Trade and Industry

Tuesday, 21 April 2009

The Effects of the European Union (EU)-Imposed Livestock Identification and Traceback System on Botswana's Beef Exports, Revenue and Rural Poverty

  • Year: 2009
  • Organisation: Trade and Pro-Poor Growth Thematic Working Group; TIPS, BIDPA
  • Author(s): Davis Marumo;Milly Monkhei
  • Countries and Regions: Botswana, European Union (EU)

About 70-75 percent of Botswana beef exports are consumed in the European Union (EU) beef market. In 1997, the EU introduced a directive which made it mandatory for beef exported to the EU to be identifiable and traceable from farm to fork through a computerized system. Botswana then introduced the livestock identification and trace-back system (LITS) in 1999 to fulfill the EU export requirements and maintain the much needed EU market access.

We believe the EU-imposed LITS may pose as a non-tariff barrier to Botswana beef trade with the EU. We use a two-period causal comparative approach to examine the effects of the EU-imposed LITS on Botswana's beef exports, revenue and poverty. The EU-imported de-boned meat requirement of individual identification of cattle and traceability of beef products has imposed an extra financial burden on government almost the size of the current budget for social safety net programmes in Botswana. Both fresh or chilled boneless beef and frozen beef exports to the EU and the real value of total boneless bovine meat exports have declined significantly over the study period.

The incidence of poverty in the rural areas was more than double that experienced in urban areas. However, the majority of cattle were owned by poorer rural households. Cattle income constituted 62 percent of gross income for poorer cattle-owning households. Thus, an increase (decrease) in income from cattle is likely to have a positive (negative) impact on the incidence of poverty in the country. Any circumstance that negatively (positively) impacts trade in the cattle industry will have a negative (positive) impact on poverty in Botswana. Livestock development support programmes that target cattle-owning households to improve cattle off-take in the rural areas will positively and significantly contribute towards poverty reduction in the country.