1

Regional Trade Opportunities for Botswana’s Livestock Sector (the small stock and beef sectors

J. Tsoro Maiketso&

Masedi Motswapong

2

Outline 1. Introduction2. Trade trends3. Objectives of the Paper4. Methods

3

Introduction Although agriculture’s contribution to GDP has

declined, it is still an important source of livelihood, especially for the rural households

Livestock is the main agriculture activity Beef industry is the backbone of the rural

economy (SACU Trade Policy Review, 2009) Beef is the largest agricultural commodity export

Are there opportunities to; Increase exports? Diversify exports? Diversify markets?

4

Objectives Discuss the measures (policy

and legal provisions) affecting trade in livestock and livestock products

Analyse the determinants of Botswana’s exports of livestock and livestock products

5

Exports of Fresh or chilled boneless bovine meat: main markets (BWP millions)

1.

2007 2008 2009 2010 2011 2012 -

50

100

150

200

250

300

United Kingdom South Africa Germany Reunion Greece

6

Exports of Fresh or chilled boneless bovine meat: emerging markets (BWP millions)

1.

2007 2008 2009 2010 2011 20120

2

4

6

8

10

12

Netherlands Angola Swaziland Namibia Zimbabwe

7

Exports of Frozen boneless bovine meat, main markets (BWP millions)

1.

2007 2008 2009 2010 2011 2012 -

50

100

150

200

250

300

350

400

South Africa Germany Greece United Kingdom Netherlands

8

Exports of Frozen boneless bovine meat, emerging markets (BWP millions)

1.

2007 2008 2009 2010 2011 2012 -

1

2

3

4

5

6

7

Swaziland Mozambique Namibia Angola DRC Zimbabwe Antarctica

9

Methods Review of measures affecting trade

BMC Act [Chapter 74:04]; Export monopoly?

Control of Livestock Industry Act [Chapter 36:01]; Restrictions on exports; bans, levies, licensing etc

Diseases of Animals Act [Chapter 37:01]; Diseases of animals and the role of SPS measures

10

Gravity modelIn its general formation, the gravity equation is specified as follows; 𝑋𝑖𝑗 = 𝐺𝑆𝑖𝑀𝑗 ∅𝑖𝑗 ……………………………………………………………….…(1)

where 𝑋𝑖𝑗 = total exports from county i to country j 𝑀𝑗 = the importing county’s GDP or per capita GDP 𝑆𝑖 = exporter specific factors (i.e. exporter’s GDP)

∅𝑖𝑗 =distance between countries i and j 𝐺 = a constant

11

Model cont’dTaking natural logs of equation 1 yields the following estimation ln𝑋𝑖𝑗= ln𝐺+ ln𝑆𝑖 +𝑙𝑛𝑀𝑗 + 𝑙𝑛∅𝑖𝑗 ……………………………………. (2)

More specifically equation 2 can be expressed as ln𝑋𝑖𝑗= 𝛽0 + 𝛽1𝑙𝑛𝑌𝑖 + 𝛽2𝑙𝑛𝑌𝑗 + 𝛽3 𝑙𝑛𝐷𝑖𝑗 + 𝜖𝑖𝑗……………………. (3)

where 𝑌 denotes GDP and 𝐷 denotes distance, however other variables can be included such as exchange rates and any other variable that captures trade costs

12

Data SourcesThe study will use data from Statistics

Botswana and where possible other data sourced from, Euro stat, World Bank