The Botswana National Beef Producers Union (BNBPU) has welcomed government decision to bail out Botswana Meat Commission (BMC) with reservations.
BNBPU Spokesperson Andrew Seeletso indicated that although the P120 million is indeed a welcome intervention as it relieves the farmer especially under the current dire economic situation it must be remembered that farmers are just smarting out of over 10 years of a highly depressing situation where the BMC could take up to 6 months to pay.
“As the BNBPU however we feel that Government’s subversions to the BMC are not sustainable. The BMC needs to be released to the farmers to own through a Special Purpose Vehicle where they can recapitalize it through farmer contributions,” he said.
Seeletso challenged BMC to pay farmers within 2 to 4 days of slaughter adding that BMC is a farmer’s bank as farmers sell to raise immediate cash to use.
“When you go to your bank you withdraw money on the spot. Farmers use their cattle for cash instead of keeping money in the bank with low interest benefits,” said Seeletso.
He said some farmers had been owed for more than 30 days against the promised 14 days adding that this is way too long for farmers.
Farmers have on many occasions made a call to government to privatize the Parastatal in order to fully benefit the farmers.
BMC Chief Operations Officer Brian Dioka told this publication that although they are yet to receive details and official communication from government, they will start paying farmers early next month.
“We owe farmers for cattle supplied in June and July 2022 and hence the owing is just for a month (and these are just few farmers, because we have been up to date with payments, save for this few). The bulk of the money, once received/communicated to us officially will be for new purchases meaning for new cattle that will be bought within the balance of this financial year,” he said.
He added that there were delays (almost for 2-3weeks) in sales (selling of finished products) because of unanticipated compliance changes outside Botswana more to do with new compliance requirements for Europe.
“But that has been resolved now, with a plan to fully recover (and settle every farmer) latest by first week of August 2022 because currently products are already on the sea bound to customers,” said Dioka.
President Mokgweetsi Masisi has previously assured farmers that his government was committed to ensuring that payment delays at the BMC are resolved. Masisi said he was aware of the challenges at BMC regarding payments to farmers. He said the Commission together with the Ministry of Agriculture had been directed to come up with solutions to reduce delays in payments. The President said his government had already commenced the transformation of the BMC with the view to reducing government stake in the commission.
The Minister of Finance Peggy Serame announced during the week that government was aware that farmers were struggling because of delayed payments for cattle supplied to the BMC.
She stated that to alleviate this, government will provide loan funding to BMC from the public Debt Service Fund, up to a maximum of P120 million.
“This loan will be used for amongst other, enabling BMC to catch up on payment to suppliers, and to provide additional working capital. The disbursement of these funds to BMC will be subject to firm commitment by the commission to fulfil certain conditions,”
“These include the commencement of the BMC transition act, which provides the foundation for the permanent removal of the BMC’s beef export monopoly and for bringing in a private sector partner through a partial privatization. Both of these actions will improve BMC’s efficiency and long-term sustainability,” said Serame.