Wednesday, January 27, 2021

GUARANTEED: P500 million market for farmers

By Bonnie Modiakgotla

Batswana farmers have been urged to tap into white maize production which already has guaranteed market and willing buyers.

Botswana requires at least 125,000 tonnes of white maize annually but the country’s far from reaching that demand – the highest production ever recorded from local farmers is 10,000 tonnes, revealed Nkosi Mwaba, an executive at Bolux, during First National Bank Botswana’s budget review seminar held last week Tuesday.

The wide gap between white maize demand and the local supply has been met through imports, mostly coming from South Africa which produces roughly 3.5 million tonnes of white maize. Mwaba said South African farmers produce in a week what Botswana based farmers produce in a year, and if South Africa was to have 5 percent excess and then dump their produce in Botswana, it will swallow up local white maize producers.

However, Mwaba said opportunities exist for domestic farmers when one considers the numbers involved. Botswana meets its shortage of white maize through importing about 115,000 tonnes which retails for R5,200 (P3,953), resulting in a huge import bill of R598 million (P457 million). According to the former president of Botswana Exporters and Manufacturers Association, there is no reason why Botswana should be losing these millions to outsiders.

“If we take the 10,000 tonnes of locally produced white maize, it is only 8 percent of what millers need. Thus we are utilizing P40 million on local farmers but the size of the market is P500 million, which means local farmers are missing out on the P460 million we are spending on imports,” said Mwaba.

“To those aspiring to be white maize farmers, you have a guaranteed market which is ready to consume P460 million worth of locally produced white maize every year. We are committed as millers to buy every tonne produced in this country,” he said.

Mwaba noted that it is not easy sharing borders with an economic giant like South Africa which leverages on economies of scale to produce white maize at low cost. He shared that farmers in Pandamatenga have decried the high costs of production in Botswana, and to this end, he advised that Botswana farmers will have a better shot of competing with South African farmers if local financial institutions could change their financing approach, while farmers should be encouraged to use technology to augment risks.

Mwaba added that the government should not be afraid to use protectionist policies to nurture the local industry against cheap imports. He said in other countries, farmers are empowered and they are even richer than millers. Mwaba took issue with the Botswana Agricultural Marketing Board (BAMB) for failing to do its part to grow the industry.

He said BAMB has been a hurdle despite its mandate as a market for locally grown crops. BAMB which has warehouses and silos spread across the country – with storage capacity in excess of 100,000 tonnes ÔÇô has been accused of playing hardball, preferring to stick to its rigid regime instead of flexibility.

Mwaba said BAMB refuses to rent out its facilities to farmers who might want to store some of their produce when they are not ready to sell. Instead, BAMB requires farmers to sell their produce at a fixed price determined by BAMB, which then sells to the millers at a higher price which is not negotiable.

“BAMB forces prices on millers. It’s time to unlock that monopoly,” he said.

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