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Beef producers’ union, Gov’t lovey-dovey on BMC privatization

Beef producers’ union, Gov’t lovey-dovey on BMC privatization
March 07
09:39 2018

The Botswana National Beef Producers Union is nodding its head in agreement with government’s decision to finally privatise the Botswana Meat Commission

BUSINESS REPORTER

After what looked like a clash of interests, the government and the Botswana National Beef Producers Union (BNBPU) are singing from the same hymn book after the government acceded to the views laid out by the union that privatisation must be done cautiously after studies are completed and various reforms incorporated into a new model.

“The Botswana Meat Commission will be converted to a limited liability company and be commercialised to achieve operational efficiencies with an appropriate mix of ownership between farmers, legal entities and government,” the latter announced last week.

“This will require remodeling the business operations of Lobatse and Francistown abattoirs in two to three years.”

Government’s decision comes hot on the heels of a motion in Parliament two weeks ago by Ghanzi South legislator, Noah Salakae to end the BMC monopoly.

Salakae told Parliament that liberalisation of the beef markets was long overdue because the private sector was now developed, mature and capable, adding that with respect to the small farmer, the biggest reform to the small farmer was to afford them choices to sell their cattle where the price was better.

“And this can only be achieved when the monopolies are ended and when the export market is liberalized,” he said.

Debating on the motion, Agriculture minister Patrick Ralotsia said there had been discussions around the issue which forced his ministry to engage the audit and accounting firm KPMG to conduct a study on the beef industry and advise government on what needed to be done.

He said ending the beef industry monopoly would lead to a liberalised market, which could create efficiency and increased throughput.

The Chairman of BNBPU, Abel Modimo, has told Global Post that the decision to privatise the BMC was one taken by consensus and that the studies would be completed “very soon”. The union had, in late 2017, cautioned government to move with caution when privatising the sole farmers’ cooperative.

They were not impressed thatthe ministry had the audacity to present such a privatisation proposal to Cabinet without prior consultations with the BNBPU”. The Union also undertook its own study to run concurrently with that of KPMG and it was scheduled that both studies would take six months to complete.

BNBPU was not happy with the four-year delay to implement reforms to bring back the BMC to profitability and sustainability, which was essential. The union came out with a scathing attack on the Ministry of Agriculture for delaying to recognise it as a representative of farmers.

The privatisation of the BMC is not a new issue. In 2012, there was an attempt to amend the BMC Act to pave way for liberalisation of the beef export market and to privatise the BMC. The proposal was rejected by Parliament because cattle producers had not been consulted.

According to a statement released by the union in 2017, BNBPU had a meeting on 26 February 2017 with Minister Ralotsia who informed BNBPU that government was in the process of making a decision to privatise the Francistown and Lobatse abattoirs as government could no longer continue to subsidise the commercial operations of the BMC.

However, the Maun abattoir would be retained as a government entity and supported with an annual budget. This step was meant to ensure a market for cattle in Ngamiland and to guard against the spread of Foot and Mouth Disease (FMD) into the green zones until commercialisation was explored once the FMD status in the district had improved on a sustained basis.

A new parastatal would be formed in the form of a Livestock and Meat Industry Regulator for control of the livestock industry.

BMC has struggled over the years, calling for government to bail it out constantly. The Commission realised a net loss of P229.7 million in 2016, compared to a net profit of P332.6 million in 2015. The net profit realised in 2015 was due to a government cash injection of P600 million.

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