The news from Namibia was simple:
Ongwediva — President Hifikepunye Pohamba on Monday opened the multi-million dollar Fresh Produce Business Hub at Ongwediva where all local farmers will now be able to market their produce.
Situated just a few meters from the Ongwediva Road Block, the Ongwediva Fresh Produce Business Hub will provide cold storage and ripening and packaging facilities for local horticultural producers.
Agro processing, laboratory and research facilities, a retail center, an open market, and a fuel station for the hub’s vehicle fleet will also be added in the next phases of the development of the hub.
Ongwediva Fresh Hub
Photos by Joseph Nekaya/State House
President Pohamba, who inaugurated the fresh produce center, said the development is one of two facilities that were recently completed as part of the government’s intervention to provide a market for food in the country.
The other fresh produce hub opened at Rundu last week. According to the Deputy Director of Planning in the Ministry of Agriculture, Water and Forestry, the value chain in Namibia’s horticultural production has lagged behind over the years. As a result the country had to import most of its food requirements from neighboring South Africa.
Although the market share of locally produced fruits and vegetables has slightly increased in 2012, compared to the previous three years, the percentage of imported food remains very high.
Last year alone, Namibia imported about N$287.4 million worth of fruit and vegetables. This figure represents 69.4 percent of the country’s total consumption of fruit and vegetables. The country only produces about 30.6 percent, which in total is worth about N$126.8 million. From 2009 to 2011 Namibia could only produce between 25 percent and 28 percent of its own fruit and vegetable requirements.
In addition, the country also has to import 50 percent or 120 tons of its cereal requirements, which include wheat and maize mostly from South Africa and Zambia. At times, the country also imports cereal from Canada. According to the president, the government has invested over N$200 million to construct the two facilities, and additional investments will be made to construct a similar facility in Windhoek.
“We have a country that was made to be a recipient or a dumping place for food from other countries. It was done deliberately to make sure that Namibia does not produce its own food. We have the land, we have the water, and we have the people to cultivate the land. Gone are the days when our farmers had to struggle to find the cooling facilities to store their produce,’ said Pohamba.
The president maintains that there is no reason why the country should continue to import basic food that can and should be produced at home at places such as Etunda, and other agricultural projects in Omusati, Oshikoto, Ohangwena and Kunene regions.
We asked Pundit Investigator and Special Projects Editor, Mira Slott, to speak with Namibian government officials to find out more…
Ministry of Agriculture, Water & Forestry
Marketing and Planning
Ministry of Agriculture, Water & Forestry
Director – Engineering and Extension Services
Ministry of Agriculture, Water & Forestry
Q: We are intrigued to learn about the opening of fresh produce business hubs in Namibia as part of the government’s plan to provide a market for food in the country. Thank you for your collaborative effort to share further insight and perspective.
What led to the development of these fresh produce business hubs at Ongwediva and Rundu, with plans underway to construct another facility in Windhoek? How important is the need for these facilities? Could you provide some historical background and context as it relates to food security and reducing dependence on imports?
A: The development of the Fresh Produce Business Hubs has its roots in the Vision 2030, the National Development Plans (NDPs) and the Strategic Plans of the Ministry of Agriculture, Water and Forestry (MAWF). It is part of the Government’s programs aimed at contributing to improved national food security and nutrition through the development of the agriculture value chain at the national level, that is, agricultural production, processing, marketing and distribution.
The facilities are very important in that they will present a platform for farmers to market their produce on one hand as a common place for retailers in the country to source their produce for distribution in the domestic and international markets. Furthermore, not only will the hubs create business and employment opportunities for the local communities, but they will also potentially contribute to skills development and transfer to Namibians that will be employed in the processing and value-addition facilities.
With regard to the historical context, it is now common knowledge that the absence of these facilities has resulted in a substantial tonnage of Namibian-originating horticultural fresh produce being marketed through third countries. As a result, Namibian consumers of these products suffer most, as they have to pay the transportation and foreign handling charges, which are passed on to them. It is therefore logically expected that the new developments should mitigate such costs, while improving Namibia’s trade balance for these commodities.
Q: What would you consider the biggest challenges? What are the biggest opportunities?
A: The biggest challenge would be for the operational system to deliver fair and equitable benefits to all stakeholders in the fresh produce value chain. This challenge is, however, not insurmountable and can be achieved through transparency in the system and through a building of trust amongst all stakeholders. In other words, farmers, wholesalers and distributors should share benefits from the system in an equitable way, while consumers should be assured of the best quality of the produce and food safety at all times.
