Wednesday, July 6, 2022

Cattle-rich Botswana advised to import beef asap

At various times in its history, Botswana has had more cattle than people, thus it come as something of a surprise that experts are advising the country to import beef. All this doesn’t make sense until the experts give their reasons.

As a way of protecting and promoting the development of the Botswana beef sector, the government has banned the import of chilled and frozen beef. A beef value chain analysis action plan that was developed under the framework of the Private Sector Development Programme (PSDP says that this policy is misconceived.

“The absence of cheaper beef imports means that some of the domestic cattle that could be exported at a higher value is consumed domestically,” says the plan warning that unless import restrictions of lower cost and quality beef are lifted, the amount of beef available for export will reduce further over time. “Beef imports would also reduce the seasonality of supplies to the Botswana Meat Commission.”

It recommends importing lower grade beef in order to substitute higher grade beef for export as well as undertaking secondary pro­cessing, including canning, for the lower grade import beef and re-exporting it in order to build a sustainable export capacity. What may seem like a radical suggestion is actually par for the course in some First World countries and Botswana is merely being advised to adopt business practice that is working elsewhere.

“In practice, a number of countries both export and import beef, exporting low value beef and importing premium quality (usually in more developed economies ) or vice versa in less developed ones. For example, in 2013 the United States exported US$6.8 billion of beef, and imported US $ 3.6 billion. Other such large active traders in the top 10 exporters and importers are the Netherlands, Germany, Italy and Canada. This practice is an important consideration for Botswana going forward,” says the plan which was put together by five-member panel.

However, what stands in the way is the BMC Act which gives the Commission a monopoly on the export of beef and livestock and is not a departure from the wider Southern African Customs Union market norm which is protected from external competition by a 40 percent tariff. A number of studies and reports have recommended the lifting of the BMC monopoly – at least for live animals in the first instance, in order to enable farmers to achieve higher prices and improve the viability of producers.

“Botswana is a relatively low volume producer and exporter of beef in the global context. Unless import restrictions, for instance of lower cost and quality beef, are lifted, the amount of beef available for export will reduce further over time. The cost-benefit of activities would need to be carefully analysed in meeting various strategic objectives and implementing the proposed roadmap. For example, although diversification in products and markets is desirable, there are limits to how much this can be achieved before the resources required outweigh its benefits.”

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