Govt moves to address drought

SHARE   |   Monday, 30 May 2016   |   By Ditiro Motlhababne
Crops affected by hash weather conditions Crops affected by hash weather conditions

Cabinet will consider the 2015/16 drought assessment report submitted recently at its meeting on Wednesday, a day after the P445 million relief announced last year comes to an end. Three years of successive drought have hit the country's livestock and arable farming sectors hard, due to lack of sufficient rains across the country leading to depletion of pastures and water resources, which have in turn hit communal farmers hard. Consequently, local cereal production fell 90 per cent last year to just 22 000 tonnes, prompting President Ian Khama to declare a drought and extend a P445 million support for the agriculture sector. After the Wednesday cabinet meeting Government is expected to announce further relief to mitigate the impact of drought, currently ravaging the country. Communal pastoral farmers constitute over 80 per cent of the Botswana Meat Commission (BMC) suppliers of stock, which in turn makes up to approximately 20 percent of exports to the lucrative European Union market, raking in millions of pula for the abattoir and  by extension the national economy.

Drought subsidies

Persistent droughts have also led to crop failure and dwindling yields. The resultant crop failures have worsened food insecurity and created demand for government intervention to save both livestock and people from the effects of adverse weather patterns. To help farmers compensate for the loss of pasture and avoid livestock deaths, government introduced a 20 per cent subsidy on stockfeed prices during the 2013/14 season to mitigate the impact of drought on farmers. In June 2015 the subsidy stood at 25 per cent but was later increased to 50 per cent in December, against the backdrop of a worsening drought and dwindling pastures. The feed subsidy package-introduced through a Presidential Directive-covers lucerne, lab lab, maize/sorghum stalk bales and dairy meal.P52.8 million was allocated to the subsidy, while P38.9 million was set aside for emergency water supply projects. Feed is sold through Livestock Advisory Centres (LACs), which are now housed under Botswana Agricultural Marketing Board (BAMB) outlets countrywide. The drought situation has not improved in 2016 and farmers have been advised to sell some of their livestock and invest the proceeds to minimise losses. Farmers on the other hand complain that the subsidy does not benefit them as the farm supplies/ feed covered are never available at LACs. They are also reluctant to sell cattle to the BMC because of "low prices", extended turn around time in processing payments and the stringent tests applied on their animals, which has in some instances led to them being disqualified. To address their grievances BMC has commited to pay farmers within 14 days from the date of slaughter of their cattle. Communications Manager Brian Dioka said in a recent interview that such improvement is meant to avoid inconvenience on the farmers and to encourage them to sell more. He said the beef export monopoly recently increased prices to entice farmers. However BMC was recently forced to terminate the direct purchase scheme to arrest financial haemorrhage, which threatens to spiral out of control. Under the arrangement the abattoir incurred costs of keeping cattle under quarantine in feedlots to improve their weight and condition to satsify EU requirements before slaughter, thus raising expenditure in the process.

No maize grain

BAMB recently announced that they have no maize grain and are in the process of replenishing through imports. BAMB however said they have sufficient sorghum stock to take the country to the 2016/17 harvest season despite the two years of dry spell that the country experienced. BAMB has about 41 000 metric tonnes of sorghum and are in the process of importing 20 000 metric tonnes of white maize and 5 000 metric tonnes of yellow maize to cater for both commercial and strategic grain reserves stock. More grain was expected from  Pandamatenga farms. White maize is used to make pap (maize meal) and is more difficult to source internationally because the yellow variety is more widely grown overseas. In southern and eastern Africa, yellow maize is mainly fed to animals. Botswana has in the past sourced cereals from Zambia, Malawi and South Africa, including sorghum from the United States of America and Australia.

