Could it Be time to Invest in the Uganda Beef Industry?

The future of Uganda?s meat processing industry is bleak because of the high rate at which the population of animals, especially cattle, is declining.

This has resulted into beef shortage on the local market, sector players say. They note that if the trend is not checked, it will have a devastating effect on the industry.

"About 75% of cattle come from western Uganda, but most of them are being bought by dealers from South Sudan and the DR Congo, Kenya, Tanzania and Rwanda. The Government should ban live cattle exports to stop the bad situation from turning worse," Paul Mutsinzi, a management committee member at Kampala City Abattoir, noted.

Uganda is the only country that allows live animals exports in East Africa. With the escalating shortage of beef, prices have skyrocketed. Many of the meat processing factories are producing below capacity, while others are about to close shop.

"In the past five months, processed beef exports reduced by 50%. In the first two weeks of August, we were targeting to export 25 tonnes of beef, but exported only seven tonnes," said Stephan Duyck, the proprietor for Fresh Cuts, a meat processing firm.

He said the firm?s sh2b plant used to process an average of 70 heads of cattle per day, but the number had shrunk to about 20, which has hurt earnings from the investment.

By last Friday, the firm had down-sizing its staff by 15%. The prices of processed beef rose from sh6,000 in January 2010 to sh8500 a kilogramme. The price meat in city abattoirs increased from sh4,000 to sh5500, while a kilogramme of sausages costs sh9,000, up from sh7000.

The average number cows slaughtered at the Kampala City Abattoir a day, for instance, stood at between 350 and 400 by the end of last year. It is 200 today.

There are at least six abattoirs in Kampala and Wakiso districts.

"If the Government doesn?t ban live animal exports, the industry will collapse, leading to loss of jobs and taxes," the dealer who preferred anonymity noted.

The executive director of the Uganda Export Promotions Board, Florence Kata, proposed a comprehensive review of the animal trade policy to restrict some exports.

"Exports boost the economy, but in order to tap into the benefits of value-addition, we need to only support processed meat exports," she said in an interview.

According to Peter Katana, a consultant in agri-business, shortage of beef is also caused by trends like farmers getting more interested in rearing dairy cattle than meat because of a daily income it offers.

Katana urged the Government to provide incentives for commercial agriculture that embraces modern feeding systems of animals, high quality and quantity beef producing breeds like the Ankole and Zebu cattle.

He said overwhelming challenges in matching Uganda?s population growth with the multiplication level of edible animals.

Uganda?s population is growing at 3.4%. To meet local animal protein needs, livestock productivity has to increase by over 4.3% a year, from 3% today.

"If the animal population is not increased, the demand for beef will overwhelm the country and force it to resort beef imports. This will increase the cost of living," experts noted.

The Uganda Bureau of Standards 2008 livestock census report indicates that the country had a stock of about 11.4 million cattle, compared to Tanzania?s 33 million and Kenya?s 40 million.

By 2008, Uganda also had 12.5 million goats, 3.4 million sheep, 3.2 million pigs and poultry at 37.4 million.

Meat production in Uganda stands at 142,000 tonnes, with beef contributing 107,000, goat meat 28,000 metric tonnes and sheep 5,000 tonnes.

The national per capita consumption of meat is only 6kg, below the 50kg recommended by the Food and Agriculture Organisation and World Health Organisation.

In the 2008/2009 financial year, the agriculture sector accounted for 23.7% of the gross domestic product, with the livestock industry contribution at current prices standing at 3.0%.

By David Sempijja: The New Vision Newspaper