The biggest opportunity created through these facilities is for the Namibian horticultural producers to take maximum advantage of the domestic market on one hand, as well as the international markets in cases of surplus production.
Q: What are the growing conditions and current availability of produce crops? Are the current resources for farmers sufficient for successful harvests? What are the volumes and varieties of fresh fruits and vegetables that can be produced? Could you provide some numerical data for perspective?
A: Crop production in Namibia takes place under rain-fed and irrigation conditions. Small scale mahangu and maize production predominantly takes place under rain-fed conditions, while horticultural production and large scale grain production is predominantly conducted under irrigation. Crop irrigation mainly takes place along Namibia’s perennial rivers and canals along its northern and southern borders, as well as near the large dams. There is vast potential to further expand the agricultural land under irrigation.
More specific information:
• Total volumes of current horticultural production (i.e. Nov 2011 to October 2012 ) — 19,708.92 tons
• Types of horticultural produce that are currently produced — Potatoes, onions, oranges, tomatoes, carrots, cabbage, lettuce, pepper, cucumber, grapes, naartjies, mango, lemons, bananas, avocado, carrots, grapes, dates, melon, squash, etc.
• Total area of land currently under irrigation production — approximately 10,000 hectares
• Total potential area of land that is earmarked for development into irrigation production under Vision 2030 — 27,000 hectares
Q: Are farmers set up with the necessary training and resources for production? Will the government be providing assistance in training, for example? Where are the greatest areas for growth?
A: The Ministry of Agriculture, Water and Forestry is already training farmers on Good Agricultural Practices (GAP) for the production of horticultural fresh produce. These international best practices are aimed at ensuring that fresh produce farmers produce safe food to consumers, by using only approved pest control products at the allowed levels, handling produce hygienically, therefore avoiding contamination, and using production practices that are safe for workers and the environment. This training is aimed primarily at small scale farmers both in green schemes and also in private/communal farms. It also integrates commercial fresh produce farmers in and out of green-scheme farms, who work in an integrated way with smallholder farmers. So far, the program has trained over 200 farmers in the northern and southern parts of the country.
Small scale farmers operating on the Government Green Scheme projects benefit from the serviced plots. The various Green Scheme models make provision for the joint procurement and marketing of production inputs and produce respectively, through the service providers.
Q: How will the logistics work? What are some of the logistical obstacles that need to be overcome and what solutions are underway? For instance, President Pohamba noted other infrastructure and capital projects over the years, such as construction of feeder roads in different parts of the country to boost economic growth and facilitate trade and commerce.
A: In essence, their Ministry has procured cold trucks which shall be utilized in the collection and distribution of horticultural produce from farmers to the hubs and from the hubs to retailers at cost. The perishable nature of fresh produce requires that they are transported at specified and scheduled times in order to preserve their freshness and quality. The road network is good in Namibia, and where necessary the Ministry of Work and Transport will be consulted for road infrastructure development.
Opening of Ongwediva Fresh Hub. Left to Right with Red Boutonnières is Minister of Agriculture John Mutorwa and Clemens Kashuupulwa, Oshana Governor and
Deputy Minister of Agriculture Lempy Lucas
Photos by Joseph Nekaya/State House
Q: Could you discuss the evolution and scope of the government’s mission? At the Ongwediva inauguration on March 4, President Pohamba gave an inspiring speech, emphasizing the government’s focus on socio-economic development and the improvement of people’s living conditions, to combat unemployment and poverty. How will these produce hubs work toward meeting these goals?
A: Massive job opportunities will be generated both directly and indirectly. Poverty levels would decline as local people would generate incomes from the selling of produce to the hubs.
Q: Could you talk more about the government’s substantial investment of resources amounting to more than N$200 million ($21.60 million US); what investments are planned going forward and in what areas?
A: The Fresh Produce Business Hubs (FPBHs) bring in one place business activities in the fresh produce value chains, with the bulk cold storage and marketing facilities at the core of such businesses. They consist of bulk cold storage and marketing facilities, serviced land for agro-processing activities, quality assurance lab facilities, retail centers, open/community market facilities for hawkers, fuel stations and truck ports, and other logistical equipment and infrastructure. The FPBH properties will be managed by the Agricultural Marketing and Trade Agency (AMTA), an agency that will be responsible for the promotion of the marketing, processing and value addition of Namibia’s agricultural produce.
Opening of Rundu Fresh Hub, The man in the middle is
Minister of Agriculture John Mutorwa
and the man at right is Permanent Secretary Joseph Iita
Photos by Joseph Nekaya/State House
Q: How will the process work exactly? Could you elaborate on how the different segments in this complex supply chain will align and flow to produce and market safe, quality fresh produce?
