13 Dec 2023

The delay in paying farmers by the Maun abattoir has been largely due to the running costs exceeding revenue generated from the abattoir.

Responding to a question in Parliament on behalf of minister of Entrepreneurship, the Assistant Minister of Local Government and Rural Development, Mr Mabuse Pule said the abattoir was operating at an extremely low capacity (an average of about 20 per cent of the designed capacity), due to low (number of cattle) throughout.

He told Parliament that the government provided special annual subversion for the Maun abattoir as a way of bridging the financial deficit.

Mr Pule further informed the house that the beef from the Maun abattoir sold slowly in the market because it came from a Foot and Mouth Disease (FMD) endemic area and therefore sold as boneless.

“Bulk off-take locally is by secondary processing through the Lobatse cannery, and to produce ECCO canned products,” said Mr Pule.

He said although BMC remained committed to its service charter of paying farmers within 14 days, the realities were that BMC Maun was only able to receive payment and/or revenue from the sale of cattle after 30-45 days.

“This negatively affects BMC’s payment turnaround time,” he added.

The minister said the government and BMC are working together on increasing markets for BMC Maun product and that it was convinced that such efforts coupled with stabilising the operations, would result in improved payment cycle times. 

He said BMC had the capacity to pay farmers in the Maun region and it was a reliable market for the farmers.

“The meat from cattle in the Maun region is processed at the Lobatse cannery facility. The two-year contract of the government feeding payment programme with BMC will alleviate the current Maun cash flow challenge, by improving farmer’s payments,” said Mr Pule.

He said the payment backlog had been contained as evidenced by the significant reduction in outstanding farmers’ payments.

He stated that as at the beginning of September 2023, the total owed Maun farmers was P21 million, but this had since been reduced to P1.4 million as of December 4.

He highlighted that the pace at which BMC was able to pay the outstanding balance was hampered by the fact that some farmers did not have bank accounts.

“To mitigate this, BMC continues to engage farmers to obtain details from the remaining farmers to utilise a debit card dispensation, done in partnership with banks, for processing payments for those without bank accounts,” said Mr Pule.

He urged farmers to continue having the confidence in BMC that they had demonstrated over the years.

Mr Pule further indicated that the challenges that BMC had faced in paying farmers in the Maun region had never been insurmountable, as demonstrated by the current pace of addressing what was a temporary setback.

He said the government feeding programme, running over two years, utilising beef from the Maun BMC, would go a long way in addressing the cash flow challenges that were impacting payment turnaround time.

Ngami Member of Parliament, Mr Caterpillar Hikuama had asked the minister to brief Parliament on the cause of the delay of payment to farmers by the Maun abattoir.

The legislator had also wanted the minister to further state the rationale by the abattoir to keep on calling farmers to bring their cattle to BMC while knowing well that the organisation had no capacity to pay the farmers.

The minister was further to state when the situation would improve and whether farmers should still have confidence in the abattoir and supply it with cattle. ends