Figure 4 provides a stylised diagram of the TL beef industry with some notable features. First, there are few commercial inputs into the cattle production sector. Almost all investment, breed services and feed is derived from within the household systems. Farmers also manage most animal health problems independently, but the state and development agencies have paid considerable attention to building public and private systems (although these can be hard to see on the ground). The vast majority of cattle are produced in “mixed” cow-calf – feeding households, in various production systems (from extensive grazing to cut and carry). There are only a small number of specialised fattening households (that buy in feeders) the majority of which are contracted to CCT (in Oecussi) are integrated (as holding areas) into trading operations.
Figure 4. supply chains in the Timor Leste beef industry
From this common supply base, there are various inter-linked supply chains.
- At the top of the diagram, about 5,000 cattle (or 25% of national turnoff) are slaughtered for ceremonies. These can be supplied from the household and family networks, from traders, or even CCT in Dili.
- The majority of cattle are marketed through spot marketing systems in a hierarchy of collectors, smaller traders (that buy cattle) and larger traders (with the working capital to buy in larger quantities). Many traders slaughter their own cattle (in yards or at market) i.e. as slaughtermen. Perhaps 5,000 cattle are sold through spot markets in Dili (25%) and another 5,000 in the 13 districts.
- Another 5,000 cattle or so are traded live across the border to Indonesia, although this informal trade has been disrupted in recent years.
- This leaves about 1,000 cattle that are sold outside spot markets, approximately 360 through CCT and 660 that are (service) slaughtered through the central abattoir in Dili and to three private butcher shops. These can be regarded as “higher value” supply chains.
- The centralised abattoir and butcher shops have not yet developed the capacity to replace imports, which is high-value but small trade (equivalent of 1,000 head).
Government, development agencies and larger agribusiness actors aim to increase the relative importance of the higher value sector (especially centralised slaughter and butcher shops) and reduce the relative importance of other chains, including ceremonies.