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August 25, 2008

Botswana agriculture anxious about effect of SADC Free Trade Area

A few days after the Southern African Development Community (SADC) became a free trade area, fears are mounting that the move may spell doom for Botswana's agricultural industry.

A study is now being commissioned by the Botswana Agricultural Union (BAU) to find ways government can help sustain rural livelihoods in the face of external competition.

BAU chairman, Phillip Fischer, said the elimination of import duties would seriously threaten the beef, dairy, small stock, piggery, poultry, ostrich, grains, and horticulture industries. He said under the SADC Free Trade Area, agricultural products are not eligible for preferential treatment.

Following the announcement at the recent SADC heads of state summit held in Johannesburg, South Africa, the BAU is commissioning a sector-wide study to assess the nature and extent of adverse effects on Botswana's eight commodity value chains (CVCs) that will be caused by the elimination of tariffs. Upon completion, the document will be presented to government, outlining the adverse effects of elimination of the tariffs, as well as how government can assist the local industry to survive the challenges.

"As no adjustment strategies have been developed or implemented in anticipation of the inevitable elimination of tariffs under the SADC Protocol on Trade, it is anticipated that the elimination of tariffs, and in particular, the elimination of Botswana's import permit system under the Control of Goods Act, will adversely of effect all eight of our agricultural commodity value chains," the BAU chief says.

Fischer is sceptical about remedial measures on local industry as proposed in Article 20 of the SADC Free Trade Act. It does not only override the existing SACU infant industry protection law, but the article in question says governments can only safeguard their industries if there is evidence that the affected industry is adjusting to competition.

The proposed study will, among others, assess the immediate adverse economic and social effects of eliminating tariffs on each agricultural sector, as well as the potential commercial viability of each sector without tariffs. For those sectors that have the potential to be competitive without tariffs, the BAU is seeking adjustment strategies to enhance and sustain their competitiveness.

The BAU study will also look at how to assist producers in those inherently uncompetitive sectors so they can dump their businesses and migrate to competitive sectors. For those producers who cannot migrate to competitive sectors, the BAU is seeking social strategies to prop up rural livelihoods.


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