January 16, 2004

Beef industry woes expected to continue

Botswana's beef export industry is struggling to recover after recent outbreaks of foot and mouth disease (FMD) and persistent drought conditions. Two outbreaks of FMD over the last two years have seen a steady decline in beef exports to the European Union (EU) and other emerging markets, resulting in job losses as thousands of cattle were destroyed to control the disease. In 2001 the country exported beef worth more than P350 million (about US $72.2 million). As a result of the FMD outbreak in 2002, the Botswana Meat Commission (BMC) lost US $4.5 million. The BMC is expected to produce a disappointing set of financial results in 2003 after a further loss of about US $2 million, due to closing its meat processing abattoirs to ensure full compliance with the strict certification requirements of the EU. "This closure was necessary to ensure rapid response to the identified shortcomings, which could not be adequately addressed while the abattoirs are in full operation," Micus Chimbombi, director of animal health and production, said.

Botswana enjoys greatly reduced tariffs, or tariff quotas, on fixed quantities of beef exports to the EU. The EU market continues to be the leading destination for Botswana beef, accounting for 68.3 percent of sales in 2001. But the country has never been able to fulfil its annual quota because of low productivity and, more recently, drought and outbreaks of disease. However, the EU faces competition from other markets. "BMC's policy is to divert the meat to the market with the highest net returns. Norway and Reunion prices are always better than that of the EU hence their requirements are fulfilled first," BMC Executive Chairman Raborokgwe said.

Botswana's beef exports are internationally well-liked since cattle are raised on rangelands free of chemical treatment. Farmers are also given advance payment to purchase feed and breeding stock to improve the quality of herds. The pre-payments are recovered from slaughter proceeds, on condition that money disbursed is for cattle delivered exclusively to BMC. Frequent droughts have had an adverse impact on the quality and quantity of farm output but analysts believe that cattle farming will survive despite the current problems in the industry. As Leutlwetse Tumelo, the managing director of Business Data Services has said: "Jobs in cattle farming offer very low remunerations, little or no job security, no specific conditions of service - and these jobs are usually very physical. If jobs in this industry offered better or comparable benefits, then it may be possible to reverse this flow, and maybe the industry will grow." (IRIN)


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