Namibia Economist (Windhoek)

10 August 2012

Namibia: Whither Meatco?

The struggle between government and the livestock producers over the future ownership and structure of Meatco intensified this week following last week's decision by the producers to reject government's involvement in the envisaged new structure.

A recent members meeting organised by Meatco, and attended by 300 livestock producers, is said to have overwhelmingly objected to a Cabinet decision made public last week by Hon John Mutorwa, the Minister of Agriculure, Water & Forestry.

According to the Cabinet decision, government will assume a 30% shareholding in the Meat Trading Company, an envisaged successor to Meatco while the leadership of a new Co-operative that will be formed alongside the trading company, will be comprised of regional representatives. In addition, the minister will have veto powers on all business decisions taken by the trading company.

These decisions, among others, are said to have riled the 300 livestock farmers, as they are opposed to the new setup especially without any explanation as to how government's shareholding in the new structure would be funded.

Furthermore, farmers are said to have expressed their disappointment with the non-transparent process through which the ministry developed the final proposal that was submitted to Cabinet.

Said Ebben Kalondo, Meatco's Senior Manager: Corporate Communications & Public Relations: "The producers were specifically concerned and disturbed by the lack of clarity on government's assumption of 30% shareholding in Meatco, the proposed regional representation when making up the leadership of the Co-operative, the inclusion of Meatco as a State-Owned Enterprise and a permanent veto right for the Minister of Agriculture, Water and Forestry with regards to business decisions."

The farmers are said to have been equally disturbed by the impact of the Cabinet decision on Namibia's free market economic principle.

"The example of the Botswana Meat Commission (BMC) - owned by the Government of Botswana, was raised. BMC incurred losses amounting to 400 million Pula during the last two years, these losses were absorbed by the Botswana government. BMC also lost its EU export status which has brought that country's livestock industry to virtual collapse.

"Another example cited was the Namibian sheep marketing scheme that has seriously diminished a once lucrative industry," Meatco said on Wednesday.

Kalondo said Friday's meeting reaffirmed the working group's proposal, as submitted to the minister last year, as the accepted proposal with regards to the future ownership and legal framework of the corporation.

The meeting requested that the board broaden the scope of consultation with the line minister, to include consultation with President Pohamba, with the aim to appeal to Cabinet to accept the industry stakeholder group's proposal.

Producers say the proposed bills, if promulgated, will affect the livestock producers and their livelihoods directly as it goes against the proposal by the industry stakeholder group that the two entities be established under existing Namibian legislation (i.e. Companies Act and Co-operative Act).

However, Minister Mutorwa shot back on Wednesday telling Meatco and its members that they should just accept "the announced ten final Cabinet decisions."

Mutorwa said: "Meatco and its members must now accept and clearly understand one thing: the MAWF Minister does not have 10 points. The Minister publicly announced ten final Cabinet decisions."

The minister said the Meatco board and all livestock producers should now concentrate on and provide their expected inputs towards the finalisation of the two proposed bills that will establish a 100% owned Livestock Producers' cooperative and the Meat Trading Company, 70% owned by producers and 30% owned by government.

He said government's shareholding in the trading company will go towards the establishment of a Livestock Development Fund which will benefit livestock producers.

Mutorwa added:"The envisaged Co-operative and Meat Trading Company will also be established through laws that will be passed through Parliament with or without those vocal minority who are so allergic to hearing the name: Government of the Republic of Namibia."

The two proposed bills are expected to be finalised in early 2013.

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