Producers will be paid, under-pressure Meatco assures
Agriculture unions say Meatco’s repeated inability to compensate farmers on time continues to undermine their trust in the beef export company.
The company has, however, assured that producers will be paid - albeit more than two weeks late.
This according to a letter written by the Namibia National Farmers Union (NNFU), the Namibia Emerging Commercial Farmers Union (NECFU) and the Namibia Agricultural Union (NAU).
The letter - addressed to public enterprises minister Ipumbi Shiimi - was also sent to executive director Titus Ndove, agriculture minister Calle Schlettwein and Meatco board chairperson Sakaria Nghikembua.
The unions said Meatco plays a critical role in sustaining and stabilising the cattle industry, particularly during this period of drought. “Namibia can only consume a third of the meat it produces and we are reliant on effective export value chains.”
According to the letter, export abattoirs - as the last buyer of beef for export purposes - also stimulate the total cattle value chain. “If Meatco producers are not being paid on time, history shows that auction prices are then also negatively affected.”
The unions said during April this year, sudden “unforeseen circumstances” again delayed payment to producers.
As producers experienced delayed payments in 2022 and 2023, the question can be asked whether - or when - delayed payments will be experienced in 2024, the unions said.
Low producer prices
“We are therefore writing to express our ongoing concern regarding the recent payment delays and cancellations of slaughter slots experienced by Meatco producers.”
The unions acknowledged that while these issues have temporarily been addressed, there are pressing worries that incidents may recur.
In addition, the northern communal area (NCA) suffers from a shortage of high-quality livestock supplied to abattoirs for slaughter, the letter read.
“The reason for the low quality and numbers supplied are attributable to the low producer prices received in the NCA, which are 40% lower than the prices received south of the veterinary cordon fence. This is according to statistics of the Livestock and Livestock Products Board of Namibia.”
The unions added that these low prices inhibit the incentivisation of farmers, which would spur them on to expand and produce more quality cattle. This, in turn, threatens not only the operational viability of the NCA abattoirs, but impacts farmer livelihoods and the broader industry, the letter said.
“Therefore, it is imperative that the government in the interim provides for an NCA equalisation fund to cater for the gap realised in prices, while international markets are developed and the code of good practice is properly enforced.”
According to the unions, the ongoing drought presents an ideal opportunity for Meatco to navigate these challenges by achieving its production targets and consequently reduce financial strain. However, this can only be achieved through proactive and transparent communication, guaranteed payment and slaughter assurances to producers, they said.
“We kindly urge you to address these concerns promptly. Producers need assurance that they can rely on Meatco during these uncertain times.”
Maximising returns
NAU executive manager Roelie Venter told Namibian Sun that they’ve received feedback from the public enterprises ministry, which is working to find solutions and will provide further feedback. “We are therefore positive that the issue will be addressed.”
Meanwhile, Meatco CEO Mwilima Mushokabanji said due to the recurring drought, the company has a responsibility to assist farmers to destock and to create slaughter space at the abattoir to accommodate as many animals as required.
He said Meatco also has the responsibility of maximising returns for producers to ensure that they do not lose out on their investments.
“Meatco will continuously reach out to our producers and ensure that they are paid what they are owed.”
As a result of the drought, the abattoir is operating at a high capacity of 11 000 animals per month, he said. “We are operating this way because Meatco has a dual objective as a commercial entity to generate profits and remain profitable and a public policy objective to assist farmers to market their animals while they are in good condition to continue generating income.”
He urged stakeholders to bear with them during this challenging time.
“We will strive to pay our producers timely because this remains our ultimate objective. However, we might not always be able to pay within the 30-day payment period, but producers will be paid within one or two weeks after the 30 days have passed.”
Mushokabanji said should Meatco fail to pay on time, the company will communicate this to producers.
The company has, however, assured that producers will be paid - albeit more than two weeks late.
This according to a letter written by the Namibia National Farmers Union (NNFU), the Namibia Emerging Commercial Farmers Union (NECFU) and the Namibia Agricultural Union (NAU).
The letter - addressed to public enterprises minister Ipumbi Shiimi - was also sent to executive director Titus Ndove, agriculture minister Calle Schlettwein and Meatco board chairperson Sakaria Nghikembua.
The unions said Meatco plays a critical role in sustaining and stabilising the cattle industry, particularly during this period of drought. “Namibia can only consume a third of the meat it produces and we are reliant on effective export value chains.”
According to the letter, export abattoirs - as the last buyer of beef for export purposes - also stimulate the total cattle value chain. “If Meatco producers are not being paid on time, history shows that auction prices are then also negatively affected.”
The unions said during April this year, sudden “unforeseen circumstances” again delayed payment to producers.
As producers experienced delayed payments in 2022 and 2023, the question can be asked whether - or when - delayed payments will be experienced in 2024, the unions said.
Low producer prices
“We are therefore writing to express our ongoing concern regarding the recent payment delays and cancellations of slaughter slots experienced by Meatco producers.”
The unions acknowledged that while these issues have temporarily been addressed, there are pressing worries that incidents may recur.
In addition, the northern communal area (NCA) suffers from a shortage of high-quality livestock supplied to abattoirs for slaughter, the letter read.
“The reason for the low quality and numbers supplied are attributable to the low producer prices received in the NCA, which are 40% lower than the prices received south of the veterinary cordon fence. This is according to statistics of the Livestock and Livestock Products Board of Namibia.”
The unions added that these low prices inhibit the incentivisation of farmers, which would spur them on to expand and produce more quality cattle. This, in turn, threatens not only the operational viability of the NCA abattoirs, but impacts farmer livelihoods and the broader industry, the letter said.
“Therefore, it is imperative that the government in the interim provides for an NCA equalisation fund to cater for the gap realised in prices, while international markets are developed and the code of good practice is properly enforced.”
According to the unions, the ongoing drought presents an ideal opportunity for Meatco to navigate these challenges by achieving its production targets and consequently reduce financial strain. However, this can only be achieved through proactive and transparent communication, guaranteed payment and slaughter assurances to producers, they said.
“We kindly urge you to address these concerns promptly. Producers need assurance that they can rely on Meatco during these uncertain times.”
Maximising returns
NAU executive manager Roelie Venter told Namibian Sun that they’ve received feedback from the public enterprises ministry, which is working to find solutions and will provide further feedback. “We are therefore positive that the issue will be addressed.”
Meanwhile, Meatco CEO Mwilima Mushokabanji said due to the recurring drought, the company has a responsibility to assist farmers to destock and to create slaughter space at the abattoir to accommodate as many animals as required.
He said Meatco also has the responsibility of maximising returns for producers to ensure that they do not lose out on their investments.
“Meatco will continuously reach out to our producers and ensure that they are paid what they are owed.”
As a result of the drought, the abattoir is operating at a high capacity of 11 000 animals per month, he said. “We are operating this way because Meatco has a dual objective as a commercial entity to generate profits and remain profitable and a public policy objective to assist farmers to market their animals while they are in good condition to continue generating income.”
He urged stakeholders to bear with them during this challenging time.
“We will strive to pay our producers timely because this remains our ultimate objective. However, we might not always be able to pay within the 30-day payment period, but producers will be paid within one or two weeks after the 30 days have passed.”
Mushokabanji said should Meatco fail to pay on time, the company will communicate this to producers.
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