Tuesday, April 16, 2024

Shady deals feared in bid to end BMC monopoly

Sunday Standard investigations have turned up information suggesting that a big Botswana beef producer may have been promised a permit to export beef to the European Union by government once the Botswana Meat Commission export monopoly is removed.

The company, (name withheld), which has the capacity to process more than 10,000 cattle, has approached Zandbergen World’s Finest Meat, a leading EU meat trading company based in Zoeterwoude, the Netherlands, which sources products from the USA, Argentina, Brazil, Uruguay, Chile, Thailand, Australia, New Zealand, Namibia, Ireland, Scotland and Botswana and sells meat products to their customers in all 27 EU Member States.

Within the last two months, the Botswana company has approached Zanderbergen in an attempt to secure a deal to sell them up to 10,000 tonnes of Botswana beef per annum, apparently in anticipation of being issued an EU beef export permit by the Minister of Agriculture once the BMC export monopoly is removed.

Armed with the permit, it is estimated that the Botswana exporter and his associates could make up to P50 million profit from supplying Norway and up to P200 million profit supplying the rest of the EU if they have the capacity to secure all the EU eligible cattle in Botswana. At present, only feedlot cattle are able to meet the eligibility requirements for the EU.

Excluding Norway, Botswana’s DFQF (duty free quota free) access to the EU is estimated to be worth at least P1 000 per head more than any other market Botswana has access too. Farmer Associations have expressed concerns that if the BMC monopoly is removed, the benefits of EU premium prices will not flow down to local small scale producers who supply over 80 percent of the BMC’s total throughput. More particularly, the Farmer Associations are concerned about the Minister alone deciding on who benefits from Botswana’s preferential trade access to the EU.

The business deal proposed to Zanderbergen has raised concern about the transparency and accountability of how the exports permits will be issued once the BMC monopoly has been done with.
The concerns come in the wake of complaints that the Minister of Agriculture, Christiaan de Graaff, has repeatedly broken the law by issuing export permits for live cattle and meat in contravention of Section 21 of the BMC Act ÔÇô a charge he has vehemently denied.

It is understood that the row surrounding the removal of the BMC monopoly is already a subject of investigations by the Directorate on Corruption and Economic Crime (DCEC) and the Directorate of Intelligence Services (DIS). Meanwhile, parliament has suspended the debate on the removal of the BMC monopoly pending further consultations.

Section 21 says that only the BMC can export cattle or meat unless a person has been issued with an export permit by the Minister with the approval of the BMC. If the BMC does not approve, the Minister can still issue the export permit but only under exceptional circumstances and by declaring by order published in the Gazette that it’s in the public interest to issue the export permit without the BMC’s approval.

One such permit for the export of 30,000 live heifers and steers from Zone 2 in Ngamiland to the DRC was issued on 16 April 2012 under alleged questionable non-transparent circumstances to Pedally Holdings, a Botswana registered company controlled by the Page family of South Africa who are said to be closely associated with the Minister. Coincidentally, the Minister recently approved the allocation of one of the Banyana leasehold farms to the Pages.

The Pages ÔÇô father John and sons Glen and Bruce – own a company called Claremont Farming located in Cambridge, East London, South Africa which operates three abattoirs, a feedlot and a livestock export business that was recently featured for the second time on the SABC Carte Blanche expos├® television program for their inhumane treatment of the live cattle they export by ship to Mauritius.

De Graaf has a different interpretation of the BMC Act. He said that he is empowered to issue live animal export permits. The Minister insists that it is his responsibility to look for markets for beef and wonders what the fuss is all about. De Graaf said he was approached by one company, which he did not name, to export live animals to the DRC. He said that he gave the company the green light and has since passed the proposal by the company in question to the BMC.

“A certain company put a proposal on my desk to export 30 000 live cattle to the DRC. I gave them the green light. When proposals such as this one come to me I take them to the government to get approval. It is my responsibility as the Minister to look for new markets for beef in this country. Ngamiland is over populated with over 100 000 cattle, Bobirwa is also overpopulated with between 50 000 and 80 000 cattle and therefore, it is important to make sure we can market those cattle,” de Graaff told the Sunday Standard.

He said that his Ministry was working around the clock with the BMC to see if they can get an alternative market for beef as well as live animals.

“To my knowledge, not one animal has been exported to the DRC. My office has also received a proposal to export live animals to Mozambique, which has also been passed to the BMC. Again no live animals have been exported to Mozambique to my knowledge,” De Graaf said.

There are also allegations that the Minister has recently illegally issued another export permit without the approval of the BMC and without being Gazetted again in contravention of Section 21 of the BMC Act. This was to TNM Enterprises for the export of meat to Mozambique. The Minister has denied knowledge of the alleged export.

It is alleged that by issuing only one permit to the Pages, the Minister in effect has granted their Pedally Holdings Company a monopoly on live cattle exports from Ngamiland, which will prevent farmers from obtaining better prices for their cattle if there was open market competition from multiple buyers/exporters.

Though Dr. David Falepau, the recently fired BMC CEO, declined comment, another source close to the transaction has confirmed that the Minister introduced the Page family to the Department of Veterinary Services (DVS) and to Falepau with a proposal to export live heifers and steers to the Democratic Republic of the Congo (DRC). The Page’s proposal, which apparently was actively supported by the Minister, called for the BMC to buy live heifers and steers from Ngamiland farmers in Zone 2 on behalf of the Pages who would then buy them back from the BMC at P8.00/kg live weight even though the going price was up to P13/kg live weight. Falepau resisted pressure to do the deal because it would have resulted in a P40 million loss for Ngamiland farmers, for the BMC and for all cattle producers in Botswana who indirectly would have subsidized the Page’s purchase of BMC cattle at below BMC’s cost. The question farmers are asking is who would have stood to benefit from this P40 million windfall?

In their subsequent application to the Minister for a live export permit, the Pages offered to buy Ngamiland cattle directly from farmers and to pay the higher prices recommended by Falepau of P11/kg live weight for steers and P12/kg for heifers. However, as no pricing conditions were included in the Page’s export permit, there is no requirement for the Pages to stick to the prices they have offered to pay.

In another curious twist, in 2011 the Minister forced the BMC to pay the cost of upgrading cattle handling facilities and for DVS’ services which were necessary to support BMC’s export of live cattle to Zimbabwe. In contrast, to support the Pages export of live cattle to the DRC, the Minister is giving the Pages DVS’ services and the use of the Makalamabedi Quarantine camp as a handling facility for free.

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