Wednesday, June 23, 2021

Disappointments in Agriculture wane the sector’s contribution to the economy

The contribution to food security which President Dr. Ian Khama alluded to in the State Of the Nation Address (SONA) on Monday and mentioned was assisted by the Economic Stimulus Programme (ESP) initiative could be immaterial given the setbacks the sector suffered in the past year, write SUNDAY STANDARD’s TLOTLO LEMMENYANE. 

Om Monday, President Khama highlighted the drawback caused by the large scale cattle deaths. This bears a significant effect to the agricultural sector because of the agro-industry development efforts that government has been putting into changing the structure and ethos of Agriculture particularly in the affected areas. He said with regard to food security and employment creation that ESP improved access roads to production centres, use of treated sewage water for irrigation, electricity connection to production clusters, and improvement of infrastructure at horticulture production areas and commissioning of a National Agro-processing plant.

 “There has, however, been an increase in livestock mortalities, especially cattle, in areas south of the Central District and northern Kgatleng and Kweneng Districts due to plant poisoning he said.  

In 2015 the Finance Minister Kenneth Matambo outlined with respect to the cattle industry initiatives which government had identified to be carried out through the cluster approach the end result of which is expected to be seen through the development of agro-industries. Matambo defined the cluster approach as a group of inter-connected firms, suppliers and related industries which work together to increase output from the targeted sector. He regarded the approach as practical in achieving economic growth and diversification. He mentioned at the time four identified clusters which included Cattle, Mining, Tourism and Diamonds. “Regarding the Cattle cluster development, three districts of; Central, Kgatleng and Gantsi have been identified for the first phase of implementing the concept. The concept will include, among others, ensuring that within each district, there is development of industries such as livestock feed processing plants, abattoirs, and refrigerated transportation to support the beef industry,” he had said. The increase in livestock mortalities adds to the numerous issues that delay the development of the agricultural sector. This was also not made easy by the fact that Botswana was declared drought stricken as was said by the President following drought assessment exercises carried out in February and March earlier this year. He said in that regard that government will continue its drought relief and special assistance measures until June 30 2017.   

In terms of funding towards the Agricultural sector, access remains limited. The paucity of funding affects the development of the sector particularly in establishing industries to support it. Based on the financial results from National Development Bank (NDB) as at March 2016 a wide disparity is seen in the bank’s loan book between amounts loaned to customers on Agricultural and Industrial activities. Although not conclusive the gap suggests that the relation between agriculture and industrial development remains at a formative stage. Total loans to customers at the closing balance was P733.3 million out of which Agriculture makes up P501.5 million followed by property at P140.9 million with Commerce falling third at P44.2 million which is followed by Other loans and advances at P30.1 million. Industrial and Retail tail behind at P4.3 million and P11.9 million respectively. The structure of the loan book shows that a significant amount of funds is committed to Agricultural activities.  Despite that Industrial makes up the least amount of loans the amounts written off from it gobbled a significant share at P1.5 million coming after Other loans and advances at P1.6 million. The amount written off from Agriculture was P631 000. Overall, the bank did not turn up profit for the year ended March 2016. It recorded a loss of P21.2 million which however is lower than the previous year’s loss at P48.4 million. A positive trend seen in the results is the commitment by NDB to the Agricultural sector. 

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