Monday, November 4, 2024

A Revolution needed to save BMC; and with it subsistence farmers

For many years, long before independence, the Botswana Meat Commission has been a farmer’s pride and joy, but not anymore.

The founding statute establishing BMC was carefully crafted with a farmer in mind.

In a very direct way, the true shareholders of BMC were not the Government, but rather the farmers that sold their cattle loyally to BMC.

This statute has been a unique creation not repeated since.

Yet for at least two years now, Botswana Meat Commission has been failing to pay its cattle suppliers on time.

The situation got out of control after Government stopped its occasional subventions amounting to bailout to the Commission.

That was after the Government had just paid out close to P500 million so that the Commission could honour its obligations to cattle owners.

But owing to an old and long backlog of debt to farmers the money quickly ran out, in the same way that other such previous tranches had done.

Since then, Government has declined to give anymore soft loans to BMC, pushing instead for BMC to either change its business model, or even sell some of its assets.

There is no doubt that BMC has been inefficiently run.

But by far more troubling has been the fact that BMC has been under-capitalised.

This has to be corrected.

And to correct that, there is no need for BMC to be in private hands.

BMC relies on a steady supply of cattle from farmers, over 80 percent of who are subsistence farmers.

But surprisingly, instead of giving priority to these farmers, BMC managers opt to give such priority to commercial farmers.

This simply does not make commercial sense.

The Board of BMC should also wake up to the fact that contrary to an army of experts arguing for privatization of BMC, this Commission is not a monopoly.

It competes with butcheries and feedlot owners, who do not only pay competitive prices, but also run more efficient business modes, have shorter return cycles and more crucially pay suppliers cash on delivery.

In the absence of any cash to pay cattle suppliers, more and more farmers have been opting for avenues to sell their cattle.

And there is no shortage of such avenues ÔÇô hardly ever a situation in a monopoly that BMC is made to be.

It is deeply deplorable that such a renowned and immensely respected company such as BMC could struggle to convince a democratic government, officially a 100 percent shareholder, on whose good it exists.

BMC exists for small farmers.

And it has served them well.

What is needed is to sufficiently recapitalize it, get it a good business model, get it good and well paying markets.

It is unfortunate that too often in its history BMC has been criticized and made to pay for inefficiencies of the Department of Veterinary Services.

Every time there is a Foot and Mouth disease outbreak, it is a given that BMC will take a knock.

It is not among BMC mandate to manage cattle disease outbreaks in Botswana.

That is the sole mandate of DVS which also supervises BMC.

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