12 December 2012

Namibia: Northern Farmers Excited About New Meat Entity

Rundu — Farmers in the Kavango Region are optimistic that the soon-to-be established Meat Company of Namibia will address the plight of livestock farmers in the country.

Vice-chairperson of the Kavango Regional Farmers Union, Oiva Haimpumbu Mahina, told New Era yesterday at a farmers' information-sharing meeting with the Ministry of Agriculture, Water and Forestry that there are high expectations regarding the proposed Meat Company of Namibia.

"We expect the entity to benefit the livestock farmers in terms of proceeds from the animals they sell. At least the farmers must get something (proceeds) when they sell the cattle and when the company declares its dividends," said Mahina.

He expects the new entity to be operated on a business model instead of a sustainability model. "It will be good if the company is run on business principles in order to benefit all shareholders," he said.

He also noted that the livestock throughput to the Oshakati abattoir is not enough to sustain it. Speaking at the same occasion, Permanent Secretary in the Ministry of Agriculture, Water and Forestry Joseph Iita said government's decision to change the ownership structure of Meatco is a foregone conclusion aimed at creating more room for government in the meat industry.

"We are here to share information on the proposed bill that will eventually become an Act once promulgated by parliament. As alluded to previously, government will own 30 percent of the shares in the new entity, while you as producers will be the majority shareholders with 70 percent," said Iita.

Iita told those in attendance that the meeting was merely to solicit input from stakeholders and to change the clauses of the proposed bill where necessary.

Although government will only have a 30 percent stake in the envisaged flagship meat industry player, agriculture minister, John Mutorwa, will have a veto right when it comes to the issuing and allotment of shares as well as transactions outside the normal course of business by the company, with a shareholder or any other legal entity.

When the company borrows or lends money exceeding N$1 million the decision to approve or disapprove will also rest with the agriculture minister.

He said considerations and alterations regarding the bill would be allowed until the end of January. Farmers, government officials, Meatco and Meat Board members attended the information meeting.

The farmers were particularly concerned with Section 12 of the proposed bill, which states: "A director of the Board and any members of a committee who are not in the full-time employment of the Public Service or of the Company shall be paid from the funds of the Company. Such allowances may be determined by the shareholders, subject to the provisions of section 22(1) of the State-owned Enterprises Governance Act, 2006."

Farmers are particularly concerned that should the company appoint a board member who is in full-time employment of the Public Service, competency and dedication will be in jeopardy because there are no incentives.

"It will be very difficult for a government employee to leave his full-time job to attend board meetings where they sit for free, while leaving their work unattended," said one of the farmers.

While presenting the draft bill and the by-laws of the Meat Company of Namibia, Stephanie de Klerk from Shikongo Law Chambers indicated that the State would have to transfer properties such as abattoirs and feedlots to the entity to earn its 30 percent share.

"The decision to restructure Meatco from its current form was not benched on performance, because Meatco has been doing well, but government wants to be more involved in the meat industry since it contributes 40 percent of the global agricultural Gross Domestic Product," said De Klerk.

She added that government opted to take a minority stake so that livestock producers can receive more returns on their investments.

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