NAMIBIA – Farmers unions in Namibia have called for the division of Meatco, a key player in the country’s meat processing industry, into two independent subsidiaries to boost the profitability of cattle production and resolve ongoing issues.
These suggestions were jointly presented to the parliamentary standing committee on economics and public administration during a hearing in the parliament.
The proposed structure involved establishing two separate subsidiaries: Meatco NCA and Meatco South (NewCo).
“Each subsidiary would allow shareholding by its respective producers and private investors. The goal of this division is to ensure focused decision-making, efficiency, and independence, with separate boards and management teams for each subsidiary,” the unions stated.
According to Roelie Venter, the manager of the Namibia Agricultural Union (NAU), the current management of Meatco is not effective, leading to the need for continuous government bailouts to sustain operations.
“A significant bone of contention has been Meatco’s alleged late payment to farmers, which has eroded trust and disrupted the beef value chain,” he noted.
The Cabinet had directed the Ministry of Agriculture, Water, and Land Reform to enter into a cooperation agreement for the operation of the Rundu abattoir and support other abattoir operators in the northern communal areas (NCAs).
Meatco was tasked with operating the Oshakati abattoir, but currently, only the Katima Mulilo abattoir and a small mobile unit in the NCAs are operational, with limited capacity and cash flow issues.
Farmers expressed concerns that the support provided by the government, amounting to nearly N$800 million since 2020, has disproportionately favored southern regions over NCAs.
The unions emphasized that this imbalance is particularly given by the impending drought, which has prompted farmers in both regions to sell livestock.
In the proposed Meatco model, the unions suggest that the government would assume full responsibility for Meatco NCA through subsidy provisions, while Meatco South and Meatco NCA would operate on business principles and adhere to international best practices.
Meatco South would receive limited government support, contingent on aggressive debt-restructuring measures.
The unions emphasized the importance of weaner production in communal areas and among emerging farmers.
They also called for improving animal health north of the veterinary cordon fence (redline), with responsibility for maintaining the redline outsourced to the Meat Board of Namibia to ensure the sector’s survival and growth.
In response to the farmers’ proposals, parliamentarian Natangue Ithete acknowledged the potential for a market for Namibian beef in Angola and expressed the need for a cooperative approach involving the government, parliament, and farmers.
However, some committee members expressed opposition to the idea of splitting Meatco into two companies, suggesting that it could further disadvantage farmers in the NCAs.
Value addition through local cattle slaughter and meat packaging for exports was also proposed as an alternative approach.
