Small Stock Industry to Rethink Levy

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By Wezi Tjaronda

WINDHOEK

The proposed levy for exporting small stock has been referred back to producers and the Abattoir Association of Namibia for fresh proposals.

Three permanent secretaries, of Agriculture, Water and Forestry; Trade and Industry; and Finance, and producers and export abattoirs last Friday met to discuss the Small Stock Marketing Scheme.

New Era understands that the industry, which comprises the producers and Abattoir Association of Namibia, will have to make fresh proposals on the marketing of small stock to the Government.

The meeting was the first this year after Cabinet referred back the proposal that was made by an independent study of the scheme last year. The study proposed a levy of N$19 per sheep destined for exports.

Friday’s Namibia Agricultural Union newsletter said due to the differences between the producer representatives and the abattoir association with regard to the scheme and the report of PricewaterhouseCoopers, the parties were requested to meet in order to reach consensus and to present Government with a joint viewpoint and recommendation.

The NAU said the aim of the meeting was to try and convince Government to take a decision regarding the proposal made on November 30, 2007.

“The urgency to reach a decision was brought again under the attention of the permanent secretaries by the delegates of the NAU. The urgency is based on the coming pressing marketing season which will start soon and which caused chaos in the marketing of small stock last year,” said the newsletter.

The current small stock marketing measures of 6:1 could have been replaced by a fixed levy per sheep if Cabinet had agreed to the proposal.

Last year, the Abattoir Association of Namibia rejected the proposed N$19 per head levy, saying it will kill their businesses and said it would take up the matter with authorities at the highest level. The export levy was based on the additional direct costs, which Namibian abattoirs have in comparison with South African abattoirs, especially those in the Northern Cape, as well as Namibian producers exporting and slaughtering sheep in South Africa. There were also plans to plough back the export levy to producers who slaughter locally as an incentive for local slaughtering and to stimulate local value addition.

The new proposal was supposed to be implemented for four years, during which time the ministry would make extra effort to obtain bone-in-meat exports to the European Union market.

The proceeds of the EU market would make local sheep abattoirs more competitive and offer such surpluses to local producers. The Government in 2003 decided to exempt the export of live sheep from a 15 percent export levy for four years, which ended on November 1 2007, on condition that all sheep are slaughtered locally.

Since the implementation of the scheme in 2004, the slaughter export ratio of 1:1 changed to 2:1 in March 2005 and then to 6:1 in September 2006.
This, say experts, saw an increase in local slaughtering of sheep leaving 17 percent for export.

The PricewaterhouseCoopers study said the gap in prices paid by local abattoirs against those paid by South African abattoirs widened to the detriment of local producers.

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