 months of age, Dube said.

Speaking at the event, Antonio Rota, the lead technical specialist of IFAD, reaffirmed his fund’s commitment to the program’s rollout across Southern Africa.

‘The beef value chain finance initiative complements our efforts towards reducing poverty, ensuring food security and creating opportunities for rural farmers, especially women and youths. We are ready to support farmers in the region, as it is our mandate to support rural areas in accessing such initiatives’, Rota said.

On his part, the Swazi Minister of agriculture, Moses Vilakati, acclaimed the project as an important step towards addressing the high cost of feed and limited access to finance, two major constraints afflicting smallholder livestock producers in the country. He further emphasized the ministry’s confidence that this public-private partnership would significantly contribute towards reducing the supply gap in Swaziland beef sold on the international market.

The beef value chain finance initiative is expected to ease access to credit for livestock farmers as well as provide a structured marketing scheme to farmers and buyers. In Swaziland, farmers are guaranteed a USD100,000-fund through Nedbank—Swaziland and can borrow up to USD15,000.

Visit the conference site.
Improving the livelihoods of livestock smallholders and other value chain actors through livestock value addition and marketing is constrained by the lack of access to finance, working capital, affordable quality inputs, and well-structured value chains.  To address this issue, the International Livestock Research Institute (ILRI) in partnership with the Swaziland Water and Agricultural Development Enterprise (SWADE) and the Micro Finance Unit, Swaziland (MFU) organized an international conference on livestock value chain finance and access to credit. The forum was held in Swaziland on 21–23 Feb 2017.
The conference was organized with financial support from the International Fund for Agricultural Development (IFAD) (@IFADnews) and as part of the research on value chains under the CGIAR Research Program on Policies, Institutions, and Markets (PIM) (CGIAR) (@PIM_CGIAR).

News clippings
Transforming pastoral pursuits into profitable livestock enterprises in southern Africa, ILRI News Clippings blog, 3 Mar 2017
Beef fattening ready for take-off in southern Africa with new financing made available to smallholders, ILRI News Clippings blog, 25 Feb 2017
Feed cost major constraint for feedlot farmersSwazi Observer, 23 Feb 2017.
Nedbank gets accolades for supporting feedlot projectSwazi Observer, 23 Feb 2017.

One thought on “Beef value chain actors reap big gains from new financing in Southern Africa

  1. I have read the article on ‘innovative beef value chain development schemes in Africa” a story in Swaziland. I am a Malawian working with ministry of Agriculture under Dept of Animal health and Livestock development and am a National Beef Coordinator. Not much have been done in Malawi under beef development as compared to other value chains. Therefore I was wondering with the expertise that ILRI has in beef industry and other players that they can help our small scale beef farmers in the country in looking at their animals as business assests and not for prestige.

    I would be greatful if any of the collegues can comment on how best as a country we can tap the resources in order to help our farmers.

    Mazganga Suzanna Mhone
    Malawi

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