With food insecurity once again top of mind, SUNDAY STANDARD’s SPENCER MOGAPI talks to Leonard Morakaladi on grain prices. Morakaladi is a farmer, former CEO at Botswana Agricultural Marketing Board and Board Member at Botswana Meat Commission
SM: To the best of your knowledge, do we have sufficient amounts of grain in store to help see Botswana through the next harvesting season?
As far as I am aware and based on media reports, Botswana is currently at an all time low with regards to levels of grain even before the next harvest season. It would appear in this instance almost all types of grains but certainly White maize and Sweet red sorghum.
SM: Farmers have complained either of late rains or below average rains, where does this leave the country in terms of available grain?
Yes, certainly farmers complaints about rain are genuine as we saw unprecedented amounts of rain in the months of December running into January. This meant that famers who had not yet planted only planted late in the season, while those who already planted saw their crops facing harsh elements from the heat that we saw earlier this year. We are clearly facing realities of climate change in my view.
If you look at the southern parts of the country where traditionally the country gets its maize and pulses, the current crop in the fields will not generate enough harvest to even cover one season. There are pockets of white and yellow which in my view will not yield anything more than 20 thousand metric tons. The country requires 5 times this amount. For pulses most crops in the fields have been affected by the weather and yields will not be enough. Pulses like sugar beans will certainly be in short supply.
SM: Food prices of related products like flour and maize meal have significantly increased recently, what do you anticipate in the next few months?
Most commodity prices have gone significantly up between 15-20%, but the highest has been cooking oil which seems to have gone up by close to 30%. Chances are prices for certain commodities like wheat, soya beans, sunflower will significantly go up due to the war situations given that Russia and Ukraine are amongst the top 5 producers of grain and oil seeds.
For maize, chances are prices will hold around the current 15-20% increase or even go down due the bumper maize harvest in South Africa – Northwest province.
SM: What is the state of agriculture supply chain at the moment and what can we expect in the next few months?
In my view the value chain is a bit fragmented in the sense that farmers produce this year are not necessarily aligned to actual patterns of grain demand. There will be very little sorghum produced as compared to pulses and oil seeds which is not a true reflection of where the deficit is.
There is an urgent need for all players to engage and align cropping plans with the national demand. Farming is a business and producers will base their cropping plans on where they can get a better return for any particular season. Prices of fertilisers and related inputs like seeds have gone significantly high and this cannot be ignored when prices are set. It is for this reason that the main grain off takers such as food processors etc need to align with farmers in order to manage expectations on pricing etc. If this is not done local farmers will have no choice but to produce for the export market which is not good for food security.
SM: Cattle feed is also most likely to be affected. What are the biggest risks faced by feedlots and cattle farmers in Botswana this season as a result of expected drought but also increased feed prices?
And how then do all those affect beef prices?
Maize is the main in-put in animal feed and as such any increase will mean an increase in animal feed prices and by extension beef prices. On feed supplement, prices have gone up 20-30 % as the fuel and chemical prices have gone up.
SM: Other than what is produced locally, where also does Botswana get its grain and how are events in Ukraine likely to affect us – on price and also on supply?
The war in Ukraine will for the foreseeable future dictate the grain prices. With two main producers of important grains like wheat and sunflower at war, demand will shift to the other major producers such as Brazil, Argentina, Canada. To that end the law of demand and supply will apply. However, in case of Botswana; South Africa and Zambia have always been major grain trading partners. So, for maize and Sorghum there are still options for the country to secure in good time like now, the coming harvest.
SM: Give us your analysis of Botswana’s food security as a result of these geopolitics but also our circumstances at home.
In my humble view commodity trade is one of the oldest forms of trade that should not be treated as a new frontier. This the time for the country to sign up with producing nations on major grains that are in short A supply. One of the biggest advantages we have right now is the dry port that Botswana has in Walvis Bay. This port plays a more important role now for the country to source quality grains from countries like Brazil and Argentina at competitive rates. Prices for shipment from China has since gone up 6 fold and for me the Namibian port is the answer provided supply contracts are signed now when abundant grain is coming out of the fields and looking for a market. Anything later than the month of May will see the country procuring at higher prices.
I believe one critical area that the government needs to look at is to change the current ISPAAD regime and only reward producers through price incentive after harvest as opposed to upfront through inputs. This will give the government an opportunity to pass on this subsidy to the consumer in the form of discounted grain prices. If this is not done most consumers will not afford basic staple feeds such as sorghum and maize meal, smaller food processors will close down as they will fail to procure grain at the current prices.
Lastly as we face the uncertainties of Ukraine war and of food security across nations, countries may choose to horde their grains for purposes of food security. As such important for Botswana to double up internal food production.
