'We rely on cattle'
The CEO of Agribank Sakaria Nghikembua said that diversification will be the mainstay of the agricultural sector and reliance on livestock must end.
The agricultural sector in Namibia remains largely livestock driven, giving the country a large dependency on a single agricultural activity.
It is therefore important for the livestock sector to diversify through value addition and for the country to also develop non-livestock activities.
This concern was expressed by the CEO of the Agricultural Bank of Namibia (Agribank), Sakaria Nghikembua, addressing the 63rd Livestock Parade as part of the 2017 Annual Windhoek Industrial and Agricultural Show which ended last week.
Nghikembua said between 2007 and 2016, the agriculture and forestry industry contributed an average of 4.3% to the country's gross domestic product (GDP).
Livestock too important
Of this, the livestock sector contributed an average of 2.5% to the GDP, being the highest of any of the agriculture and forestry sub-sectors over this period.
Furthermore, Nghikembua said agriculture employs nearly 136 000 people accounting for 20.1% of the entire labour force.
However, the agricultural sector and by extension, the livestock sector, is faced with distinct challenges.
“Our country remains prone to climate volatility in the form of recurring droughts and floods. An additional challenge is bush encroachment, which places pressure on grazing capacity. These environmental concerns have implications on the quality of livestock produced and prices thereof,” said Nghikembua.
According to him, Namibia has as a result, seen a relatively lower percentage share of the livestock sub-sector to the GDP during the drought years of 2013, 2015 and 2016, despite the high record of livestock marketed.
Therefore, the livestock population tends to decline during drought years resulting from the need to reduce pressure on grazing land, said Nghikembua.
According to Nghikembua, the market prices for livestock have been favourable on a progressive basis.
“In effect, the average price for cattle per kg has nearly doubled in the last decade, reaching an all-time high of N$28.86/kg in 2016 compared to an average of N$16.52 per kg recorded in 2007.
“Similarly, the domestic market price for sheep increased from N$18.82/kg in 2007 to N$39.94/kg in 2016.
“It thus did not come as a surprise that the last four years saw the highest number of cattle marketed to local abattoirs in the last 10 years, averaging 346 256 head per year. This is despite the drought conditions experienced in 2013, 2015 and 2016.”
Communal disadvantage
He added that subsistence agriculture persists in communal areas, largely driven by lack of knowledge and farming skills, inadequate markets for livestock and other farming products; and lack of access to finance for agricultural production, inclusive of livestock rearing and processing.
According to Nghikembua, the northern communal areas are particularly disadvantaged in this regard, as they virtually have no access to markets for their livestock.
He added that the processing of livestock products is limited which means there is leakage of economic value in the livestock value-chain.
“We can diversify more by adding value to livestock products and focusing on non-livestock activities such as crop farming and horticulture. However, we also see opportunities for growth which require further investments in livestock farming and its downstream sector (agro-processing).
He said it is also worth noting that the South African agricultural sector registered growth of 33% during the second quarter of 2017. This is the highest quarterly GDP growth rate achieved in more than a decade. South Africa is an important export market for Namibia's livestock.
“Thus, the performance of the South African economy and its trade policy are important elements for us to monitor. The latest quarterly agricultural GDP growth of 33% in South Africa could imply sustained demand for livestock and livestock products produced in Namibia.”
Nghikembua also said it is also important for farmers, financiers and other stakeholders to consider thematic investment areas if the livestock industry growth is to be sustained. These include production and the use of breeding stock that is resilient to harsh climatic conditions; wood and charcoal production to diversify income sources to be in a better position to invest back into livestock production; fodder production, and feedlots.
Furthermore, Nghikembua advised the farmers should consider investment in sustainable rangeland management, agro-processing and export diversification from traditional markets.
He added that the no-collateral loan product, launched at the end of April this year by Agribank, has seen over N$10 million in disbursements to communal farmers so far, with the bulk of the financing going towards livestock purchases.
