BMC monopoly nears end as Cabinet approves meat regulator
Mbongeni Mguni | Monday September 19, 2022 06:00
The greenlight from Monday’s Cabinet meeting suggests that legislation for MIRA could come before Parliament’s November sitting, a schedule that is in line with announcements made in June by the Ministry of Agriculture.
BusinessWeek is informed that MIRA’s approval came during a marathon sitting of Cabinet on Monday where several other key memos were passed by ministers.
The new authority was first mooted five years ago, following studies by the Botswana Institute of Development Policy Analysis in 2015 and KPMG in 2017 on the country’s beef export competitiveness.
With MIRA as a regulator, farmers will be able to independently process and export their beef and other meat products, outside of the BMC system.
Commercial beef farmers have complained that the BMC’s monopoly limits value in the industry as the parastatal controls the slaughter, prices, and payment processes for most commercial-grade cattle produced in the country.
The latest developments also follow President Mokgweetsi Masisi’s comments at the Sandveld Ranchers Day in May where he said MIRA would promote the competitiveness of the meat industry sector.
“This will allow full participation of all key value chain players in the running of the beef industry, and the development of the necessary linkages that will have the net effect of giving the farmer ‘a voice,’” Masisi said.
Assistant Minister of Agriculture, Molebatsi Molebatsi told this week’s Conference on Agriculture and Food Security that progress had been made concerning MIRA’s establishment.
“You will be able to have your abattoirs, export your meat,” he said. “We want to catch up with Namibia because really they are ahead of us. We are not exporting to China, to the US which they are doing.”
The BMC has struggled to stay afloat for years, weighed down by the operating costs of its Francistown and Maun abattoirs, frequent disease outbreaks and more recently, poor throughput due in part to the live cattle export option given to farmers by government since October 2020.
MIRA’s impending establishment is expected to further deal the BMC a body blow, as the opening up of rival export abattoirs will remove its key vantage point and further worsen the capacity utilisation issues it has been struggling with at its facilities.
With the national herd declining in recent years and the birth rate still below desired rates, MIRA is expected to bring tighter competition for the available livestock in the country, a blessing for commercial farmers, but a knock for the BMC.
The corporation, which is undergoing a privatisation exercise designed to help it stand alone and compete in a liberalised industry, still enjoys the support of smaller-scale farmers for whom it remains the preferred market when compared to butcheries.
Smaller-scale farmers do not enjoy the economies of scale their commercial counterparts use to leverage the live export option and have expressed concern that the proliferation of rival export abattoirs may not necessarily benefit them.
“The BMC is the farmers’ market and private abattoirs are for their owners. “The idea should be for government to support a strong BMC that remains available to support the ordinary farmers and not leave them at the mercy of the bigger producers who could create an even worse monopoly than BMC,” a small-scale farmer said this week, on condition of anonymity.