To be one of the best producers of beef and related products in the world and to have a committed workforce that effectively utilises the Commission’s resources by adopting efficient methods of slaughter, processing and marketing by December 2011.
To procure cattle and manufacture beef products for marketing nationally and internationally in order to maximise financial returns to Botswana cattle producers.
Primary Strategic Objective for 2009 to 2011:
To undertake a comprehensive restructuring of the BMC operations that
1. delivers a significantly reduced the cost base
2. improves throughput
3. improves processing efficiencies
4. achieves best prices for BMC products at least cost
5. ensures the long term sustainability of BMC
The BMC Strategic Plan was approved in November 2008 and all our plans for 2009 are geared towards achieving the annual objectives in the plan. Quite a few of the interventions which needed to have been in place when the year started are yet to commence and this will affect achieving targets for this year. The most important of these is the Direct Cattle Purchasing Scheme which only started Monday March 30th in feedlots and in the non-EU district of Boteti on April 6th and June 1st in Gantsi and Northern Kgalagadi. The good rains have been a mixed blessing in that they have led to very low throughput in the North where they came on time, but gave farmers problems of rounding up their cattle for markets. The rains were a bit late in the South and so animals were still in relatively poor condition the first two months of the year. Even though they were a bit late in the South, they more than made up for it when they did come and this will hopefully extend the season well beyond the normal peak period into August and September. The rains this year were generally good and there is adequate grazing for cattle. There was also an unusual winter rain through-out most of the country which will lead to signs of greenery as soon as it warms up. One should therefore expect from this, decent numbers of cattle with good weights for the last half of the year. Results so far have however been disappointing though which also points to the lack of price sensitivity of the traditional farmer who supplies the bulk of BMC’s kill.
Our hope of getting good cattle numbers with good CDM in the remaining months of the year rest on the new strategy of direct cattle purchase which now have over 10,000 cattle in feedlots. Even though this started late due to logistical constraints, it has moved quickly to build up numbers once it started. These cattle will be drawn for kill in the coming months which are normally low throughput months, giving us the numbers and good CDM’s. The good prices prevailing in the EU market has led to continued premium payment to be paid to the Botswana farmer.
Other initiatives that will improve cattle delivery to BMC will come from implementation of resolutions from the BMC organized permit workshop held in February 2009. Centralized permitting areas in districts have been agreed and we are currently working with the Department of Veterinary Services to have these implemented. The twenty-four hour receiving and off-loading of cattle by the BMC will also go a long way in not only improving the turn-around time for trucks but will also address animal welfare issues of bruising and dead on arrivals. This will help put more money into the farmers’ pockets where it belongs. Prices in the EU continue to be firm even though they have fallen slightly compared to the same period last year. We are however going into the second half of 2009 with uncertainty on beef prices as supply from Brazil is expected to come back on stream, with more and more Brazilian farms being registered for export to the EU. We expect prices to go down towards the last quarter of the year. BMC on the other hand is positioning itself to compete with the premier grade cuts that should enable a premium to be realized on price.
The review of the BMC Act, which was greeted with excitement by all in the beef sector when it started in 2006 seems to have stalled. Three years after the process started, it has not yet been presented to Cabinet. For a business like BMC where every cattle owner takes BMC as his or her own and wants to be consulted, there is a real chance of over-consulting to the point of paralysis. Amendment of the Act was greeted with excitement as it was going to bring massive changes to the industry for the first time in more than forty years. For the BMC, the benefit would have been the concomitant review of the fourth schedule of the Income Tax Act which deals with BMC taxation. BMC, unlike any other company anywhere, is taxed based
on turn-over instead of profit. We therefore still pay tax even when we have made losses, and profits in one year cannot offset the losses of previous years. This has been a bone of contention by the BMC for a very long time. We still eagerly await the review of the two Acts to bring BMC taxation in line with the rest of the world, which will enable BMC to offer farmers even more competitive prices.
The Francistown abattoir loss of Ngamiland Cattle due to the continuing FMD outbreaks in Zone 2 mandated BMC to take a strong and hard look at the opening of the Maun abattoir. The more than 350,000 cattle there were a wasting resource and the Commission was of the view that canned products from this resource can be profitable and bring good prices to the beef cattle farmers in Zone 2 than they are currently getting. The decision was then taken to refurbish the abattoirs, which we are currently busy doing, to be operational by end of the first quarter of next year. It is being re-furbished to the same capacity of 100 animals per day even though we are cognizant of the fact that it might have to operate in shifts to kill at least 200 cattle the first few years of operation in order to take care of the back-log.
As fresh product cannot be taken out of Ngamiland to Southern Botswana where the markets are, any product from Maun will have to be heat treated. The plan will be to install a heat treatment facility in Maun to heat treat the beef before being sent to the Lobatse cannery for canning. It can then be exported and/or sold to Government for the school feeding programme. Farmers have to be aware however that the basis for cattle payment will be the price received for the canned products less the cost of producing and selling it. It will therefore not be regional export parity prices currently being paid for the rest of the cattle in other parts of the country. The outlook regarding FMD outbreaks in the country is a course for concern. The Ngamiland outbreaks have been going on for far too long without resolution. Fresh outbreaks continue to be reported in cattle that have been vaccinated over and over again. This outbreak now threatens to spill into other areas as happened with Gantsi in October 2008. The outbreak is not only a threat to the neighboring districts of Gantsi and Boteti but also to the rest of Botswana in this era of mass and fast travel. We call upon Government through the ministry of Agriculture and the Veterinary Department to re-double their efforts to deal with the outbreak.