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Government boost for struggling CSC

by Dumisani Nsingo
24 Jul 2016 at 10:44hrs | Views
THE Government will lay the foundation for the revival of the country's struggling meat processor and marketer, Cold Storage Company (CSC) through seeking viable regional markets in a bid to turnaround its waning fortunes.

In an interview with Sunday Business after officiating at a Bubi District Livestock Fair in the Swart area on Thursday, Agriculture, Mechanisation and Irrigation Development Deputy Minister Paddy Zhanda responsible for livestock production said all was set for CSC to resume fully fledged production this year.

"I can safely say we want it to operate within the year end and what we are saying, it's a catalyst for the livestock sector in Matabeleland. It acts as a referee in terms of making sure there is also free play because it's a big brother . . . ," he said.

Deputy Minister Zhanda said owing to its huge capacity it was important for CSC to tap into the regional market with its beef and beef products further stating that exports by the company would go a long way towards reducing the country's current account deficit.

"I think because of its capacity we can also explore some regional markets. If we explore some regional markets it also means improved prices for local farmers . . . there is no question about it, we will look at opportunities in the regional markets because sometimes you might find a glut in the local market, its healthy to have a safety vault where you can export the extra.

"Also from a country's point of view the balance of payment and trade requires that we export. In other countries the issue of exports are driven by Government, not individuals. As Government we must take full interest in making sure we assist as much as possible whoever wants to export to do so because it's necessary to earn foreign currency," he said.

The company's demise started in 2001 after the European Union suspended imports of beef and related products from Zimbabwe following an outbreak of Foot and Mouth Disease.

During its peak CSC also used to buy cattle from farmers and offered highly competitive prices.

However, it stopped doing so about a decade ago due to lack of finance. It also had a number of programmes which benefited both the company and the cattle producers such as the heifer or oxen exchange. Through these schemes the company exchanged heifers and productive cows for slaughter stock.

The company is now surviving mostly on slaughter fees and rentals it receives from leasing its properties.

Its slaughter rate has been on a free fall over the last decade and are down from 50 000 to below 2 000 cattle per month.

Five years ago an Indonesian firm, Ostrindo International cancelled plans to revitalise CSC Bulawayo plant.

The CSC board had granted Ostrindo a 15-year lease to run the Bulawayo abattoir in an effort to revive beef production but the Indonesian company opted out of the deal citing the country's diminishing livestock herd.

Deputy Minister Zhanda said results of a forensic audit carried out at CSC released late last year did not reveal any damning anomaly that might have contributed to the company falling to its knees.

"The forensic audit obviously did point out certain things but I don't think that was the cause of the demise of CSC but in any event an audit will recommend or discover that certain things might not have been followed properly but not that I can quantify that CSC is in this state because of mismanagement or managers stole money or whatever. No! That wasn't the case although obviously there were some minor discrepancies which needed to be addressed," he said.

The comprehensive due-diligence forensic audit to determine the firm's financial information, assets, liabilities and management systems was instituted following a Cabinet recommendation as part of Government's efforts to facilitate the company's turnaround.

Deputy Minister Zhanda said CSC would not enjoy or be provided with any monopoly so as to ensure competitiveness in the meat sector.

"We can't go back to protect CSC, its fair that there is fair competition. Competition brings in efficiencies. It brings in efficiencies in forcing you to look at your management style and composition and when you compete it both favours the consumer and the farmer. Competition is healthy than a monopoly.

"A monopoly will exist not because they are doing the right thing, they exist because they are the only ones and if there is competition, it's healthy. It's like at a township where they are various shops. What does the shop owner do? They cannot just charge literally what they want, they have to carefully sharpen their pencils, be efficient and as a result of that the consumer will then benefit," he said.

Deputy Minister Zhanda said CSC would play a role in the feedlotting of communal farmers' cattle further stating that the company's Cattle Finance Scheme would be revived.

"The Cattle Finance Scheme needs to be financed separately. We are also having an open mind, we are looking at how best we can mobilise resources for that scheme alone because it was a scheme that was operating as a stand-alone. It was also a catalyst for the industrial sector as well because a lot of farmers benefited and we would also want our new farmers to benefit from that scheme," he said.

The Cattle Finance Scheme financed about 600 000 cattle on commercial farms.

Meanwhile, Deputy Minister Zhanda said the Government was implementing livestock management and development initiatives aimed at enhancing the industry prior to the enactment of the Livestock Policy.

"The Livestock Policy is almost through but we cannot wait for that. What we need to do is to develop some templates that go along with the policy. We are good at writing policy documents, to me a policy document is just an objective but to achieve an objective you need an implementation matrix to accompany the policy. We want to develop matrix for every sector within the livestock industry," said Deputy Minister Zhanda.

The country has been operating without a Livestock Policy and only relied on a draft that was crafted in 1995. The draft has over the years been deemed ineffective by players in the livestock industry.

Division of Livestock Production and Development director Mr Bothwell Makodza said the policy will be important in guiding the livestock industry.

"The draft is already there, the policy is important in giving us directions on how to properly manage our livestock. It is just to give us a direction instead of just being all over the show, but it's a guideline which gives us a proper way of livestock keeping and rearing and therefore that policy is being proposed to lead Government into proper ways of livestock keeping," said Mr Makodza.

The policy will also look at problems affecting animal health and production provisions as well as coming up with measures to curb diseases.

The enactment of a Livestock Policy is expected to assist farmers to positively exploit their animals particularly cattle, sheep and goats.

Deputy Minister Zhanda said there was a need for farmers to improve on efficiency so as to realise meaningful returns from their livestock farming business.

"We want to commercialise the mindset of the people to understand that livestock farming is business and the efficiency which I am talking about is that if you have cows which don't calve every year that's not efficient enough. We need cows to calve every year. We also need the right genetics in terms of where you get feed and conversion ratio right as well, where in 15 months you can send your animal for finish or slaughter and it gives you 200 kilogrammes. That's the efficiencies we are talking about but you can't be efficient when you don't have the knowledge and the knowledge comes when you have a commercialised mind and you know the value of your animals," he said.

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Source - Sunday News