2005 Speeches

Remarks Presented by Ambassador Katherine H. Canavan Embassy of the United States of America to the BCPA Cattle Production and Marketing Policy Conference

November 14th, 2005

November 14th, 2005 Good morning ladies and gentlemen. It is with great pleasure that I’m here this morning to deliver the keynote address to the Botswana Cattle Producers Association Cattle Production and Marketing Policy Conference – now that’s a mouthful. It is extremely gratifying to see the private sector making its voice heard and driving the process as government evaluates options for reform. The role of the private sector is essential to the success of all economic policies, and only by having the right package of investment-attractive policies can a country succeed in bringing in investors, growing the economy, and reducing poverty. Today I will speak very briefly about the value of market-oriented reform as a means of addressing the pressing challenges facing the cattle industry.

As we all know, the cattle industry plays an enormously important role in Botswana’s society and culture and has a direct impact on the livelihoods of many Batswana. It is estimated that 20-25 percent of households in Botswana are involved in cattle rearing either as owners or employees. Income generation from cattle remains essential to rural communities, as livestock farming is the principal income source for a majority of rural households. Yet the agricultural industry as a whole has experienced a sustained decline and today accounts for a mere 2.4 percent of gross domestic product, roughly two-thirds of which is related to cattle production.

The cattle industry is faced with declining revenues at the Botswana Meat Commission and according to at least some estimates a shrinking of the national herd. The industry, which is owned and operated primarily by citizens of Botswana, has also experienced stagnant growth over the last 30 years and a drop in exports in real terms. These problems have produced a near crisis in the industry that necessitates action.

That action must be focused on a common goal: the revitalization of the cattle industry to the benefit of all stakeholders. This means turning the cattle and beef sector into an efficient contributor to this country’s economic diversification and growth and into an internationally competitive industry. I would like to make the case this morning that the liberalization of the market and the introduction of competitive forces would be the most effective means of accomplishing this goal.

As I said to the American Business Council just last week, the approach each country takes to reform its economic, institutional and regulatory frameworks is unique. The case for liberalization of industries, the breaking down of administrative barriers, and the opening of space for the private sector to operate varies widely between countries. But there is near universal acceptance that reforms that foster competition will improve the quality of services and products provided to your citizens and will strengthen the position of your local companies.

Considering the current challenges facing the cattle industry and its importance to the livelihoods of such a large number of Batswana, it is difficult to imagine an industry that would benefit more from fundamental reforms that encourage private industry and investment. For example, the impact of improved prices that could result from a variety of reform approaches such as breaking down export barriers would have an immediate effect on reducing rural poverty. Such reforms would also encourage best practices in farming techniques and management as producers adjust to the competitive environment and seek out comparative advantages. New investments would bring new technologies.

While reforms can sometimes be painful in the short-term for small special interests, the benefits are reaped by the wider population. Obviously, reform must be coupled with education to ensure that these benefits accrue to all stakeholders – owners, producers, consumers and the government.

I was very happy to hear that a range of studies investigating reforms in the cattle industry are already ongoing and nearing completion. I hope these studies, which are looking at a variety of issues, including the restructuring of the BMC and potential markets for processed meat products, will be pulled together into a coordinated strategy to revive the industry. Only then can Botswana create the package of policies necessary to attract investment and reduce poverty.

I hope that as you deliberate on various reform proposals and suggestions today that you consider what I have said about the benefits of open markets. I hope you keep the wider population’s interests in mind. And I hope your deliberations are productive.

Again, it has been a pleasure joining you this morning and I promise to keep a close eye on the reform process for the cattle industry. As I said, success in revitalizing the industry is in all of our interests.

Thank you.

Pula!