Tuesday, October 19, 2021

BMC takes a major step towards privatization

The Minister of Agriculture and Food Security (MA&FS) Patrick Ralotsia will next month (April) present his recommendation to Cabinet for the privatization of the Botswana Meat Commission (BMC).

Putting the final touches to his report, Ralotsia last week consulted beef industry stakeholders, stating that the long-awaited BMC abattoir privatization calls for holistic farmer-stakeholder support to avoid disgruntled cattle producer backlash.

Ralotsia who is also Botswana Democratic Party (BDP) Kanye North Member of Parliament (MP) said BMC’s privatization encompassing Government collaboration with the Botswana National Beef Producers Union (BNBPU) as the voice of the farmers coupled with expertise thoroughput from Audit and Accounting Firm KPMG, showed institutional goodwill and commitment towards the beef sector.

Government’s reduced role in BMC’s privatization was a healthy decision appreciated in the context of coach, referee and player matrix.

Due to outstanding issues, the date for Ralotsia to present his recommendation to Cabinet on BMC’s future has been pushed forward from February 22 to April 15, 2017.

During a consultative meeting held in Palapye on March 7 on BMC’s future and attended by cattle producers including the BMC Chief Executive Officer (CEO) Dr. Akolang Tombale, Ralotsia said the protracted parastatal’s privatization plebiscite now in its fourth year.

However, the focal points and ‘whatever’ decisions are made concerning privatization, should put cattle producer interests foremost, such as streamlining and bringing efficiency improvement to the beef value chain and understand the market dynamics.

Credit should go to communal farmers as they provide 80% of the country’s beef production.

The Minister said: “In principle the Agriculture Ministry and all parties involve should approve the proposals in the December 15, 2016 Presidential Directive in connection with BMC abattoirs future.

“Since establishment in 1953, BMC has two other abattoirs in Maun and Francistown, included in the Corporation’s future plans.

“The Lobatse BMC abattoir privatization splits the shareholding between government and the private investor.  Contrary to ongoing 50:50 shareholding misconceptions, as in all privatization programmes determination of the equity would be concluded between Government and the investor. 

“Due to its strategic nature surrounded by rich beef catchment areas, such as Ngamiland, that the Maun abattoir be retained as a Government entity, and be supported accordingly. Despite Maun’s high risk factors, Government’s due diligence upholds public perception and interest of the farmer at heart.

“Luck coupled with deliberate effort successfully eradicating foot-and-mouth diseases (FMD) 18 months ago has contributed to the Maun abattoir’s sustained operation.”

Expressions of Interest (EOI) have been invited for the disposal of the Francistown abattoir. At the time of establishment in 2006 the anticipation was the 380 daily slaughter rate would supply the then lucrative European Union (EU) beef market. Goals in this market will be shifting given uncertainties associated with the 2016 BREXIT. 

Swallowing the bitter pill of mothballing a blue chip investment such as the Francistown abattoir is the only viable alternative. The EOI has been designed as a cost-saving strategy in the wake of escalating utility costs, underutilized cold storage space and a fixed salary package year-on-year while the abattoir slaughter rates have dwindled from about 50% to nothing. 

For instance, out of the estimated 85 000 annual slaughters, the maximum for 2006 and 2011 has declined from 57 000 to a paltry 10 000, respectively. 

Under the auspices of an Independent Regulatory Authority (IRA), while mothballing is in progress, hope lies in affected farmers through the creation of a window allowing adjacent cattle producers the liberty to trek down south to Lobatse.

Reviewing of all the relevant legislative instruments forms an initiative in supporting the foregoing proposals to safeguard Government and public interests in the beef industry. The MAD&FS is convening consultative fora around the country bringing on board all key stakeholders on BMC’s future, as part of the process.

According to Ralotsia, “BMC privatization is in favour of restructuring the beef industry; no more, no less. Government is not the best body to run a commercial enterprise due to red tape due to many chains of protocol.”

Ralotsia called on cattle producers to address management challenges as the higher frequencies intermittent drought due to climate change. Diminishing pasture during prolonged droughts negatively impacting animal health, call for costly supplementary stockfeed, beyond the means of most small-scale livestock farmers.

The country’s haphazard rural settlement patterns stretch veterinary extension services and effective animal health education and awareness campaigns. In such environmental situations isolating animals even during transportation for slaughter to avoid spreading of communicable diseases such as Bovine Pleura Pneumonia (BPP) or cattle lung disease, lumpy skin or measles, is not feasible.

“Although Botswana maintains higher standards of animal health, BMC pays farmers a compensatory P150 for condemned cattle sold for slaughter. A health concern was the slaughter for consumption of animals on treatment or vaccination withdrawal periods. Let us manage our livestock according to the laid down veterinary standards to produce high quality beef”, he said.   

Former BMC CEO and cattle producer Dr. Martin Mannathoko said as long as the privatization provided a positive difference to cattle producers’ bottom line it would be a welcome development. The time is ripe for increased strategic integration and coordination between government, cattle producers andother stakeholders.

Mannathoko said: “As a cattle producer in the Sandveldt area, rated as one of the prime beef catchment zones, the Ministry holds responsibility to create innovative ways to disseminate essential information and solutions to farmers, including stud breeders, semen, embryo, bulls and heifer producers.

“Disease control and livestock traceability will facilitate restructuring of the beef value chain. Strengthening livelihoods through improved agricultural productivity will enable building the financial capability of households.

“However, huge pricing discrepancies between farm-gate and retail prices reflect more of a universal than individual country challenge. We are fortunate to be operating from Botswana, setting itself apart from the rest of Africa by paying the highest price per kilogram.” 

In his welcome remarks, Bangwato Kgosi Kgolo (Paramount Chief) Sediegaeng Kgamane said as cattle farmers, BMC is ‘our’ cultural heritage asset. “We are here to chart a way forward for BMC so that it serves Batswana best. The ultimate objective is to provide pathways to transform BMC as the national abattoir of choice, having come a long way.

“We are grateful for the Minister in including us in his itinerary so that we become part of the privatization process.”

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