Staff Reporter
ANDRÉ Esterhuizen, a livestock producer who chaired a meeting with Meatco management and directors over the past weekend on the non-payment of farmers, has issued new demands to the Meat Corporation, with farmers demanding 50% upfront payment on the date of slaughter/production.
“During the 2022 financial year, specifically between March to August, Meatco failed to pay producers on time as contractually agreed. The delayed payments subsequently continued, specifically in June – October 2023, with outstanding debt to producers reaching N$200 million at a certain point in time. The above is clearly a recurring issue,” Esterhuizen said, questioning the CEO why he has allowed the situation to escalate.
The chairman of the meeting added that should Meatco not pay producers, a guarantee that payment will be made on time should be made to producers.
Further to this, the producers demanded all interest payments outstanding should be settled, and a due date for settlement must be communicated to producers; and that management should commit to inflationary-based increases per year. The producers added that they would charge 3% interest on outstanding payments.
Esterhuizen further stressed that producers need a reliable forward pricing structure for at least six months in advance and that prices should be determined on a collective basis between producers and the Pricing Committee.
“Agreements should be provided for each contract signed going forward, and outstanding creditors/producers’ payments could only be paid through government bailouts with the Development Bank of Namibia (losses are financed with debt). No action is taken to become self-sustainable, and Meatco continues to rely on government bailouts to sustain operations,” Esterhuizen opined.
Touching on the ramifications of the non-payment of farmers, Esterhuizen said that producers are not able to pay workers, suppliers, and other committed costs due to delayed payments, and that auction prices have plummeted due to producers that opt to take their cattle to auctions instead.
“Delayed payments result in slaughter cancellations as producers opt for auctions instead. Certain strategies were implemented to correct the above issues, but they were unsuccessful, and there is no guarantee that this will not happen again,” the producer said.
He further argued that Meatco does not receive enough stock to enable the abattoir to run profitably, as a significant amount of cancellations took place during the year under review. According to the Meatboard statistics, up to 58,000 cattle were slaughtered during the financial year under review. This is despite the fact that there was a significant amount of cancellations during the year.
“Meatco has the capacity to slaughter more than 100,000 cattle per year, provided that producers are paid on time and that prices paid are as agreed,” Esterhuizen said.
Questions sent to Meatco on the status of payments on outstanding debt to farmers went unanswered at the time of publishing.
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