The Botswana Horticultural Market (BHM) has adopted a new trading system that will see the entity change its business model from commission-based to wholesale trade.
Under the proposed wholesale system, produce will now be bought out-right and all the trading functions will be taken over by the market authority. The BHM will also now import some produce that is not available locally to improve the produce variety for the consumers.
Under the old system, BHM would sell produce on behalf of the farmer for a 12.5 percent commission with the grower only receiving payment after the crop has been bought.
“Our turnaround strategy is as a result of relevant studies that were undertaken and have concluded that the commission model is limiting at various levels of operations, due partly to lack of variety of products, quality standards and consistency of supply.
“Having taken into consideration our purpose to serve as a price recovery platform for farmers, retailers, and consumers, we are introducing a new programme to address these issues and more, especially for the majority of small-scale farmers who are not happy with the statutory 12.5 percent commission they pay to BHM authorities and the fact that produce is delivered on consignment with the risk of loss remaining with them when the produce has not been sold,” read a statement from the BHM. The new wholesale trading system is also aimed at giving BHM more control in terms of quality control, quantities supplied, produce variety and guiding the production planning to meet the country’s horticulture needs.
As part of transformation, the Ministry of Agriculture, has put in place a plan that will guide all activities of the horticultural industry.
The aim will be to create a conducive and
“In preparation of changes, and as an interim measure, the Market authority has taken over all trading functions with effect from November, 01 2014, after terminating contracts for market agents on 31st October 2014. The Market authority will continue to trade under the commission system but with a reduced market commission of 10% instead of 12.5%.
“The changes at BHM are not only limited to overhauling the trade model but includes refurbishment of the Market infrastructure to improve the standard of our facility to cater to a higher level of hygiene, food handling standards and overall Customer service and Experience,” added the statement.
Preparation for work has already begun with the main trade floor already cleared and the on-site work expected to begin before the end of the year and will take approximately 6- 8 weeks to complete. Opening of the new market is expected to be in the first quarter of 2015 when it will start trading as a wholesale.
BHM is a company jointly owned by the Ministry of Agriculture through Botswana Horticultural Council (BHC) and Botswana Development Corporation (BDC) as part of the broader Government initiative of boosting local horticultural production, food security, economic diversification and citizen empowerment.
The Council owns 51 percent of the shareholding while the Botswana Development Corporation owns 49 percent. The Ministry of Agriculture is the promoter of the project.