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Gov’t to close, sell BMC F/town abattoir

In anticipation of the transformation of the local beef industry, Government is at an advanced stage to shut down and sell the Francistown abattoir.

Currently the Botswana Meat Commission (BMC) enjoys the monopoly of being the only exporter of Botswana Beef to the overseas market, especially the lucrative European market. However, the BMC has over the past decade been faced with maladministration issues, alleged corruption and huge financial losses. Lately, there have been calls and pressure on government to privatize the entity, end its monopoly and allow private entities access to the foreign markets as well as transform the whole beef sector.

Speaking at consultative meeting for Central District Farmers Association on Tuesday, the Minister of Agriculture Development and Food Security, Patrick Ralotsia revealed that his ministry has recommended to cabinet that expressions of interest be invited for the disposal of the Francistown abattoir. Ralotsia said all evidence from the abattoir’s poor performance proves that the entity is no longer economically viable. According to the Minister the abattoir was bleeding BMC coffers and consequently taxpayers‘s treasury as government had to keep on bailing out the commission to stay in business.

He said the abattoir was a loss making entity as cattle were not reaching it. Minister Ralotsia revealed to attendants that since 2006 the highest number of cattle slaughtered was 57 211 against the 85 000 of full capacity, while the lowest was 10 000 in 2011. He said the low number of cattle slaughtered meant that employees at the abattoir were under employed and literally paid for no work as sometimes they went for months without tangible labour required of them. “It is for these reasons that BMC had to retrench workers last year because the entity is not making profit,’’ he said.

Minister Ralotsia said government can no longer accommodate anymore bailout and injection of operating capital into an abattoir that is perennially running at a loss. He said that even though the Francistown abattoir had good infrastructure, it carried more risk than the Lobatse abattoir because of its geographical location and closeness to Zimbabwe, which is grappling with Foot and Mouth Disease (FMD).

If government does get rid of the Francistown abattoir, BMC would remain with the one in Lobatse, which is said to be currently doing considerably better in business terms. Reports indicate that the abattoir could however be privatized in future. The Lobatse abattoir is currently the best in terms of number of cattle slaughtered and marketing and also safeguarding the lucrative European market.

Minister Ralotsia also revealed that in a bid to transform the whole beef industry government has appointed consultants, KMPG to undertake the Beef Market liberalization study. KMPG is expected to further consult stakeholders on the proposed ending of the BMC monopoly, carry out scientific research and studies to determine the model through which the government can best dispose its stake and control of the beef sector and give more business operation functions to the private sector. At the end of the study KPMG will produce a report that will guide government on privatization of BMC and implementation of the study recommendations will commence subject to parliament and cabinet approval.

This week, Assistant Minister in the same Ministry, Kgotla Autlwetse told parliament that the BMC problems were now worsening as it is currently experiencing cash flow challenges due to low supply of cattle during the months of April to June 2017, which also spilled over into early days of July 2017. He revealed that this led to failure by BMC to pay farmers who supplied cattle to organisation. He emphasized that the Francistown abattoir was the worst affected as it only managed to slaughter less than 1000 cattle between January and March 2017 against an expected breakeven supply of 6 400.

Still at the Central District Farmers Association consultative meeting, Minister Ralotsia warned farmers against the increasing cases of measles, saying that the disease threatened the beef market. He urged farmers to be mindful of the vaccinating periods and regulations regarding the European Union (EU) market in order for Botswana to safeguard the multimillion pula market. He said after convening consultative meetings around the country to consult all key stakeholders on the future of the BMC, he would revert to cabinet with final recommendations.

Farmers against closure of F/town abattoir

However it emerged from the minister’s meeting that farmers are against the closure of the Francistown abattoir. Disagreeing with the proposition, farmers said government should wait for the Beef Market Liberalization Study that is yet to be conducted by experts from KPMG to give guidance to make an informed decision on the beef sector. The government, through the Ministry of Agriculture Development and Food Security proposed that the Lobatse abattoir be privatized, with its shareholding split between government and private investors.

Furthermore farmers commended the government’s proposal to retain the Maun abattoir as a government entity. It was reiterated at the meeting that the envisaged privatisation of the BMC should be compliant with the policy utmost citizen beneficiation and be made in a way that would benefit farmers. Botswana National Beef Producers Union chairperson, Mr Madongo Direng said the union supported the proposal to privatize BMC, adding that farmers had long advocated for a regulatory body. “The government cannot be a player and referee at the same time,” he said.He said the government should involve farmers throughout the process until the final stage. “We as farmers want to have a stake in the transformation process because there is no BMC without us,” he concluded.

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