Ostrich Trust in a Bind

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By Wezi Tjaronda WINDHOEK The Karas Communal Ostrich Farmer’s Trust (KCOFT), a trust that was instrumental in setting up the ostrich production infrastructure in the Karas region, says they have been pushed out of the industry. After acquiring two separate loan facilities, which could have helped the Karas Ostrich Communal Farmer’s Trust become an independent entity, the trust alleges that this ended up benefiting their commercial farming counterparts. A founder member of the trust who spoke on condition of anonymity said this week that what has happened in the industry was a deliberate move to “usurp the funds obtained by the communal farmers”. It started with the KCOFT obtaining a government guaranteed loan amounting to N$14.5 million from Agribank in 1997. The communal farmers used the N$14.5 million to obtain shareholding in Ostrich Production Namibia, today known as Karas Abattoir and Tannery (KAT). The other player, the Domestic Ostrich Production Mariental, which has in the meantime changed its name to Hardap Ostriches, was not part of the initial deal the time the loan was obtained, according to the founder member. He alleged that DOPM, which was given shares, became the dominant force, while the communal farmers, the co-owners of the company became the underdogs. “They say they were brought in to motivate them to bring their birds for slaughter at the abattoir and not to sell them elsewhere.” KCOFT and the Government Institutions Pension Fund (GIPF) have shareholding in the infrastructure, which included an abattoir, a tannery, a by-product plant, hatchery and an office and administration block. Later on, however, he said, the trust was told that it had no shareholding anymore, and in the process “the trust was killed”. This forced the farmers to form six communal groups and set up infrastructure after which they asked for production capital in the form of medicine, fodder, and chicks and transport, expenses that were paid directly to the suppliers. The founder member said that although this happened, the communal farmers were just raising the chicks for the DOPM. Problems started after the communal farmers sold the first birds, as they could not get the money. “DOPM did not want to pay. They said we owed them money for fodder and chicks,” he said. After the government commissioned an investigation into the industry, another government guaranteed loan was disbursed to the communal farmers and the commercial farmers. According to the Deputy Minister of Agriculture, Water and Forestry Paul Smit, the communal farmers got N$14 million, while N$7 million was given to the commercial farmers in 2002. But according to the founder member, the money for the communal farmers was paid directly for fodder and chicks, which went to commercial farmers. “The design was that all the money should go to commercial farmers,” he alleged. Smit however said there has been a blame culture in the industry, which will not make the industry go forward. He said the investigation found that the farmers were making a loss of N$500 per bird, after which proposals were made to restructure the industry through down scaling, stabilising and then growing the industry. It included a proposal that the abattoir be used dually for ostriches as well as sheep. The N$21-million loan was given on condition that the industry would be evaluated on a yearly basis for three years, during which time the industry needed to bring the cost of fodder down and do some marketing, said Smit. But at the end of the 2005 cycle, the deputy minister said, it was discovered that there was still trouble in the sense that even if subsidies of N$300 per bird were still being paid, money was still being lost and the loan would not be paid back. Agribank says the industry is in turmoil, and that none of the operations are sustainable, statements that the deputy minister agrees with. The bank also said the infrastructure was not optimally utilised because for instance instead of slaughtering 90 000 ostriches per year, it only slaughters between 20 000 and 30 000 birds per year. Meanwhile, suggestions to bring in a private investor into the industry have been met with a lack of interest, said Smit. “If a private investor comes in, we would continue to assist the communal farmers,” he added. But as is the case, Smit says, the government will not support the industry anymore, if it continues to make losses. The government can give incentives but it is up to the businesses to make money to run the country. And if they are unsuccessful, and we continue to pump in money, where will the money come from,” he wondered. The ministry has now put up proposals which it will take to cabinet before making a final decision on whether to continue supporting the industry or not. “I believe we have come to a point when we must call it a day,” Smit added. In addition, Agribank said the industry lacks experience and overall competitiveness because of the high costs of fodder. The only way the industry can be sustainable, according to Smit, is through irrigation schemes.

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