Rural household sources of income, livelihoods strategies and institutional constraints in different commodity contexts - Institutional Constraints to Small Farmer Development in Southern Africa - page 45

In addition, farmers incur less low marketing costs. Private sales are therefore, the cheapest
and most probably, the simplest form of market outlet.
Nkhori (2004) reported that on-farm or direct sales to the consumer offer the greatest
profit margin on live animals for the producer because all middlemen and their fees are
eliminated. It offers a year-round marketing outlet; however the demand is irregular with
high demand during certain times of the year, like festive seasons and Easter holiday. Most
of the cattle traded in these informal markets are primarily old oxen destined for service as
draught animals and ultimately for slaughter (Swallow and Brokken, 1987).
2.10.2 Auctions
Livestock auction markets are established places of business where livestock are assembled
at regular intervals and sold by public bidding to the buyer who offers the highest price per
head (Nkosi and Kirsten, 1993). These markets are public markets open to all buyers and
sellers. As indicated by the NDA (2005), buyers include individuals buying for household
use, butchers, commercial farmers and speculators. Nguni cattle can also be sold at better
prices as breeding stock to breeders, commercial farmers and other communal farmers.
The number of cattle sold through auctions varies considerably between locations. This
influences the number of prospective buyers which in turn may affect the prices paid for
cattle at a particular market (Benson et al. , 2001). In the case of the Nguni, the Nguni
Breeders' Association do advertise these auctions, the prices paid in such auctions are very
high compared to convectional auctions were all breeds of cattle are sold (Nkhori, 2004).
2.10.3 Butcheries
Another available option to communal farmers is to sell cattle directly to the butchers.
Butcheries provide basic marketing services for farmers, particularly communal farmers,
who are unable to market their cattle efficiently and profitably through other existing
formal channels. Butchers enhance the marketability of livestock by acting as buyers in
their own right and by acting as buyers at auctions. Nkhori (2004) found that good prices
and farmers having a strong bargaining power in determining the prices of their stock are
the main reasons for some farmers' satisfaction with sales to butchers. For Nguni cattle
producers, they can sell their cattle to butcheries that do sell natural meat; hence there is
need for the beneficiaries to develop some contract with big butcheries like Woolworths.
Organic beef costs 8-12 US$/kg retail, compared with at least half that amount for non-
organic beef (ECDC, 2003b).