Previous Page Table of Contents Next Page

Policy conclusions

37. Presently, urban butchers in the Mandara Mountains procure about two-thirds of their slaughter cattle from another region, the Diamare Plains. These animals are inferior in quality to locally available stall-fed bulls. The premium that consumers are willing to pay in rural markets for stall-fed beef is evidence of a preference within the region for the high-quality local beef. The slaughter of so many old cows in urban areas, whose beef is tough and less preferred than the beef of stall-fed cattle, is in large part the result of restrictive pricing policies.

38. Artificially low retail beef prices provide urban butchers with incentives to procure low grade cattle for slaughter at low prices per unit liveweight. The retail price and slaughter data and estimates of butchers' costs at Mokolo show that urban butchers are unable to earn acceptable returns from slaughtering stall-fed cattle, except during the immediate post-harvest period when slaughter cattle are relatively abundant. They cannot afford to pay producers attractive prices for stall-fed cattle in competition with rural butchers and cattle traders. Although policy-makers are quick to allege that marketing agents earn excessively high profits, the empirical research results show that urban beef prices and annual returns to urban butchers are relatively low. Returns are comparable to an extension agent's salary and slightly lower than the annual earnings of primary school teachers in Cameroon. In light of the skills required and risks undertaken, urban butchers' returns do not appear unduly high.

39. Retail price controls have the perverse effect, therefore, of limiting urban slaughter of higher quality stall-fed cattle in the Mandara Mountains region. Urban markets are not allowed to be viable marketing alternatives for producers of stall-fed cattle as long as restrictive pricing policies are in force. This is reflected in survey results showing that few stall-fed cattle were slaughtered in urban relative to rural markets. Yet the urban areas, which are characterized by higher per capita incomes and population growth rates than rural areas, are potentially attractive outlets for large numbers of stall-fed cattle. Demand projections clearly show the potential of urban areas for absorbing greater numbers of stall animals through 1990 (Holtzman, 1982). If retail price controls were relaxed, stall-fed cattle could not only satisfy much of the incremental expansion in urban demand for beef in the late 1980s and 1990s but would probably substitute at least in part for existing sources of local urban supply. Paving of the Mokolo-Maroua road in 1983 reduced transport costs and time for the 78 kilometer trip, making feasible slaughter of stall-fed cattle in Mokolo, transport of fresh beef to Maroua, and sales of high quality beef in a much larger urban agglomeration (population of about 80,000 in 1980). The far greater purchasing power of Maroua relative to towns in the Mandara Mountains region is partly reflected in retail beef prices being 33-50% higher.

40. The adverse effects of retail price controls on the urban beef supply in the Mandara Mountains have important implications for the promising World Bank funded stall-feeding credit scheme as well as lessons for other fattening schemes like it. The economic viability of this project could be undermined by failing to raise or remove retail price ceilings. Retaining price controls will limit regional absorptive capacity, necessitating increased rural slaughter and export of surplus stall animals to Nigeria. Given the decline in oil revenues, devaluation of the naira, and persistent balance of payments difficulties, Nigeria's potential for absorbing more stall-fed cattle will be limited in the medium-term. As a result, getting prices right within the Mandara Mountains region will play a very important role in determining the success of expanded stall-feeding and the tapping of alternative (urban) markets.

Previous Page Top of Page Next Page