The Meat Corporation of Namibia (Meatco) is a conundrum. But it suffers no shortage of suitors.
For now it suffers the life of a bat – not quite knowing whether it’s a bird or a mouse! It is caught up in serving the interests of its members, on the one hand, and, on the other, the demands placed on it by government. These interests are not always congruent.To understand the full implications of this unhappy situation we need to go back to its birth. Meatco, for all intents and purposes, is a continuation (our emphasis) of the SWA Meat Corporation, created by the Administration for Whites as per the SWAMeat Ordinance of 1986. Its object was to consolidate disparate and financially weak abattoirs of the day so as to benefit from the economies of scale. The Administration further extended a loan of N$36 million for recapitalisation. Meatco thus carries out the same mandate and has taken over the assets and liabilities of SWAMeat lock, stock and barrel.Despite this history, as well as the Meatco Act of 2001, government and Meatco continue to be an odd couple unable to sing from the same hymn sheet. This stand-off has outlived several ministers of agriculture leaving the baby in the lap of the present minister, John Mutorwa. To overcome this impasse, consultations were held last year and notes exchanged between the ministry, on the one hand, and Meatco and agricultural unions on the other. The latter have now embarked on a road show to inform members and the public of this process and their preferred outcome. These meetings are advertised as feedback sessions on the ‘Proposed Future Operational Structure and Legal Framework Document’. This action seems to have irked the responsible minister. And the parties are now involved in a war of words – negotiating by ultimatum – and risk throwing the baby out with the bath water. This would be regrettable. Trawling through the maze of the ‘Objects of the Corporation’, it is section 3(d) of the Meatco Act that captures the nub of what should drive any reform – i.e. that Meatco’s sole and/or overriding purpose is to serve the best interests of the producers. The parties would, therefore, do well not to mistake the wood for the trees. Part of its reform should address the disproportionate powers vested in the minister in directing the course of this business. In terms of its present constitution, Meatco currently has no shareholders/owners. The anomaly of a decidedly private concern being created by an Act of Parliament has to do with the conditions of the N$36 million loan. The authorities of the day wanted active involvement as a guarantee that the loan funds would be employed properly and solely for the purpose for which they were granted. GRN (Government of the Republic of Namibia) has thus inherited this situation. However, it appears not to be bothered by these niceties and has, as far as it is concerned, listed Meatco as an SOE under the SOE’s Act. Meatco, for its part, has repaid government in full, and with interest, the N$36 million loan of 1986, and only receives money from government for services carried out on its behalf. Last year government and Meatco signed a formal lease agreement on the use of GRN abattoirs in Oshakati and Katima. The assets acquired by Meatco since its creation must rightfully be employed to benefit members only.Despite the public punch-ups, the latest rounds of consultations have made quite some progress. The proposals emanating from a Working Group, made up of Meatco and the agricultural unions and GRN, seem to be marching to the same beat. They both agree that the present set-up is no longer tenable. They both agree the present operational structure and legal framework need to change. This will result in a producer-owned and managed co-operative. There is still no unanimity on whether to categorise producers in different classes e.g. communal versus commercial. And why GRN should be a member of the proposed co-operative, as the 1986 reason for active state participation, no longer applies. The alternative view is to allow GRN initial participation with notional shares but with a sunset clause on its membership. It’s argued that this involvement by GRN will allay fears that weaker members may be muscled out by established members during the transition. There may be some merit in this given Meatco’s assets. But instead of being an active shareholder, it may assist the transformation process by merely having government participation at board level.In Meatco’s present structure, each producer, irrespective of class, has only one share. However, benefits accruing to farmers vary depending on the number of livestock slaughtered through Meatco. The shareholding in the new configuration emanating from Meatco will most probably have shareholders who will receive dividends per share. Great care needs to be taken that the ultimate interest of getting the best price for the producer is not compromised. Livestock farming constitutes the bulk of our agriculture. And agriculture, in turn, continues to be the nation’s largest employer and source of livelihood for many. To be sure, Meatco is not the country’s sole abattoir. In fact, its share of the market is only about 25 per cent. However, it has this ‘unique’ status as a creature of statute and a beneficiary of tax income. Meatco has grown into a business with healthy reserves and an annual turnover of more than N$1 billion. Last financial year (2010/2011) 73 per cent of this turnover was paid over to meat producers in prices and bonuses. GRN should not be the elephant in the room in this transformation. It should be a mentor and facilitator to help find Meatco an optimum, fair and transparent business model.All parties – GRN, Meatco as well as the agricultural unions – should make this lunar year of the Dragon one of delivery on this front.
