FMD disruption threatens N$2.4bn in livestock value chain losses

CHAMWE KAIRA

Namibia’s livestock industry could suffer estimated cash losses of N$2.4 billion over six months if foot-and-mouth disease (FMD) continues to disrupt livestock marketing, according to the Namibia Agricultural Union (NAU), Leigh-Ann Nehoya, Agricultural Economist, Namibia Agricultural Union

The projected losses include N$1.382 billion in primary production expenses and debt repayments, N$378 million in continuing abattoir fixed expenses and N$331 million from reduced slaughtering for the export market.

The NAU estimates that the disruption could result in losses of about N$13 million per day across the livestock value chain, putting pressure on businesses, employment and household incomes.

Nehoya said the outbreak was highlighting the economic importance of livestock farming, which supports farmers, workers, suppliers, transport operators, auctioneers and abattoirs.

“The longer marketing activities remain disrupted, the greater the pressure on businesses throughout the value chain, with implications for employment, household incomes and the wider rural economy,” the NAU said.

The industry’s annual economic activity includes estimated input supplier turnover exceeding N$6 billion and N$9.15 billion in livestock sales income through various marketing channels, including live animal exports.

Cattle and small-stock slaughtering generate an estimated annual producer value of N$3.66 billion, with a further N$914 million in value addition through slaughtering.

Livestock auctions facilitate approximately N$2.69 billion in annual sales, generating an estimated N$162 million in commission income.

The NAU estimates that livestock producers south of the Veterinary Cordon Fence incur N$3.73 billion in annual operating cash expenses. Livestock transport expenditure in the area is estimated at a further N$228 million annually.

The sector also supports an estimated 52 000 agricultural jobs south of the Veterinary Cordon Fence, with the incomes potentially supporting 200 000 dependents, assuming four dependents per employed person.

The NAU estimates that livestock producers require approximately N$230 million a month to cover operating expenses and debt repayments, equivalent to N$7.7 million a day.

The estimate assumes farmers immediately reduce normal operating expenditure by 50%, leaving monthly cash operating expenses of about N$155 million. A further N$75 million is required for debt repayments.

These financial obligations continue even when farmers cannot market their animals. The NAU warned that some costs, including fuel and animal maintenance, could increase as the disruption persists.

The projected six-month losses comprise N$81 million in foregone auction commission revenue, N$114 million in lost livestock transport revenue, N$47 million from reduced slaughtering for the local market and N$64 million in foregone gross margins for input suppliers.

The estimates are based on a six-month disruption scenario and do not necessarily account for additional shocks such as drought or further increases in input costs.

The actual economic impact could therefore be greater if these pressures occur alongside prolonged market disruption.

The NAU said efforts to contain the disease and protect Namibia’s animal-health status should be accompanied by a coordinated plan to restore economic activity.

It called for measures to restore market access, facilitate permitted livestock and meat movements, sustain domestic supply chains and secure alternative export opportunities where veterinary and importing-country requirements allow.

The union said a recovery roadmap should identify the surveillance, movement controls, testing and traceability requirements applicable to affected areas, together with clear responsibilities, adequate resources and implementation milestones.

It also urged Namibia to engage with veterinary authorities in established and potential trading markets to identify opportunities to maintain, resume or expand trade.

The NAU said the country should explore export diversification, including markets that accept eligible livestock products from recognised FMD-free zones where vaccination is practised, subject to applicable requirements.

The union said recovery should be measured not only by progress in controlling the disease but also by the restoration of viable marketing opportunities and the ability of the livestock value chain to function again.

It warned that every additional month of disruption places further pressure on businesses, workers and households dependent on the sector, making a proactive market-access strategy necessary to protect livelihoods and preserve the productive capacity of Namibia’s livestock industry.