Revolution without reform

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Between 2009 and 2012, the BMC lost approximately P727 million. For a company that has a legal monopoly of exports of beef from Botswana and exports only into lucrative preferential markets, the losses were staggering - and its doors would now be closed if it were not for the loan guarantees provided by the government. This article - the first of a three-part series by PROFESSOR ROMAN GRYNBERG - asks exactly why this situation came about

Botswana Meat Commission figures for 2013 are not yet available, but losses will almost certainly be much lower than in previous years.

The traditional business model of the BMC has seen that the farmer was in effect the residual claimant on the revenues of the BMC. What that means is that after all the costs were met, the farmer was paid in effect whatever was left over. After the nationalisation at independence, the levels of the costs of the abattoir rose and the share of BMC revenue that went to farmers steadily fell over time. A normal well functioning abattoir pays cattle farmers 80% of its revenues.  But by the 1990s, the BMC was paying farmers only some 55% of its revenues.  In the early days, the BMC was paying farmers approximately 80% of it revenue, but this steadily declined as more and more inefficiencies arose in the abattoir's operations. The industry was in crisis and decline in the 1990s as farmers left the industry in droves.

Editor's Comment
Boko should stop the fighting and start the delivering

With his theme of 'Delivering on Our Promise, One Step at a Time', he sought to project an image of a focused, determined leader building a new ‘Rome’. Sadly, parts of his speech were not about laying bricks, but about settling old scores.It is deeply worrying that a head of government would use such a pivotal national address to launch another bitter broadside against the media and his political detractors. His portrayal of the...

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