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Focus Area 5: The economics of red meat consumption and production in South Africa







Animal production has contributed above 45% of the gross value of agricultural production over the past five years, while the share of red meat has increased from 30% of the value of livestock production to above a third over this same period. Furthermore, approximately 70 percent of South Africa’s total area of 1.2 million km² is only suitable for livestock production. As per capita incomes increase in South Africa, the diets of the emerging middle class changes to incorporate more animal proteins, including poultry meat, eggs, red meat and dairy products – and red meat is the only one of these product categories whose share of total livestock production has increased over the past five years. 

Thus the industry is well placed to grow, and in the process to contribute to the wider economic development of South Africa, both in the production areas by creating livelihoods and increased levels of welfare for the rural population, and in the urban areas where ever more sophisticated consumers require more and more built-in services in the products that they buy.  The sector could play a vitally important role in alleviating poverty by means of income generation and as a source of protein. The sector also stands to gain from globalisation since South Africa is known to produce good quality meat products. Research support should therefore assist in targeting or developing sustainable markets for enterprises (including SMME’s) so as to enable this sector to play its rightful role in the economy.  

Furthermore, past experience has shown that the most limiting factors to commercialisation of the emerging red meat sector are supply-side constraints such as lack of appropriate infrastructure, poor access to production animals and inputs, poor access to usable technical and market information and to well-functioning marketing and credit systems. The purpose of commercialising the emerging red meat sector is to address these constraints and ensure that farmers produce efficiently, have easy access to all the available markets and can make informed choices on which ones to use.

Secondly and equally importantly, commercialisation of the emerging sector should encourages efficient utilisation of the natural resources (especially the veld) both on privately controlled land and on communal land-based enterprises. Therefore, the major areas of focus should be to ensure that the farmers are able to run viable livestock enterprises that are environmentally and economically sustainable.


Development programmes for commercialising the emerging sector should be cognisant of the fact that it is not homogenous but consists of the following groups:
  • Emerging livestock farmers on private land.  These either own the land or lease it and hence have some autonomy over their livestock enterprises.
  • Commercially-oriented producers on communal land.  Their access to and use of grazing land and livestock infrastructure is highly influenced by the community in which they farm.
  • Predominately subsistence livestock keepers on communal land for whom livestock production is not considered as major income generator.
However, whether from subsistence or commercially-oriented production systems, the Red Meat Industry would like to see that as many as possible of the market ready livestock enter the food chain. Ultimately, the competitiveness of the sector should be improved to the extent that the producers and society at large benefit.


FOCUS AREA 5 COMPONENT NUMBERS


A. Value chain analyses


B. Risk analysis and management


C. International trade


D. Policy assessment


E. Commercialisation (formal and informal markets) of the emerging sector 


F. Technology transfer and training


G. Integrated models for more efficient management



FOLLOW THIS LINK FOR DESCRIPTIONS OF EACH AND THE OUTCOME NUMBERS WITH EACH COMPONENT