Botswana’s food security under threat
Numerous factors have been identified as a major threat to the national food security, Botswana Guardian has established
Among these factors is that the current value chains are grossly fragmented with weak linkages as well as control by exploitative intermediaries and cartels.
These exploitative intermediaries entice farmers by offering them high prices to breach signed contracts, a matter that makes it difficult for the consumer, as a result of the high cost. There is a growing fear in Botswana following China’s decision to cancel buying corn and grain from the US and instead resorted to South Africa.
It is feared that this will worsen the situation as exploitative intermediaries will rush into Botswana and empty storages, as well as take farm proceeds and resell them at higher prices.
China is the world's largest consumer of feed grains and supports this robust level through both domestic and imported supplies. It has boosted its corn supplies with imports mostly from the United States.
It is also a major buyer of other US feedstuffs including sorghum and alfalfa hay. China has purchased roughly 2.75 million tonnes of US old crop corn since mid-March.
China's rising imports of grains and soybeans, much of which goes for animal feed, are largely driven by domestic pork demand.
Although still stable, SDRs are almost empty. There have been disruptions in the food chain of key grains - a matter that threatens the national food security.
Experts have identified the three major interrelated challenges including how to keep farm price high enough to provide production incentive to farmers, while at the same time keeping them low enough to ensure poor consumers’ access to staple food.
Another fact is that the food price instability and insecurity is a major challenge driven up by a number of factors including bad weather, reduction in production and commercial farmer’s non-compliance with contract agreements with state-anchor Botswana Agricultural Marketing Board (BAMB).
BAMB has 14 branches and 23 sales offices countrywide where it buys stores and sells produce and inputs. It has a storage capacity in excess of 100, 000 metric tonnes, 85000mt of which is silo space at Francistown, Pandamatenga and Pitsane whilst the rest is made of warehouses.
A four-year scenario analysis on Sorghum indicates that there is an average shortfall of about 45 percent of what was contracted, while on maize, the average shortfall is about 80 percent.
Last Friday, the Ministry of Entrepreneurship issued a statement titled, ‘Restriction and Importations of Scheduled Key Grains (Sorghum and Maize)’, announcing that there shall be no exportation or importation of sorghum grain except with the permission from the ministry.
Further that the exportation of the said goods should stop with immediate effect, whilst the importation of the same must stop on Monday 15 May 2023.
The statement reads in part, "the MoE wishes to announce the following regarding the exportation and importation of scheduled key grains as per the Presidential Directive CAB 9EXCO/2023 dated 25th April 2023, which restricts the exportation and importation of scheduled key grains (sorghum and maize).
“All harvested maize and sorghum by farmers subsidised or supported by government should be strictly sold to BAMB for storage, resale, redistribution, or further processing in the value chain businesses and trading activities of commercial farmers supported by government and engage in production of scheduled grains for food security purposes, as well as those operating in areas classified as Special Economic Zones be regulated”.
Asked what government is doing to ensure food security, as well as protect BAMB, Minister, Karabo Gare explained that they have realised that the action required is to tighten governance and coordination of the value chains, hence the directive.
He explained that the current market system is imperfect hence a need for government to intervene. Current market failures are artificial because of exploitative intermediaries and cartels.
"Otherwise there would have been no economic case for public policy intervention”.
He said the long term solution is the ongoing development and promotion of Commodities and Derivatives Exchange which would help address the impeding market constraints in an integrated way.
Gare said Botswana is an economy characterised by consumerism. "This explains why we often see the proliferation of retail shops and department stores who are not even interested in supporting our efforts to manufacture local products," he said.
He added that the growing middle class is in part the reason for immense eruption of consumption which is attracting retailing as opposed to manufacturing. He believes there is no better time than now to reconsider the definition of an “investor”.
"It’s time to start asking fundamental questions, for example, are these people's interest only to maximise profits without investing anything or do they have interest in partnering with the government to grow this economy?"
He said a study by Food and Agricultural Organisation (FAO) found that “intermediaries on average make 20 times more than what farmers received which translates into disproportionate large profit margins at the expense of the farmer. Food for thought! Why do we see the mushrooming of retail shops every day, when manufacturers close every day?"
According to an article on AGRIWEB China, China received its first cargo of corn from South Africa last week. This is a recurring theme with China as they seem to have made the strategic decision to buy products from just about every global supplier but the US.
It is largely a result of the rising trade tensions between the two countries, which is not good news for US exports to China.
It continues to state that state-owned grain trader COFCO bought the 2.1-million-bushel shipment of South African corn, which will be sold to domestic feed makers. Plus, between March 25 and April 14, more than 4.3
million bushels of corn left South African ports destined for China.
"China and South Africa have been doing some major logistic projects together. While we've been out partnering with our allies on growth, China has been sitting down at the table, putting together drills and opportunities for a lot of different countries, and they're winning over their trust," Bill Biedermann, AgMarket.Net co-founder said. Biedermann said that China has also made major investments in South American infrastructure. They struck more than 20 trade deals with Brazil and are currently buying their record soybean crop, and for the first time their record corn crop. But it doesn’t stop there.
"Aside from the massive increase in not just South American production, but their logistics in order to ship it out, is the relationship they have with China and the other allies we used to have strong relationships with," Biedermann says.
"Now our relationships with our own allies, quite a few of them, as well as China, who we were a pretty big business partner with, have really deteriorated, and I don't think that's going to reverse for some time."
Case in point: US export sales of corn fell to their lowest weekly total on record last week as overseas buyers, including China, cancelled purchases made earlier in the year. Total corn exports are down 35 percent from last year.
USDA forecasts that Brazil will overtake the US as the global supplier of corn this year and Chinese buyers have turned to that market as a reliable supplier of the grain.