Feedback on Meatco annual report
The reallocation of the Namibian component of the Norway duty free quota as well as the impact of the implementation of the 90/40 day residency rule collectively reduced the revenue of the Corporation by about 47,9 million.
The reduced revenue from the Norwegian market due to an endorsement of a 50:50 allocation of the Namibian quota between Meatco and Witvlei Meat, reduced Meatco’s earnings by N$35,5 million in 2011/12.
According to Meatco’s Annual Review of 2011/12 the average producer price could therefore have been increased by roughly 1,35/kg if Meatco could have retained a share of the Norwegian quotas based on throughput.
Furthermore approximately 11 500 cattle were lost to Meatco during the implementation phase of the Namibian Livestock Traceability System (NamLITS) system.
According to the Annual report a contributing factor to the lower cattle number during the year under review was the practical implementation of the NamLITS and the 40/90 day EU residency regulation.
All cattle whose product would be eligible for export to the EU had to be registered on the NamLITS
national database and be verified for slaughter to comply with requirements of the rule. Due to various factors outside the control of Meatco large numbers of cattle presented for slaughter after 1 November 2011 implementation date failed the test and their product was limited for sale to the non-EU markets with a resultant major loss in revenue.
During November 2011 alone non compliant cattle slaughtered at Meatco facilities amounted to 25% of all cattle slaughtered. This forced the Corporation to activate an unscheduled shut-down of the Windhoek slaughter facility in order to mitigate unforeseen costs and losses during the implementation of the regulation.
An estimated 11 000/12 000 cattle more could have been slaughtered during the last three months of 2011/12 if all cattle available to Meatco were EU compliant and these problems were not experienced. The communal areas south of the VCF were affected the worst and very few cattle have been marketed after the implementation period.
The report states that due to the major negative revenue impact of non-compliant cattle, Meatco did everything possible to assist producers to ensure compliance but many cattle had to be refused for slaughter until such time as they complied with the NamLITS database.
Meatco as well as the directorate of veterinary services has initiated several measures to mitigate the impact of the 40/90 day regulation and to assist producers in registering cattle onto the NamLITS database.