Francistown Business Forum Baitshepi Babusi-Hill 4/17/2017 1:18 PM “Models & Strategies of Investing in Agriculture within the greater Francistown: Possibilities of contract farming by private sector with the local community for technical and market support” Francistown Business Forum August 2014 Baitshepi Babusi-Hill THE AGRICULTURAL HUB © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Overview of Agric Sector in Botswana Main stay of livelihoods. Food, employment and income. Sector is dualistic, consisting of both a) traditional farmers and b) commercial farmers, (main differences here are land tenure, use of technology, and marketing of agricultural outputs)

Botswana’s annual Food Security Situation – Metric Tonnes (2012) Product National Demand Domestic Production % Imports Sorghum/millet 96 000 51 647 54 % 44 353 Maize 221 000 21 560 10 % 199 440 Fruits and Vegetables 75 000 36 138 48 % 95 203 Pork 972 455 47 % 517 Poultry 64 053 63 412 99 % 4 576 Honey 31 14 45 % 17 Mutton and shevron 997 770 77 % 22 Milk 63 million litres 3 6 % 60 million

Challenges & Opportunities in Agriculture

1. Processing & Value Addition Challenges Opportunities Formation of Agro Processing Plants for both horticulture and livestock products Tanneries for both exotic and non exotic leather Manufacture of leather products Collection of Hides and skins Low levels of agro processing/value addition plants to agricultural produce i.e. horticulture meat products Tannery for hides & skins Hides production at over 300 000 annually. Either exported raw or discarded.

2. Zambezi Integrated Agro-commercial Project Challenges Cost of Water extraction Feasibility Study Environmental Impact Assessment Agricultural Productivity Business cluster model Opportunities 495 million cubic metres/year Water extracted from Zambezi River 110 km Pipeline construction on PPP, BOT etc 35,000ha Agro-Infrastructure development of selected Crops

3. Dairy Challenges Opportunities Increase in No of dairy projects. National demand is 63 million Litres and only met by 6% Inadequate dairy breeds Inadequate knowledge High cost of feed Unavailable Land for dairy farming. Opportunities Increase in No of dairy projects. Use of Artificial Insemination and modern technology of breeding i.e. sexed semen. Technology transfer Production of feed from arable operations Setting aside suitable land for dairy production.

4. Beef Production Under utilized abattoirs Challenges Under utilized abattoirs Use of Communal farms (Meraka) vs. Ranches Processing of By- products Diseases out breaks, e.g FMD Opportunities Cattle ranching. Existence of EU listed abattoirs. Well developed Livestock Identification and trace back system (LITS) Range fed beef. Blood & carcass meal for feeding poultry. Utilization of other cattle by- products like hooves, horns etc….

5. Other Opportunities in Agriculture Supply and manufacture of farm machinery and implements Farm inputs and fertilizer etc. Ostrich Farming Remains unexploited High wild ostrich population a sign of good potential (77 000) Existence of an EU listed Multi Species export abattoir. Existence of ostrich multiplication farm to supply farmers. Apiculture (bee keeping) Projects National demand is 40 tons. The highest ever produced was 14.2 tons in 2010/11. Utilization of by-products. Increase in production. Floriculture –Production of cut flowers

Other Opportunities ……cont’d Investment arrangement Leasing out unutilized farms from land owners Leasing out municipal abattoirs Joint ventures Sole or Individual investment Foreign Direct Investment (FDI) Provision of Agricultural Insurance No Substantive Agricultural insurance Creation of Conducive environment Credit facilities to Citizens at low interest rates. Other undeveloped livestock with great potential Donkey meat (200,000 - 300,000 donkeys) Sheep and Goats (200,000 sheep & 800,000 goats)

What is Contract farming Involves agricultural production being carried out on the basis of an agreement between the buyer and farm producers. Linking small-scale producers and buyers through business model innovation. Agricultural production carried out according to a prior agreement in which the farmer commits to producing a given product for a pre determined buyer.

Benefits of contract farming Provides a “peace of mind” to the farmers. It offers the producer 100% guarantee on a minimum price for the product. In instances where buying prices drop during harvest season, the farmer’s income is secured. It gives the farmer an opportunity to budget and plan their farming operations well ahead. On delivery the farmer is paid promptly (i.e. the contracted price within 7 days). The producer capitalizes on any price rises. Improve on data collection & intelligence.

Contract farming Opportunities 1. Sale of Cereals to BAMB Under this scheme BAMB identifies a market for a particular crop and contracts farmers to produce and supply BAMB with crops such as Sorghum, Maize, Cowpeas or Beans at agreed prices and quantities prior to planting. This helps to minimize farmers’ exposure to price risks due price fluctuations dictated by market conditions, hence empower local farmers to commercialize their arable farming operations. This facility is open to any farmer who produces locally provided he can produce 10 Mt or more per crop. 2. Sale of Cereals to Seed Multiplication Unit (SMU)

Contract farming …….contd 3. Poultry (Challenges) Famers shy away due to conditions of contract. Inconsistency of supply. Quality not met. Private business not willing to buy locally. Letter of intent not binding. Opportunities Farmers in contracts with private businesses like Richmark, Star, Bobby’s for market access. Contract with feed suppliers like Feed Botswana.

Contract farming …….contd 4.Horticulture (Challenges) Saying No contracts (shy away) Inconsistency in supply Low quality of produce Low volumes Concentration on one value chain Chain stores import. Opportunities Policy support & from government Niche products (cauliflower, brocolli, lettuce, herbs) Export opportunities Specialization Processing (Mccain) Partnership trader Cold storage facilities

What then for Francistown… The presence of MoA in Francistown Agricultural Hub facilitation on Investment The presence of Key stakeholders as the city grows A conducive environment provided by government being availed Seize the opportunity Align yourselves to the opportunities to assist government in creating the environment for the investor to come to the city e.g. Richmark will come if there is a call for that. 4. Location of the city –major transport corridor Access to borders, Airport, foreign markets Population and market access

Day & Night

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