Bloomberg recently reported that South Africa (SA), the continent’s biggest producer of corn, became a net importer of the grain for the first time since 2008 this year, bringing in the most in two decades after the worst drought in more than a century hurt local output. SA’s corn imports climbed to 1.96 million metric tons in the year ended April 29, the Pretoria-based South African Grain Information Service said in a statement on its website. That’s the most since 1993. South Africa’s imports included 1.86 million tons of the yellow type, the most since at least 2004, and 96 932 tons of the white variety, the grain service said. Argentina was the biggest source of yellow corn at 1.12 million tons, while for white, Mexico was the largest supplier at 51 040 tons. Exports of white totalled 467 946 tons, while those of yellow were 215 577 tons.

South Africa last year had the least rainfall since records started in 1904, damaging crops and raising prices. It may need to import 3.8 million tons of yellow and white corn this year to bolster domestic supplies, according to Grain SA. To demonstrate the gravity of the current drought, the 2015/16 maize import volumes cost SA roughly R6.6 billion ($446 million), according to Agricultural Business Chamber. White corn for delivery in July rose for a second day, gaining 2.2 percent to R4 664 a metric ton, while yellow corn contracts for the same month fell 0.5 percent to R3 236 a ton by midday on the South African Futures Exchange in Johannesburg.

Govt support programmes

In view of the challenges, which have led to the near-collapse of the agriculture sector government has come up with programmes to sustain it, in recognition of its contribution to the local economy and its resilience to shocks besieging the world economy. In addition to short term subsidies, government has introduced the Intergrated Support Programme for Arable Agriculture Development (ISPAAD), LIMID, NAMPAAD, to support farmers. The general objective of the programmes is to commercialise agricultural production. Government has also joined forces with the private sector to develop a Leather Park in Lobatse for processing of cattle hides, which are currently exported raw to support leather industries in other countries. Such export has been equated to exporting jobs to other markets. Milk Afric, with support from government is on the verge of opening a dairy plant near Lobatse estimated to employ hundreds of locals at full production. The commercial production of milk and milk products on home soil is expected to reduce imports from the neighbouring SA by 30 per cent. Experts have, however, used different platforms to criticise government for the collapse of the agriculture sector. They point to government's reluctance to set reasonable living wage, promote procurement of local produce and imposing restrictions on imports to support local producers e.g. the horticulture. Government is also accused of running parallel short term programmes like Ipelegeng, which pay more wages than in the agriculture sector, thus discouraging people from engaging in farming. 

What went wrong? 

Experts warning that mines will run out in the next 20-25 years, has extinguished the euphoria surrounding the discovery of diamonds, which blinded us to the reality that the resource is finite. As such, failure to manage the transformation from a rural agrarian based economy to an urban industry based economy, has all but led to the collapse of the agriculture sector. The socio-economic ills of the local economy has led to some observers arguing that Botswana is a country experiencing growth without development. The negligence of agriculture following the discovery of diamonds and/ or lack of effective transformation is often blamed for Botswana's economic undoing. Diamond mining in Botswana started in the 1970s but the country only became a significant world producer after 1982 following the opening of the Jwaneng Diamond mine. The diamond industry accounts for 70-80 per cent of export earnings, a third of the GDP and up to 45% of government revenue. Just last week experts reiterated fears that diamond mining will run out in the next 20-25 years. To compound the problem mining, particularly diamonds, is currently struggling to recover from the worlwide slump in commodity prices, which has led to slash in production and closure of numerous mines locally and around the world. At Jwaneng mine-the world’s richest mine, demand fell by almost 40 per cent last year, as the world economy slowed and China cracked down on corruption. It is a gloomy picture! The share of agriculture to GDP in 1960 stood at 43.4 per cent before declining to 39.3 per cent in 1966 at independence. The downward trend in the share of agriculture has been plummeting unhindered over the years until it reached levels below four per cent since 1996 and ultimately dropping further to below three per cent since the year 2001 as reported by Professor Brothers Malema-Department of Economics (UB) in his contribution to the debate on the subject "Is the African Economic Miracle at the Verge of Economic Collapse? The Case of Botswana's Untapped Economic Potential".