A quantitative value chain analysis of policy options for the beef sector in Botswana

Abstract

The liberalization of beef exports in Botswana is hotly debated among policy makers and relevant value chain actors. While some policy makers argue that such a move might increase prices for producers and make beef unaffordable for consumers, others suggest an open market would reduce the profitability of the beef sector in Botswana. At the same time, these impacts will be mediated by the presence of animal disease and the availability of sufficient feed and water. In this paper, we constructed an integrated system dynamics (SD) model that captures the feedbacks between the biological dynamics of cattle production, the economics of animal and meat marketing and trade, and the impacts that environmental pressures such as rainfall and animal disease have on the system. We used this model to run a series of scenarios associated with market liberalization and animal health shocks to quantify their impacts throughout the value chain, taking into account the feedbacks between biology, markets, and environment on the value chain itself. This approach allows for a holistic evaluation of policy options on different chain actors and whole chain performance, and provides a knowledge base for prioritizing interventions. Model results suggested that although disease control policies benefit all value chain actors, gains from market liberalization come at the expense of substantial losses to Botswana Meat Commission (BMC) and its contracted feedlots. They also suggest that combining market liberalization policy reforms with better animal disease controls greatly improved the financial performance of all value chain actors.