Comparative Economics of Cattle and Wildlife Ranching in the Zimbabwe Midlands

Abstract

The economics of ranches in the Zimbabwe Midlands, generating income from cattle, or wildlife, or both, were compared during 1989/90 to test the claim that wildlife ranching can generate greater profits than cattle ranching on semi-arid African savannas. Both financial (market) prices and economic prices (opportunity cost) were used. Financial data were obtained from 15 cattle, 7 wildlife and 13 mixed ranches in four areas with wildlife and from 15 cattle ranches in two areas with sparse wildlife. Estimates of economic prices were obtained from official data. In the first paper, gross revenues, costs, net revenues, and capital investments of each ranch type were compared. Cattle ranches in the areas with sparse wildlife provided the greatest net revenues while only mixed ranches were financially profitable in areas with abundant wildlife. Wildlife ranches had the least capital investments. In the second paper a policy analysis matrix was used to compare financial and economic profitability. Excluding policy interventions, cattle ranches in areas with sparse wildlife were most profitable. Negative financial-economic profit differences showed that all ranchers faced production disincentives, but cattle ranchers were affected the most. In the third paper an attempt was made to quantify the cost of lost rangeland productivity due to overstocking. Carrying capacities and stocking rates were estimated and a range of overstocking costs was used. Cattle ranches appeared to be overstocked while wildlife ranches were not. Thus the larger economic profit of cattle versus wildlife ranches decreased when range productivity loss increased. The last paper compared the relative efficiency of cattle, wildlife, and mixed ranches from the financial perspective (using the private cost ratio) and from the national perspective (using the domestic resource cost). While few ranches were financially efficient, cattle ranches with sparse wildlife and mixed and wildlife operations were found to be economically efficient when overstocking costs were not charged. With increased rangeland sensitivity to overstocking, the probability of economic inefficiency increased more for cattle than mixed or wildlife ranches. This study did not corroborate the claim that wildlife ranching is more profitable or efficient than cattle ranching in semi-arid African savannas