Cattle ranchers want more freedom as live exports near P1bn

Original wealth: Cattle are hardwired into the Setswana concept of wealth PIC: MORERI SEJAKGOMO
Original wealth: Cattle are hardwired into the Setswana concept of wealth PIC: MORERI SEJAKGOMO

The country’s beef producers laughed all the way to the bank last year as the value of live cattle they exported reached close to a billion Pula. From years under the BMC-monopoly, the producers are enjoying greater freedom and they want even more, notes Staff Writer, MBONGENI MGUNI

The perennial tussle between cattle producers and the Botswana Meat Commission (BMC) revolves generally around the prices offered by the meat parastatal to farmers and the time the Commission takes to settle payments.

However, farmers over the years have been most frustrated by the monopoly the BMC enjoys in being the sole exporter of beef in the country. This monopoly has meant that the BMC is not just the single biggest buyer of cattle but dictates the prices and terms it extends to farmers. Farmers and the BMC have haggled for years over what “export parity pricing” means, the quality of stock delivered and the terms the parastatal has imposed on producers.

However, as part of liberalising the beef sector, farmers have been allowed to export live cattle independent of the BMC since October 2020. The export of live cattle has also helped test government’s the plan to remove the Commission’s monopoly and with the BMC struggling with cash flow and other issues, the relaxation has also provided farmers with a much need avenue for value.


Figures made available by Statistics Botswana indicate how local farmers have cashed in on the relaxation. In the last three months of 2020, live cattle exports went from zero to P447.2 million. In, 2021, the first full year available for the live cattle export, values sold hit P787 million by November. Late last year, President Mokgweetsi Masisi said live cattle exports would continue for the next two years subject to periodic reviews.

Farmers have tasted the Promised Land and they want more. Not only should the live exports become a long-standing arrangement, but government should also allow one or two private abattoirs to operate for exports.

The idea, Botswana National Beef Producers Union (BNBPU) secretary Andrew Seeletso explains, is that greater competition for farmers’ produce in the industry will in turn result in greater incomes and investment in developing and enhancing the country’s capacity.

“Where there is competition, there is growth,” he says.

“The only way the industry can grow is through the farmer who is the primary producer.

“If the farmer gets value, BMC will get the numbers of cattle it requires.”

Seeletso is alluding to the BMC’s failure last year to meet its annual 1,600 tonne quota to Norway for the first time in 12 years. The Commission said its failure was due to the under-supply of cattle by farmers and acknowledged this in turn was due to weak prices offered, poor payment turnaround times and the existence of the live cattle exports as an alternative.

The Norway quota is considered the BMC’s single most lucrative supply contract, representing 'best market value'. Being unable to fulfil the quota would have been a bitter pill to swallow for the cash-strapped parastatal, particularly as reports have emerged indicating that 700 or so tonnes that BMC failed to supply were delivered to Norway by Namibia.

By comparison, local farmers are thriving as a result of the values being secured by supplying live cattle to South Africa and Namibia.

“Farmers are very energised and you can see that from the auctions for bulls, where producers are buying large numbers in more regular sales,” Seeletso says.

“I had not bought bulls in five or six years but last year, I bought nine and each can inseminate 30 cows, which shows you the growth of the industry we are talking about.”

The BNBPU however, believes that the BMC not only plays an important role in the industry but needs to be better supported.

At present, although farmers are enjoying windfalls from live exports, they suspect buyers there are not giving them full value but rather only aiming to beat the BMC price. With a thriving, liberalised sector, farmers hope having a functioning BMC, live cattle export route and private abattoirs will steadily lead to higher prices for produce and better quality being developed within the country.

“With more cattle production, we could even see transport costs and other logistics go down and we could secure more lucrative contracts abroad,” Seeletso says.

“BMC is very critical to the farmer because if we kill it, we will have a private monopoly worse than BMC. “The BMC is the farmers’ market but private abattoirs are the owners’ market.

“Even with live exports, we support them, not at the expense of the BMC but for its benefit in terms of competition and the competitiveness it requires.”

Where farmers enjoyed P447 million in sales of live cattle in just three months of 2020, the BMC had a turnover of P394 million for the full year of 2020. This was from the slaughter of 19,671 cattle. In 2019, prior to COVID-19 and live exports, the BMC’s turnover was P691 million from 30,330 cattle.

The Commission acknowledges that live exports have enhanced or entrenched the cattle farmers’ bargaining power, “while weakening negotiations/power of processors in the value chain, including the BMC”.

“In essence, farmers have multiple pathways/routes to market their cattle – and national policy has therefore been revised to allow that even other aspects of the value-chain can/could equally compete with the BMC in any path of their choice,” BMC head of strategy, Brian Dioka says.

“We can differ with long-termising the current trend, especially on what this could potentially mean if not supported by inward investments in our own (Botswana) value-chain(s) vis-à-vis Botswana’s positioning in global beef trade and also what this means to already dwindling population of cattle in Botswana, which rather paints a bleak future of the country’s competitiveness.

“However the short-term benefits are that farmers in Botswana are accessible to immediate cash (cash-flow), while in the same processors like BMC would have to appeal/work on the images/service to farmers to re-attract supplies.”

The Commission is responding to the liberalisation through a strategic plan known as Meriting 2022/25 which has seven priority areas to re-attract local and even regional farmers towards the BMC. These priority areas, Dioka says, include organisational redesign, funding, optimisation of the value chain, stakeholder management, technology adoption, sales and marketing nippiness as well as uniquely positioning BMC using compliance-differentiators.

However brilliant the strategy, for farmers the bottom line will be the pricing and terms the BMC is willing to give them.

Dioka says the Commission has been increasing prices over the years and relaxing certain requirements in order to benefit more farmers. All payments are currently up to date and the BMC plans to cut settlement times to ten days by the end of this year and seven days by next year. Settlement times of 48 hours are on the horizon, he says.

“Ideally BMC would prefer all cattle to be slaughtered locally and only finished product to be exported so that Botswana retains its competitive advantage of its product's uniqueness,” he says.

“However, what we need to focus on is to make the farmer find the local market good enough to sell to, instead of exporting to live-cattle.

“Failure to do that will definitely affect not only BMC's sustainability but the entire beef processing in the country.”

Much will depend on the success of the Meriting strategy in transforming the BMC and allowing it to remain a powerful entity in a liberalised beef sector. Cattle farmers, in the meantime, will look to cash in on the windows that are currently open to them.

Editor's Comment
Tighten the law on drug dealers

Our youth are perishing; their once hopeful bright future is going down the drain; all because of illicit drugs.It is very easy to blame the addict, but it is not as simple as that! Drug dealing is a very lucrative business for some shameless people amongst our society and as such they have come up with tight strategies on how to push their business.Drug addiction is bad, and while the individual on drugs sometimes might have been the one who...

Have a Story? Send Us a tip
arrow up