By Ntambo Mabuza

There is no louder cry for help, or a serious hunger for knowledge, than when ninety- three people turn up for a webinar on the eve of a long weekend public holiday. Largely made up of a mix of farmers and would-be farmers with varying levels of exposure, experience and expertise in the livestock business, the turnout was more poignant when the said webinar promised to tackle the weighty and sobering topic of “Profit or Perish: Smart Financial Strategies for Farmers”.

Whether lured by the promise of profit margins or the need to rein in runaway costs, the beef cattle sub-sector is wide open for business. The pie is so big that South Africa is a net importer of cattle for slaughtering, with neighbouring Namibia, among other countries, accounting for an average of 8% of overall supplies between 2017 and 2023, according to data from the National Red Meat Producers Organisation.

Despite this huge potential, the irony is that an estimated 12 million cattle — mostly
owned by black subsistence and emerging farmers — remain excluded from the
formal meat industry value chain.

This system tracks production from the farm gate to the nation’s border posts, yet these farmers struggle to access it. The structural obstacles to changing the face of the South African agricultural industry over the past 30 years of agrarian reform are well-documented. Some of these renewed strategies for self-correcting have yielded promising green shoots amid dispiriting wastelands.

The webinar sought to answer this pressing question: How does one explain the stagnation and high failure rate of support interventions worth millions of rands? According to Precious Mvulane of GAD Consulting Services Inc., efforts to improve the quality of beef cattle as a product and commercialisation have been hindered by widespread neglect of basic farming and business practices.

A chartered accountant, Mvulane’s consultancy has assessed the operations of over 100 livestock farmers in the past two years through the Izinkomo Zethu Programme. In partnership with organisations like the Red Meat Industry Services (REMIS), which hosted the webinar, the programme helps farmers scale and commercialise
their businesses.

An analysis of Black-owned cattle farms identified three key factors that contribute to recurring challenges: livestock (cattle), market access, and finance – all of which are within the farmer’s control. GAD summarised these issues into the “Top 10 Farm Management Mistakes.”

Top 10 Farm Management Mistakes:

1. Incomplete or missing livestock records.
2. Not registering or branding cattle for ownership.
3. Mixing personal and business finances.
4. No formal business structure in place.
5. Failing to track income and expenses consistently.
6. Neglecting livestock health and vaccination records.
7. Treating farming as a hobby instead of a business.
8. No succession plan for future farm ownership.
9. Inaccurate or missing financial records.
10. Not using technology to improve farm management.

Subsistence and emerging farmers in the study owned an average of 35 cattle, far fewer than the 500 or more typically found on commercial beef farms. This highlights the challenges they face in building wealth through livestock farming.

Many farmers risk losing their legacy due to poor succession planning, as the average cattle owner is 70 years old, according to GAD consultants. Without a clear plan, valuable experience and assets may not be passed down, and new ideas struggle to take root in the business.
 
“Many of these farmers might have the technical know-how gained from running
small farms for a number of years, but lack of management skills that are necessary
for commercialisation made it difficult to scale up their business,” said Mvulane. 

Of the 100 farmers reviewed, only 20 could provide financial statements, and just two had accurate records. GAD consultants identified poor financial management as a common issue, with many farmers struggling to track business activities. Key challenges included relying on informal markets with unstable pricing and failing to calculate the true cost of raising cattle.

With support from industry partners like REMIS, Mvulane’s consultancy provides detailed, farm-level budgeting assistance. This hands-on approach is crucial in determining the success or failure of farm transformation efforts. “If you’re not tracking all of these things you’ll therefore struggle to access the market and when you struggle to access the market, you’ll also struggle to access funding,” she explained the secret to upscaling and commercialising.