Wednesday, October 4, 2023

Selling BMC will prove economically suicidal

Close to 80% of Botswana Meat Commission suppliers are subsistence farmers, many of them with no more than 100 herds of cattle.

Of all sdtate owned enterprises, this makes BMC a parastatal that has its heart closest to ordinary Batswana in the country.

No wonder, what happens at BMC evokes such passionate emotions among ordinary Batswana, always compelling Government to be seen to be acting, because what goes in there affects the livelihoods of ordinary people.

And as if that is not enough, BMC deals with a commodity that Batswana are instinctively, immensely and passionately attached to ÔÇô cattle.  

Thus as a basic rule a balance has to be maintained between prices that BMC offers to farmers and also making BMC viable and strong as a business.

In fact the two are not mutually exclusive.

Offering low prices to farmers in a quest to build financial buffers and war chests will with time prove self-defeating and inevitably ruinous to BMC’s long term sustainability as farmers will simply turn their backs on the abattoir in favour of privately owned butcheries, leading to eventual collapse of BMC.

A financially weak BMC is also not in the interest of farmers because it will simply not honour its payments to them, no matter how attractive its price list on paper.

Over the last few years, BMC has struggled to find its footing.

What has been wrong has been the response of the shareholder, mainly on account of misdiagnosis of the problems.

Problems at BMC had very little to do with management capabilities, save of course the misguided adventures to pay huge sums to feedlot barons.

Rather, the BMC problems had all to do with Foot and Mouth Disease and the resultant loss of the European market.

No Chief Executive, however smart can run a successful BMC under the current model without access to the European market.

And by its nature, lucrative as it is, the European Union market does not come cheaply.

It has a plethora of regulatory layers and conditions.

Fulfilling these conditions is hard and expensive.

These rules are rigorously enforced. And breaching a single one of them, however slightly is unpardonable.

Once suspended from the European Union market, re-entry is one of the most difficult things on earth. And even if admission is by chance allowed, one is forever looked at with suspicion.

This is the situation that BMC has had to contend with.

BMC does not manage animal and livestock disease control in the country.

That mandate falls with the Department of Veterinary Services at the Ministry of Agriculture.

And to put it mildly, the Department of Veterinary Services has done a royal mess in its management of livestock diseases, especially the Foot and Mouth Disease.

The situation at DVS has been at its worst in the last ten years or so.

To resolve BMC problems we have to first and foremost get the basics right.

At the heart of this lies improving, enhancing and strengthening DVS management of livestock diseases.

World class Chief Executives have in the past paid for DVS shortcomings by getting sacked for mistakes that were in no way of  their making.

Under the circumstances there is no shortcut to healing BMC without getting animal diseases control right.

And that with time will include having to choose between becoming a cattle ranching country, or a wildlife keeping country ÔÇô but certainly not both.

That has to be followed by diversifying and broadening the Commission’s market base away from Europe. There is no need for BMC to forsake the EU market.

But sticking only to Europe without making serious efforts to open and cultivate other markets outside Europe is risky, irresponsible and economically shortsighted.

Only then will tinkering with smaller issues that are management in character.

If true, recent reports that Government is willing to sell BMC is yet another proof, if proof was needed that our Government has run out of ideas.

Their impatience is only outdone by their readiness to sell assets in the belief that solutions will come their way.

But with BMC, ordinary Batswana, who are by far the biggest suppliers and customers of BMC, exactly those who this populist Government has always claimed to cheering stand to become the biggest losers.


Read this week's paper