Thesis (M.Sc. (Agricultural economics)) --University of Limpopo, 2011 / The cattle (especially beef) industry in Botswana has traditionally played an important role in the country’s economy, with significant contributions to Gross Domestic Product (GDP), exports, and employment, as well as playing an important role in social and cultural spheres. Agriculture contributes about 2.3 % of GDP, out of which 70% - 80% is attributable to cattle production. By 2004, beef exports amounted to P284m, approximately 1.7% of total exports of P16.2 billion. In recent years, however, there have been signs of decline and stagnation, especially in the beef export subsector, with adverse implications for the viability of cattle farming in the country, and more generally for rural livelihoods. Botswana’s beef subsector has not fulfilled its potential as a contributor to economic growth and development, especially in the rural areas. The BMC has never been able to meet its quota of 19 000 tonnes of beef to the European Union (EU), despite being cushioned by the Continuo agreement against price competition from more efficient beef producers like Brazil. With the above background, the study was undertaken to examine the supply response of beef farmers in Botswana to various economic (e.g. prices) and non-economic [e.g. rainfall, technology and inventory (cattle population)] factors. This study used historical data on Botswana’s beef subsector for the period 1993 to 2005, and Nerlove’s partial adjustment model was used for the empirical analysis of the data. The results of the study revealed that Botswana beef farmers respond positively to price incentives and time trend (proxy for technology), and negatively to all other variables. Elasticities of supply showed that cattle supply is elastic with respect to variations in producer price and almost unit elastic to changes in cattle inventory. However, the response to shocks in other variables included in the model was inelastic. Short run price elasticity of supply is 1.511 whereas long run price elasticity is 10.57, a clear sign that pricing can be employed as a strategy to enhance beef production in Botswana. The speed of adjustment however, was relatively very low at 14% per period. This slow adjustment perhaps tells us that Botswana farmers, who are predominantly subsistence farmers, may not be having enough capacity (in terms of resources and technology) to immediately increase production when economic environment improves in their favour. Based on the results it is recommended that price increase be adopted as a strategy for improving cattle supply. Extension services need to be strengthened with a view of promoting cattle farming as a commercial activity. Current technology of using communal grazing and indigenous breeds need to be improved. It is also recommended that studies be conducted to determine the suitability of technology that is at the disposal of the farmers. Lastly Botswana government needs to come up with a strategy by which farmers can change from their attitude of oxen production to weaner production.

This study attempts to identify factors responsible for determining differences in the productivity of cattle managed by communal and private livestock farmers in the southern region of Botswana during 1999/2000. It is hypothesised that herd productivity and investment in southern Botswana are higher on private ranches than on open access communal grazing land. This study is important because livestock, especially cattle, contribute significantly to the livelihood of farmers in Botswana. Cattle are a major source of meat, milk and draught power, and provide a store of wealth that protects against inflation and which can easily be converted into cash. Cattle production is also an important source of employment in the rural economy of Botswana. Furthermore, the export of beef is a major source of foreign exchange earnings, and cattle account for 80 percent of agriculture's contribution to Botswana's gross domestic product. A stratified random sample survey of communal and private livestock farmers was conducted in the southern region of Botswana from August 1999 to May 2000 with the assistance of four enumerators. The sample survey data were used to compute descriptive statistics and to estimate the parameters of a block recursive regression model. The model postulated relationships between agricultural credit, investment in fixed improvement, investment in operating inputs and herd productivity. Some of the equations are estimated with Ordinary Least Squares (OLS) and some with Two-Stage Least Squares (2SLS) to account for likely correlation between endogenous explanatory variables and the error term. Descriptive statistics show that levels of investment and herd productivity are higher on private farms than on open-access communal grazing. Private farmers are also better educated, more liquid, and have larger herd sizes, but do not differ from their communal counterparts in terms of age, gender, race or household size. The regression results show that (a) respondents with secure tenure and larger herds use more agricultural credit than those who rely on open access communal grazing land to raise cattle; (b) secure land tenure, higher levels of liquidity and use of long-term credit promote investment in fixed improvements to land; (c) liquidity from short-term credit and wage remittances supports expenditure on operating inputs; and (d) herd productivity increases with greater investment in fixed improvement and operating inputs. Herd productivity is therefore positively (but indirectly) influenced by secure land tenure. It can therefore be inferred that government should (a) uphold private property rights to land where they already exists; (b) privatise open access grazing to individual owner operators where this is politically, socially, and economically feasible; and (c) where privatisation to individuals is not feasible, government should encourage users to convert the grazing into common property by subsidising the costs of defining user groups and the boundaries of their resources, and enforcing rules limiting individual use of common property. This first-step in a gradual shift towards more secure tenure should be followed by the conversion of user groups to non-user groups organized along the lines of investor-owned firms where members exchange use rights for benefit and voting rights in a joint venture managed by an expert. / Thesis (Ph.D.)-University of KwaZulu-Natal, Pietermaritzburg, 2006.