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Sunday 18 August 2019
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Cons of removing the redline

•    Potential access loss to markets
•    Price depression

 

An agriculture expert said removing the veterinary cordon fence under the current circumstances could have catastrophic consequences that can result in price depressions and Namibia possibly losing access to lucrative global beef markets.
With the debate to remove the VCF gaining momentum by the day, experts also fear that the net result[of removing the VCF] is that exports to markets such as the EU would stop because there would be an over-supply of meat in the domestic market, with resultant price depressions, which means farmers would make less money, including those north of the VCF. The area south of the VCF is classified as NA1, therefore Namibia is able to access high value markets from NA1 because of not only the absence of diseases such as FMD or CBPP from NA1. The EU regularly inspect Namibia’s animal health status to ascertain that all safety measures are enforced.
Given the current circumstances, said Roux, removing the VCF would jeopardise and undermine Namibia’s access to the high value markets. Roux is however of the opinion that exports to markets like the EU would not stop because of an over-supply in the domestic market.
“Namibia is a surplus producer of beef, which means that the country produces more than its local demand and as such is able to or dependent on exports.  Hence, the country would have an over-supply in the domestic market if it cannot export the surplus production,” he said.
Roux added: “Such a scenario could develop if the VCF is removed under the current circumstances.  In this case, Namibia would not be able to guarantee FMD-free productions areas and would thus not being eligible to export to markets like the EU.
Should Namibia, as a surplus producer of beef, lose its export markets it would create a situation of an over-supply in the domestic market (given production remains on the same level).”
Given this scenario, he said, it will eventually result in price depressions that will negatively affect the financial position all cattle producers in the country.  “One can even go further with this scenario in that price depressions would in the long run also negatively affect the country’s production levels. Note, although I have only referred to beef per se, the scenario also includes live weaner exports,” he explained further.
Roux also indicated removing the VCF, which could lead to price depressions that could affect production levels, will result in a situation whereby farmers that have loans with Agribank and commercial banks would struggle to pay back their loans because of reduced income.
To ensure that the VCF is removed without having a negative impact on the entire domestic and international meat market, Roux said: “There are two scenarios at play here:  One is to move the VCF to the border between Namibia and Angola, with very strict veterinary controls; while the other is for Angola to obtain the same veterinary status as Namibia.”
“Given that the latter is highly unlikely in the foreseeable future, the only option currently is to move the VCF to the border between Namibia and Angola, and to introduce very strict veterinary controls.
However, this would require more than just political will between Namibia and Angola; it would also require effective implementation, monitoring and control. This would not apply to the Zambezi region given that it is endemic to contagious diseases given the proximity of the neighbouring countries,” he said.
Asked what the shortcomings are when it comes integrating the northern farmers into the mainstream domestic market without undermining existing market access opportunities, Roux was quick to point to the lack of markets.
“There are many shortcomings in this regard, depending on the point of departure.  From a macro-economic perspective a major shortcoming would be the lack of markets (domestic and export).  However, to develop such markets the production principles and practices on a micro level in those areas need to be upgraded to produce a quality product.  These include the introduction of herd management and veterinary programmes (there are such programmes, albeit on a too small scale),” he said.
Roux concurred with concerns of northern farmers who continue to assert that they are more disadvantaged compared to their counterparts in the south when it comes to livestock farming.
He attributed this to a lack of export markets and value addition, potential of disease outbreaks, quality of production as well as the traditional practices versus commercial principles.
Roux said should the VCF be moved to the border between Namibia and Angola, there would be another cordon area or surveillance zone just south of the “new” VCF as a contingency measure against the possible outbreak of FMD.
“This area or zone would also be under strict veterinary controls as is the case with the existing cordon area or surveillance zone” he said.
Namibia is currently looking to diversify its beef exports to countries in the global South in order to lessen its dependency on the lucrative EU market.
In 2016 Namibia became the first African country whose beef qualified for the lucrative export markets of the United States of America and exports to the USA.




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