Buoyed by good prices it gets from the key European Union (EU) market, the Botswana Meat Commission (BMC) said this week that it has increased cattle prices with effect from the first week of January 2009 when abattoirs open.
At their meeting of Monday 8, the board of governors of the government parastatal decided to make a general price increase of P2/kg CDM for all grades delivered to BMC, a move that has excited cattle producers who have been crying about prices.
The move is meant to increase production at BMC abattoirs at a time when the EU has opened an unlimited market access for Botswana beef under the Economic Partnership Agreements (EPAs) that are yet to be finalised.
“BMC will like to encourage all cattle producers to benefit from the opportunities that flow from these decisions and plan to take advantage of these price increases by delivering cattle to BMC,” advised Dr Motshudi Raborokgwe, Chief Executive Officer of the Lobatse-based outfit.
The EU scrapped the 8 percent levied on Botswana beef entering its market after the signing of interim EPAs deal although authorities raised concerns that local farmers will not meet the quota.
The EPAs replaced the Cotonou Agreement that granted Botswana a tariff quota of 18, 916 per year with a 92 percent reduction in customs duties. According to the BMC, the P2/kg increase is over an above the export parity prices which will continue to be the basis for cattle payments at the BMC.
Raborokgwe said that the average weight delivered to their abattoirs in 2008 has been 201 kg, adding the price increases provide an extra P402/head to farmers who bring their cattle to the BMC.
A local cattle producer, Willy Kathurima, says the price adjustments are encouraging to both commercial and small cattle owners since the industry is a primary business of Botswana and BMC has aligned the price to the EU market patterns.
He says as a livelihood for majority of the low and middle class folks, any form of an increase in the price of beef is not only encouraging but also socially and economically motivating.
“BMC is the largest buyer of this product and any price adjustment has a ripple and multiplier effect on the entire spectrum of the food chain,” noted Kathurima.
“Private butchers, breeders of cattle and buyers of agricultural land will have to pay more as a result of this positive adjustment. It is good news in the ears of the producer.”
The cattle producer was also impressed by the fact that BMC has finally attempted to adjust producer prices based on EU market patterns than being enveloped by South African beef prices.
He added that ultimately the culture of export parity pricing will be more specific to and in relation to the primary market of Botswana beef which is the EU.
“South Africa and others are secondary markets which do not work in tandem with our producer costs and price realities,” he noted.
“In fact, our beef production pattern differs greatly with that of RSA and even the products are further differentiated by the organic production of Botswana beef,” he observed adding that it is high time Botswana beef is branded.
Meanwhile, Kathurima said that the increase in price on the basis of carcass weights and matching of price paid for two and zero teeth cattle will encourage farmers to produce cattle that are price sensitive and discourage wastage, which has been the order of the small beef producer.
He added that farmers will be encouraged to change the farming methods and go for heavier cattle breeds and sell to BMC after some back grounding and feeding of cattle.
“The BMC appears to be sensitive to beef producers’ concerns across the board and it is now evident from the restructuring of BMC to provide attractive feeding and beef price regime. One hopes this will be managed and sustained for the mutual benefit of the producer and consumer,” he added.