Determinants of Beef Meat Supply in Burundi: A Vector Error Correction Model Approach Applied to structural Nerlov Paradign

The issue of beef meat supply response is an important one as it has an impact on production, nutrition, and poverty alleviation. The traditional beef meat supply that characterizes the livestock sector of Burundi may be unsustainable in providing the desired amount of food meat to the growing population and may be chocked off by a stiff competition in the regional trade agreement, COMESA and EAC where South Africa, Botswana and Kenya are the leading beef meat suppliers. This paper mainly aims to determine factors affecting beef meat supply in Bujumbura based on the structural Nerlov paradigm. Time series analysis was used on annual data for a period of 40 years (1970-2010). Both co-integration and Vector Error Correction Model (VECM) were used to fine tune the Nerlov model and determine the long-run and short-run relationships between the variables of interest. Empirical results show that the long-run relationship exists through co-integration tests and beef price supply is inelastic (ε = 0.8) as it has been expected. The speed adjustment coefficient of partial adjustment of 18% indicates that there exist some production costs that slow and retard the beef supply function to adjust to price variation. Clear mechanisms to link beef and cattle producers to market and slaughterhouses in Burundi are desirable in order to reduce or eliminate factors that constrain beef supply in Burundi.