Tumelo Setshogo
18 April 2008
Gaborone — On the back of a number of both favourable and unfavourable factors, the Botswana Meat Commission (BMC) recorded its highest throughput in 10 years and grossed P750 million last year, the company has said in a statement. But producers will not be paid any bonuses because they were paid up-front in the good prices prevailing last year.
The BMC slaughtered 171,299 cattle in 2007, a 25 percent increase on the 137, 336 slaughtered in 2006. BMC CEO Motshudi Raborokgwe attributes the increase to three main factors:
* Below average rainfall that led to poor grazing and a poor Cold Dress Mass (weight) which dropped from a poor 199,4kg in 2006 to a very poor 198kg in 2007;
* The outbreak of foot and mouth disease (FMD) in Zone 7, which meant that meat from the BMC's Francistown abattoir was not eligible for export to the lucrative EU market for 2007; and
* The extension of export parity pricing to most grades in April last year.
The statement says due to the increased throughput, good prices in Europe and favourable exchange rates, gross sales of P750 million were realised last year, representing a 64 percent improvement over the P456 million for 2006.
Out of the gross sales of P750 million, payments to farmers totaled P420 million compared with P286 million for 2006, a 47 percent increase in producer payment, The average price of cattle also doubled between the two years.
"As a result, the commission recorded an operating profit of P17,69 million for the year ended 31 December 2007," says the statement. "This was before appropriations to reserves and after taking into account tax remissions from government as well as the subsidy for keeping the Francistown abattoir open."
All the profit was appropriated to the Loan Redemption and Development Reserves, which both required P31.3 million, which included P30 million for a P240 million loan from Government payable beginning next year.
This left a deficit of P13.6 million which, in line with the BMC Act, will be absorbed through the Price Stabilisation Reserve, which currently stands at P54.65 million.
As a result of taking the profit realised to the reserves, Raborokgwe says producers will not receive bonuses for 2008 because they were paid "up-front in the good prices prevailing in 2007 and will continue in 2008".
The statement urges farmers to market their cattle in large numbers and to continue to support the commission to ensure better returns for all. But it notes that the good rains received in the first quarter of this year disrupted cattle marketing.
Even so, Raborokgwe says he remains "optimistic that the benefits from these (rains) will be felt throughout this year".
He notes that cattle provided by farmers is the lifeline of both the BMC and the farmers as a high throughput produces more beef to sell and "reduces the unit of cost of production, thus leaving more money for producer price increases".
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