Speaking at the Competition and Tariff Commission validation workshop on the study of the Zimbabwe beef industry in Harare, Zhanda said the provision of a level playing field would facilitate the development of markets that provide for equal opportunities among all value chain players and stakeholders.
“It goes without saying that the sector has been grappling with a myriad of challenges among them, the continued outbreak of foot and mouth disease problem that has significantly destabilised cattle marketing and incessant droughts in the recent past,” Zhanda said, adding the sector has potential to contribute 86% to house hold income for region 4 and 5.
“Competition helps markets to work efficiently and also ensures that the value attained is passed to all levels of the value chain. In the case of beef value chain, if the market is competitive and efficient it ensures that farmers would get a fair value for their cattle while beef consumers get reasonable prices. Concurrently, merchants and abattoirs will also earn reasonable margins.”
He said the beef was overburdened with regulatory costs, like any other sector.
Zhanda said there were media reports alleging anti-competitive practices of price suppression, as well as collusive tendencies particularly at auction markets both at rural district councils and private auctions.
“Forming rings is against the auction principle. Wherein auctions are made to create competition among buyers to reach the best possible price, collusion or forming rings frustrates this process resulting in lower prices to the producers. While this might be beneficial to merchants or abattoirs, it is imperative that such practices in the long term would not just frustrate the farmers it would hamper investment into the sector,” he said.
Zhanda said the practice would see farmers getting little value from cattle and this cascades down through the whole value chain, as farmers would not be able to improve their production operations, neither would they be able to purchase feeds hence crippling feed producers and livestock production.
According to study findings, the beef industry is heavily regulated and taxed with many government departments having interests in the sector.