Case study

MDGs in focus - MDG 1: Eradicate extreme poverty and hunger

DFID helps poor rural farmers in South Africa's Eastern Cape increase their profits at auction

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Video: Beefing up South Africa’s meat markets

Thandekile Rawana is a communal farmer in South Africa’s Eastern Cape, one of the country’s poorest provinces. Competitive cattle markets in the area are still heavily dominated by white commercial farmers and it’s hard for rural farmers like Thandekile to make a living and lift themselves out of poverty.

However Thandekile now gets a better price for his animals thanks to support from the UKaid funded ComMark Eastern Cape Red Meat project (ECRM).

The improved prices mean that he can put some profit back into his farm, increase productivity and build a better life for his family.

Recently Thandekile bought a new tractor so that he can start growing and selling farm crops. And the extra money has also allowed him to make improvements to his house and educate his five sons.

“Since we’ve been involved with ComMark (Eastern Cape Red Meat project), we are very satisfied with our prices,” says Thandekile.

“We get something more with ComMark because they grade our animals.”

The meat grading process that Thandekile talks about has a huge implication on the price that his cattle fetch at auction. Educating farmers about this process and advising them on the latest livestock farming methods is a key part of the ECRM project.

Cultural versus market value

Farmers learn how the formal red meat markets work through guided visits to auctions and abattoirs and even the poorest owners of livestock, who only have a few animals, are able to take part in the project and sell their cattle at auction. 

Older, bigger cattle and cattle with horns are culturally important but it’s the younger, fatter animals that are likely to fetch a higher price. The UK aid funded ECRM project teaches farmers about the importance of meeting market demands and encourages farmers like Thandekile to see their farming as a serious, profitable business.

The project also runs 3 custom feeding programmes (CFPs) which prepare cattle for marketing. Farmers who use these low cost feedlots generally receive a better net price for their animals and the feeding centres have become a popular part of the ECRM project.

The CFPs also offer a perfect venue for training - farmers learn which animals are best suited to intensive feeding and they can see firsthand the benefits of veterinary care.

As well as setting up feeding centres, the ECRM project also brings the point of sale closer to farmers by establishing new auction pens and reviving existing ones that are under-used.

Raising incomes, reducing poverty

Levels of absolute poverty have been increasing in the Eastern Cape and more than 70% of the population live below the poverty line. By opening up the previously inaccessible red meat markets, the ECRM programme offers a sustainable way for rural black farmers to increase the money they make from their cattle.

Farmers who sell their animals through ECRM raise their net gain by 17% on average and with around 150,000 rural cattle owning households in the Eastern Cape, the potential for the project to help low income rural farmers is huge.

So far more than 2,500 farmers like Thandekile have benefited from the programme and in 2009 it was awarded the prestigious Mail and Guardian/Southern Africa Trust Drivers of Change Award in the business category.

More than peanuts

After a successful day at auction, Thandekile thinks the project has the potential to change lives.

“It (ECRM) helps us because we can sell a bulk of cattle,” he says.

“When we’re in our village we sell one cow or one calf, it’s not right, we just get peanuts.

“But if you sell a bulk of your cattle, you can get a lot more and do something that is needed in your home, like building or sending people to school.

“You can change your life if you sell a bulk of your cattle.”

DFID South Africa started supporting ComMark, who run the ECRM project, in January 2004 with £10 million of funding. ComMark run a number of programmes which aim to reduce poverty and increase pro-poor growth, including the Apparel Lesotho Alliance to Fight AIDS which won the Drivers of Change award in 2008.

The bigger picture on poverty

The first Millennium Development Goal, with its target of reducing poverty by half, is a daunting one.

Around 1.4 billion people, including over 50% of the population of sub-Saharan Africa, live on less than $1.25 a day - the World Bank’s measure of poverty. And the recent financial crisis has resulted in 64 million more people living in poverty by 2010 compared to a no-crisis scenario.

Evidence suggests a strong link between economic growth and poverty reduction. In China, 475 million people were lifted out of poverty between 1990 and 2005, when the country enjoyed economic growth of nearly 10% per year.

Although aid plays an important role in improving the lives of poor people, it is only in achieving sustainable economic growth that developing countries will escape from poverty.  

Laying foundations

To help people permanently lift themselves out of poverty, DFID is making wealth creation and economic growth a top priority. Encouraging investment and supporting the development of small businesses - such as cattle farming in South Africa - helps to lay the foundations for future economic growth. The private sector is the engine of this growth - creating jobs, increasing trade,  providing goods and services to the poor and generating tax revenue to fund basic public services such as health and education. Governments need to work with the private sector to increase entrepreneurship and job creation and to provide economic opportunities to empower the poor.

Development today is about creating conditions where the private sector can flourish, where small business have access to finance, where international trade agreements propel economic growth in poor countries. Ultimately it is wealth creation, private enterprise and jobs which will lift people out of poverty.

Published 17 August 2010