Horticultural Market on the brink
Pauline Dikuelo | Friday December 2, 2016 18:00
BHM chief executive officer, Simon Meti said one of the shareholders, Botswana Development Corporation (BDC) has pulled out from funding the turnaround plan after expressing doubts over the project’s viability.
Last year, government through BHM engaged a South African company, Brand New Harvest as a consultant to come up with a strategy to revive the market.
The strategy suggested that BHM should start using the wholesale system compared to the commission one noting that it will be viable for the local market. According to Meti, through the wholesale system, farmers would be allowed to sell all their produce to the horticultural market and get paid compared to the commission arrangement where the BHM sells the produce on behalf of the farmers for a fee.
“The strategy revealed that the wholesale model could work well and revive the industry but unfortunately BDC did not think it is viable noting that it needs enablers that will ensure the sustainability of the market,” he said.
Initially government was supposed to inject P10.5 million, while BDC’s contribution was to be P9.5 million while the remaining P30 million was to come from financers through loans.
By then, the Ministry of Agriculture through Botswana Horticultural Council, which is the association of horticultural farmers held 51% shares while BDC held 49%.
Meti said in March this year, the BHM board recommended that it should be closed because they also felt that it was not viable as a lot of farmers were already disgruntled.
“Government representatives refused the decision to close the market saying they were going to consult with the ministry and other experts to find if there is another alternative,” he said.
It was then around July this year when the government pumped about P2 million into BHM for it to continue functioning and delivering, a move which Meti said diluted the BDC’s shares from 49% to 26%.
According to Meti, all government’s efforts were not enough to save BHM, as they needed a collateral to secure a loan.
“Government has delivered the P10.5 million they were supposed to inject which has been used to upgrade the infrastructure and continues to pay rentals in our warehouse,” he said.
Meti further said BHM was the only hope to the local horticultural industry which can create employment noting that they have since noticed a decrease in business.
Currently, BHM is using both the commission and wholesale models, which the CEO said varies according to the flexibility of the farmers.