10 Dec 2019

The Botswana Meat Commission (BMC) owed farmers P167, 2 million as at December 2, 2019.

This was said by the assistant Minister of Agricultural Development and Food Security Ms Beauty Manake in Parliament, who further noted that the number of farmers that were owed by the Botswana Meat Commission (BMC) was 364, both as individual suppliers or as trading companies.

“Of this total, 241 supplied BMC Maun abattoir, while 123 supplied BMC Lobatse abattoir,” she said.

Minister Manake said BMC had a total debt of P468 million, between farmers, other creditors, materialised liabilities (litigation costs), and bank credits/loans while it also had a salable stock (beef products) worth P146 million. She, however, said the Commission was also owed P69.7 million by debtors.

Ms Manake said the BMC had been awarded a short term supply contract worth P32 million for canned stew steak (for the Ministry of Local Government and Rural Development) by end of January 2020. 

“With these efforts, the Commission intends raising a total of P247.7 million that will settle a larger component of Creditors, being cattle farmers. The commission is also currently engaging local commercial banks to generate a short term bank facility/overdraft to address both immediate and future working capital requirements/needs as well as other obligations,” she said.

She said the government had no immediate funds to bail out BMC, but rather was working on alternative ways to drive performance and productivity for a much sustainable BMC going forward.

As initial steps to this, she said in February 2018, government-approved desirous reforms to ensure the sector-wide performance of the beef sub-sector and by extension the BMC, which included repealing of the 1965 BMC Act and replacing with the BMC Transition Act, which the 11th Parliament approved in September 2019.

She said owing to the development and policy adjustment, the government had occasioned temporary live-cattle exports until March 2020 and would review the performance/impact of this decision thereafter, and to also guide on subsequent steps.

She said the government had also decided to support BMC Maun operations, outside BMC groups’ balance-sheet, by P20 million on per annum basis.

“Government capital assistance is at a total of P370 million for 2019 alone, which 100 per cent of it, was disbursed to farmers in the months of April and August 2019,” she said.

These efforts although plausible to their decisiveness in seriously dealing with BMC’s performance issues, she said they also had negative consequences such as job losses and diminished economic activities at municipal/district level. 

Ms Manake, however, said the results were gradually being achieved, with envisaged success in the medium to long term.  

She said BMC had been overwhelmed by legacy challenges and the ineffectiveness of the beef supply chain. 

In this regard, she said efforts were ongoing to procure the services of a company to conduct a forensic audit on BMC.

She further said that the findings of the audit were expected to provide clarity on what led to BMC going into debt.

She said the assessment of the temporary live-exports in March 2020, she said would also help validate and revise assumptions of making the sub-sector efficient.

Minister Manake was responding to a question from the Member of Parliament for Palapye Mr Onneetse Ramogapi regarding the number of farmers that were owed by the BMC, the total amount owed to farmers and the total debts of BMC.

Mr Ramogapi also wanted to know how the ministry would pay the farmers, whether there were any plans to bail out BMC, and why the BMC fell into huge debts as well as an update on the export of beef or liberalization of BMC market. ends