“We have also introduced the agro-processing loan scheme whose objective is to finance value-addition to agricultural products, including livestock product processing.”
It is therefore important for the livestock sector to diversify through value addition and for the country to also develop non-livestock activities.
This concern was expressed by the CEO of the Agricultural Bank of Namibia (Agribank), Sakaria Nghikembua, addressing the 63rd Livestock Parade as part of the 2017 Annual Windhoek Industrial and Agricultural Show which ended last week.
Nghikembua said between 2007 and 2016, the agriculture and forestry industry contributed an average of 4.3% to the country's gross domestic product (GDP).
Livestock too important
Of this, the livestock sector contributed an average of 2.5% to the GDP, being the highest of any of the agriculture and forestry sub-sectors over this period.
Furthermore, Nghikembua said agriculture employs nearly 136 000 people accounting for 20.1% of the entire labour force.
However, the agricultural sector and by extension, the livestock sector, is faced with distinct challenges.
“Our country remains prone to climate volatility in the form of recurring droughts and floods. An additional challenge is bush encroachment, which places pressure on grazing capacity. These environmental concerns have implications on the quality of livestock produced and prices thereof,” said Nghikembua.
According to him, Namibia has as a result, seen a relatively lower percentage share of the livestock sub-sector to the GDP during the drought years of 2013, 2015 and 2016, despite the high record of livestock marketed.
Therefore, the livestock population tends to decline during drought years resulting from the need to reduce pressure on grazing land, said Nghikembua.
According to Nghikembua, the market prices for livestock have been favourable on a progressive basis.
“In effect, the average price for cattle per kg has nearly doubled in the last decade, reaching an all-time high of N$28.86/kg in 2016 compared to an average of N$16.52 per kg recorded in 2007.
“Similarly, the domestic market price for sheep increased from N$18.82/kg in 2007 to N$39.94/kg in 2016.
“It thus did not come as a surprise that the last four years saw the highest number of cattle marketed to local abattoirs in the last 10 years, averaging 346 256 head per year. This is despite the drought conditions experienced in 2013, 2015 and 2016.”
Communal disadvantage
He added that subsistence agriculture persists in communal areas, largely driven by lack of knowledge and farming skills, inadequate markets for livestock and other farming products; and lack of access to finance for agricultural production, inclusive of livestock rearing and processing.
According to Nghikembua, the northern communal areas are particularly disadvantaged in this regard, as they virtually have no access to markets for their livestock.
He added that the processing of livestock products is limited which means there is leakage of economic value in the livestock value-chain.
“We can diversify more by adding value to livestock products and focusing on non-livestock activities such as crop farming and horticulture. However, we also see opportunities for growth which require further investments in livestock farming and its downstream sector (agro-processing).
He said it is also worth noting that the South African agricultural sector registered growth of 33% during the second quarter of 2017. This is the highest quarterly GDP growth rate achieved in more than a decade. South Africa is an important export market for Namibia's livestock.
“Thus, the performance of the South African economy and its trade policy are important elements for us to monitor. The latest quarterly agricultural GDP growth of 33% in South Africa could imply sustained demand for livestock and livestock products produced in Namibia.”
Nghikembua also said it is also important for farmers, financiers and other stakeholders to consider thematic investment areas if the livestock industry growth is to be sustained. These include production and the use of breeding stock that is resilient to harsh climatic conditions; wood and charcoal production to diversify income sources to be in a better position to invest back into livestock production; fodder production, and feedlots.
Furthermore, Nghikembua advised the farmers should consider investment in sustainable rangeland management, agro-processing and export diversification from traditional markets.
He added that the no-collateral loan product, launched at the end of April this year by Agribank, has seen over N$10 million in disbursements to communal farmers so far, with the bulk of the financing going towards livestock purchases.
“We have also introduced the agro-processing loan scheme whose objective is to finance value-addition to agricultural products, including livestock product processing.”
Comments
Namibian Sun
No comments have been left on this article