A: The bulk cold storage and marketing facilities will be operated by wholesalers and agents and will create a platform for horticultural producers to market their produce on one hand and for retailers operating in the country to source their fresh produce for distribution into the domestic as well as export markets, on the other.
The serviced land for agro-processing activities is sub-divided into plots on which agro-processing activities and value addition to fresh produce shall be conducted. Such agro-processing activities will include, but not be limited to the drying, canning and bottling of fresh produce. These businesses will complement the fresh produce value chain by minimizing post-harvest losses. The plots for agro-processing businesses will also be leased or sold to interested private sector investors by AMTA.
The laboratories will be used to conduct tests on samples with the view to provide quality and food safety assurance services for fresh produce traded through the FPBH facilities.
The retail centers will be leased out to retailers who will sell production inputs to farmers such as quality seed, fertilizer, agrochemicals, protective apparel and farm equipment. In addition, the space in these centers would also provide for banking services, to afford traders access to cash for cash transactions at the hub. This will ensure that the FPBH are truly a one-stop-shop for all fresh produce farmer and trader needs.
The open/community markets, which will be demarcated into small marketing spaces, will create business opportunities for hawkers from the immediate communities. They too will be availed to interested persons by AMTA. The fuel stations and truck ports will to serve the trucks transporting the fresh produce to and from the hubs with fuel, parking and hygiene services.
The logistical machinery and equipment and the Information and Communiction Technology (ICT) system are expected to contribute to the smooth operations at the hubs. So far, AMTA has two cold trucks for collecting fresh produce from production points and collection centers. The FPBHs are fully equipped with floor space, vehicles, cold rooms and ripening rooms. An ICT system is installed to enable swift communication between producers on one hand and wholesalers and agents on the other.
Opening of Ongwediva Fresh Hub
Photos by Joseph Nekaya/State House
Q: Would you consider these developments transformative and if so, in what ways?
A: Yes. The absence of bulk cold storage and marketing facilities, particularly for horticultural produce constituted a missing link in the domestic horticultural value chain. As a result, a significant part of the horticultural produce harvested at some Green Scheme projects has traditionally been exported to third countries where it is processed and value added before it is distributed even back into the Namibian market at higher marked-up prices. Horticultural produce is therefore more expensive to Namibian consumers and in some instances limits access to these nutritious products to a few people who can afford them.
Q: What are the key strategies going forward? Is there any news in the pipeline that readers should be watching for?
A: AMTA will soon be operational, which will culminate in the operation of the facilities. Interested entrepreneursshould be on the lookout for adverts on business opportunities in the FPBHs.
We have always been fascinated by Namibia. As a boy, we had a globe and what was then called South-West Africa had an enclave in the midst of it called Walvis Bay. South-West Africa had been a German Colony and then after Germany lost World War I, it became a League of Nations mandate with South Africa administrating the mandate.
The enclave that fascinated us as a boy was occupied by the United Kingdom until it allowed the Cape Colony to annex it. Even when South-West Africa became independent as Namibia in 1990, the Walvis Bay enclave remained South African until 1994.
When we were cutting our eye teeth in the produce industry back on the Hunts Point Market, we were excited when we received a shipment of Namibian grapes. Now we honestly don’t know if they were even enterable into the US, but at the time they got through and they were beautiful and delicious and came in earlier than the Chilean grapes.
The recollection is that we had a lot of trouble selling these high quality grapes to the chains because they came in an odd-size package and retailers didn’t want to reprogram their computers just for Namibia, so we had to job them out on the walk.
So it was a special treat when we launched the Pundit and received from Marc De Naeyer, Managing Partner at TROFI in the Netherlands letting us know that our readership had extended to Namibia:
Did you realize that the Pundit has some very loyal readers (Achilles De Naeyer and Andre Vermaak) in the desert of Namibia?
So we certainly wish the people of Namibia well and that their country should prosper.
It may well be useful to have these new hubs and modern refrigerated facilities, and processing operations may well create opportunities for farmers, and the existence of easy ways to buy produce may help local retailers and restaurants to thrive.
So public investment in such hubs can be justified on the same basis that led the City of New York to build the Hunts Point Market and may yet lead the city to invest in a new facility.
We can also accept that during the colonial period — and we can include the South African control as part of that period– there was no particular effort made to help develop Namibia’s food production capabilities, indeed maybe even a conscious effort to suppress such potential. Still the population of Namibia is only about 2.3 million, and as late as 1950 it was less than half a million.
