Namibia farm produce battling to penetrate local market

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Lahja Nashuuta

Windhoek - Namibia’s Minister of Agriculture, Water and Forestry, Alpheus !Naruseb, has expressed displeasure over the low market share for the local agricultural produce of just over 40% compared to foreign imports, mostly from South Africa.

The government, through the Ministry of Agriculture, Water and Forestry, established the Agro-Marketing and Trade Agency (AMTA) to coordinate and manage the marketing and trading of agricultural produce in Namibia.

AMTA is further mandated to manage the national Fresh Produce Hubs, the cold storage facilities that store fruits and vegetables and channel them to local and international markets.

The agency buys products from local farmers and trades with relevant markets. Its managing director, Lungameni Lucas, last week informed !Naruseb, during the minister’s tour of the Windhoek Fresh Produce Hub, that the local market share promotion of locally produced fruits and vegetables is currently 44%. The remaining 56% is imported from South Africa.

The market share promotion is a threshold that determines how much all importers of fresh fruit and vegetables need to source locally before they are granted import permits. But the minister was not impressed with the low market share of Namibian grown agricultural produce.  

“Why are we limiting ourselves, why is it only a small percentage sourced from the local farmers? Where is our pride, as a small population with plenty of land, if we cannot feed ourselves?” asked the minister.

As a result, the minister directed AMTA, AgriBusDev and the Namibian Agronomic Board to reconsider the local market share promotion and ensure that it benefits local farmers more.

AMTA is being accused of failing to successfully execute its mandate, especially when it comes to finding the market for local produce as well as allowing a well-established foreign fresh produce supplier to compete with the small-scale farmers.

The Omusati Regional Governor, Erginus Endjala, told The Southern Times this week that horticultural farmers in his region are still finding it difficult to penetrate the local market, currently dominated by South African products.

About 400 small farmers are involved in irrigation activities along the Olushandja Dam, near Ruacana, still do not have a formal market to sell their produce, six years after AMTA was established.

“The idea behind the establishment of AMTA, a state agency, was to perform the marketing and trading functions for local horticulture producers. That was a brilliant idea. However, the institution has been a total failure.  It’s unfortunate that after six years of its existence, our small-scale farmers are producing to decay as they don’t have a market to sell their goods,” he said.

Unless, the government goes back to the drawing board and comes up with a marketing and trading system that would benefit the local farmers, the long-term vision of eradicating poverty would never be attained, the governor emphasised.

Endjala described the current system used by AMTA to source produce and trade them on the market as a ‘nightmare’ for the farmers as most of their goods are being auctioned at very low prices.

“Our farmers are supposed to put justifiable prices on their produce. However, this is not happening, AMTA decides the price for them, which is unfair,” he said.

Other areas of concern are the fact that local farmers have to compete with well-established businesses such as Fysal Fresh Produce, a South Africa horticultural supplier and retailer.

“I was so disappointed to learn that Fysal Fresh Produce, an established South Africa business empire, is also operating as a trading agency at AMTA hubs. The institution was established to help small-scale farmers to penetrate the market that has been dominated by foreigners since independence,” Endjala fumed.

To avoid deterioration of perishable produce, Endjala revealed that the region has gone a step further to establish the tomato processing plant in order to absorb and add value to tomatoes, which are the main produce in the region.

He called for the enactment of a law that would prohibit institutions from importing goods. The law should also compel companies catering for schools and hospitals to only source home-grown produce.

Endjala further said there is a need for a regulation to compel the multi-national retailers to have local produce on their shelves. He also expressed his disappointment with the absence of the Namibia Competition Commission as well as the Consumer Protection Commission in the issues of unfair competition in the agricultural sector.

Paulus Amutenya, the chairperson of the Olushandja Farmers Association, shared Endjala’s sentiment and wants the provision to include all foodstuff supplied to the government.  He further complained that because of the lack of a market for their produce, many farmers have been forced to cut back on production to only cater for targeted clients mostly family friends for events such as weddings and street vendors.

 

AMTA progress

AMTA MD, Lucas, reported that progress has been made in the past four years and that the trade of fresh produce sourced from local farmers is picking up.

During the 2017/2018 financial year, trade volume was 3,671 metric tons of fresh produce worth over R30 million that was sourced from 477 local farmers, while R79 million in levies and fees was collected from imports (5%) and (1.4%) from local sales.

Lucas said the agricultural produce was sourced from all seven government agricultural green scheme projects as well as small-scale farmers along the Olushandja Dam.

While Lucas concurred with Minister !Naruseb’s sentiment that there is potential to source 100% locally grown agricultural produce, he, however, said such target can only be achieved if more resources are made available.

He said the agency aims to establish a R30-million revolving fund to successfully implement the Cabinet directive on fresh produce procurement, to ensure market access for farmers, and also achieve financial sustainability.

He said R40 million levy allocation to AMTA and R9 million subsidy from the agriculture ministry is insufficient to sustain operations.

During the 2018/2019 financial year, the government has allocated R78 million of the national budget to AMTA. However, Lucas points out that the organisation is in a deficit of R29 million.

Meanwhile, the agency said it is ready to buy more grain mostly maize and mahangu (millet) from local farmers this year.

AMTA also oversees the strategic food reserves infrastructure, the silos, to ensure national food security.

With the available storage space of 12,000 metric tons (MT) of national food storage, AMTA has set aside about R60 million to procure grain during the 2018/2019 financial year.

The national total storage capacity currently stands at 67,000 MT, but currently, the silos hold 22,900 MT of that capacity.

Silos at Katima Mulilo (Zambezi region) contains 7,400 MT, 3,000 in Tsandi silos, 4,500 in Okongo (Ohangwena region), 4,000 MT in Omuthiya silos (Oshikoto) and 4,000 MT in Rundu silos in Kavango East.

AMTA also plans to introduce a revolving fund to the tune of R85.3 million for the purchasing grain from farmers, and ensure three cycle grain changes annually to ensure food security and financial sustainability.

 

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