The Bolivian beef cattle industry: effects of transportation projects upon plant location and product flows in Beni

Ampuero-Ramos, Luis
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Bolivia has the potential to become an important beef exporting country in South America. However, to penetrate foreign markets (in Chile, Peru, and Brazil) she must upgrade her processing facilities. This calls for the construction of new slaughterhouses.;In the course of the 1980s, several new transport linkages (involving roads, railways, and waterways) are to be completed as Bolivians seek to integrate their territory. Most of these new linkages will connect the department of Beni, in the tropical lowland, with the rest of the country. It is in Beni where the greatest potential for cattle-beef production exists.;This study seeks to examine what will happen with the optimal location patterns of new slaughterhouses in Beni and factor-product flows as the new transportation connections are completed. The criterion of optimality selected in the analysis is the minimum combined costs of assembling and slaughtering cattle and distributing beef. Two beef qualities, four plant sizes, four levels of operation, and four export scenarios are considered. The analysis employs an iterative linear programming procedure.;It is found that the new transport projects have a negligible impact upon optimal patterns of plant locations, sizes and levels of operation and factor-product flows. This is so because: (a) For most routes, the new road and rail connections do not reduce transport costs of beef. As a consequence, air transportation continues to be the dominant mode for beef shipments; (b) there exist various institutional constraints, not considered in the mathematical model, which increase beef transport costs in relation to those of live cattle; and (c) given a slaughterhouse size and level of operation, all plant sites have identical processing costs.;The analysis indicates that alternative export scenarios have significant effects upon optimal locations, numbers, and sizes of slaughterhouses. This implies that plant location patterns should be formulated after foreign market opportunities have been carefully assessed.;Various factors were not considered in the analysis, such as other livestock types, taxes and levies, cattle by-products, and seasonal variations in the transportation infrastructure. The study permits one to focus on various areas in which existing information is weak. Several possible extensions of the analysis are suggested.