By contrast the population of Manhattan back in 1910 was about 2.3 million. In fact, although density in Manhattan has been reduced by new zoning laws and the move to the suburbs, even today, a typical weekday sees Manhattan’s population, including commuters and tourists, balloon to about four million.
This means that seeking out self-sufficiency is likely to be a very expensive way to go. Modern farming, packing and marketing requires economies of scale, and in many cases the most effective thing to do will be to pool crops, so Namibian produce may wind up with South African consolidators and, conversely, Namibian retailers and restaurants will wind up finding it more economical to buy from larger South African suppliers who can be part of a 52-week supply chain.
Oddly, Namibia has had one incredible produce success, and it has to do not with the local market but selling table grapes around the world. It turns out that Namibia has a substantial competitive advantage in producing very early counter-seasonal grapes.
The growth of this field was nicely profiled by Jürgen Hoffmann in a piece for the South African Institute of International Affairs that featured quotes from none other than the same Achilles De Naeyer we mentioned above. The piece is titled, Greening the Namibian Desert: An African Success Story:
A determined entrepreneur turns an arid landscape into a burgeoning vineyard.
Sun-scorched and starved of rain, Namibia’s endless desert and scrubland is an unforgiving place for a determined farmer with a dream. Only 2% of the country receives enough rain to grow crops. Irrigation from rivers is possible only along a few border rivers in the far north and south and borehole irrigation is prohibitively expensive.
Yet Dusan Vasiljevic, a lone entrepreneur with a feel for horticulture and global markets, observed that Namibia’s mild coastal climate was perfect for growing table grapes for Europe at times of the year when they are most vulnerable to frost elsewhere in the world. Since first connecting those dots in 1988, Vasiljevic — and those who have followed in his footprints — built a new agricultural industry from scratch on land that received less than 50mm of rainfall a year.
The Namibian table grape industry owes a lot to one man for single-handedly, against all odds, starting and building the production and export of table grapes in this arid country,’ said Achilles de Naeyer, chairperson of the Namibian Orange River Table Grape Growers Association….
Depending on weather, Namibia now exports anywhere from 3.5 to 5 million cartons of world-class export-quality table grapes. This product meets the strict quality and safety standards of the British supermarket chains and many other buyers.
In Namibia, there is a law requiring retailers to procure 27.5% of their fruits, vegetables and certain other products from Namibian sources. Although agriculture — excluding fishing — is believed to account for less than 6% of the gross domestic product of the country — the country is very rich in diamonds, uranium and zinc — a very high percentage of the population, 16.3%, works in agriculture. About 2/3rds of the rural population depends on subsistence agriculture.
There is a tremendous temptation in development to support existing structures, but requirements to purchase locally are ipso facto proof that the local product is overpriced or inferior in quality. The temptation to be protectionist is strong, and all countries, including the United States, sometimes fall victim to it as the US just did in raising the reference price on Mexican tomatoes.
This attitude may buy votes and even short term prosperity but, long term, prosperity is much more likely to be obtained by engaging with the world trade system and insisting that local producers survive by becoming world class producers.
Mostly what Namibia needs is to deregulate the economy so that jobs can boom in both agriculture and non-agricultural fields. The Namibian Employers’ Federation came out with a report about 18 months ago titled Restrictive Labour Legislation In Namibia And Its Negative Effect On Job Creation:
When employing a person, there is an inherent risk to the employer. How should and can that risk be reduced to encourage employment creation.
Direct and indirect cost factors increase the risk factor of employment, and discourage more employment.
Barriers to firing become barriers to hiring.
The rights of the employer to maintain the most suited workforce is being eroded.
Today a worker can lodge a complaint without cost or risk to himself. Thus the, as yet unanswered, question is the current dispute resolution system unfairly biased in favour of the worker?
Is it right for an employer to have to spend up to 25% of his productive time on labor issues, instead of on running his business?
Does the current labor regulation system discourage investors, or at the least reduce the number of jobs they create?
The world has just come through a serious global economic down- turn. It is not a case of IF another will occur, but WHEN. A flexible labor market will assist any country to weather the next such storm.
What is needed is SMARTER regulation, not MORE
Importation of European employment policies will not necessarily work in a developing country such as Namibia.
We wish Namibia good luck with its new hubs. In this, Africa’s youngest independent state, a country wracked with AIDS, it is critical that the policies adopted enhance further prosperity.
It is unlikely that having the government pick out individual industries and places to invest will be the path to optimal success. Better to free up the entrepreneurial spirit of the Namibian people and let them find, in agriculture and industry alike, the paths to sustainable prosperity.