Competition increases for Norway beef quota

Ellanie Smit
Increasing competitiveness in the beef industry has broadened the scope of participation in the Norway beef quota, improving the chances of more exporters qualifying for the market.

Manager for information at the Livestock and Livestock Products Board (LLPB) of Namibia, Ace Mutelo, explained that Namibia equally shares a quota of 3 200 tonnes for the export to Norway, with Botswana administered under two different regimes.

He said the generalised system of preferences (GSP) quota of 2 700 tonnes is allocated to importers on a first-come, first-served basis.

Meanwhile, the European Free Trade Association’s (EFTA’s) and Southern African Customs Union’s (SACU’s) quota of 500 tonnes is allocated through an auction purchase.

Quotas are then administered through firm-specific allocations in Botswana and Namibia.

According to Mutelo, Botswana and Namibia were first approved for export in 1995. Exporters have since had preferential and duty-free market access to Norway.

Value chains

Mutelo said the Norway quota award model (NQAM) developed by the LLPB (formerly known as the Meat Board of Namibia) is premised on the principle that more should be allocated to exporters that have sufficient relative capacity to fulfil quota requirements and act as a conduit for the transfer of derived economic benefits to the Namibian value chain.

He said this principle is broken down into sufficient relative slaughter ­capacity as measured by the industry share of a processor in comparison to other eligible participants as well as the transfer of derived economic benefits to the Namibian value chain.

Mutelo stressed that industry market share is the most important factor determining the quota ­allocation and accounts for 50% of the total allocation of 800 tonnes in Namibia.

“It is measured by the number of cattle that a processor can produce and slaughter. It also indicates production capacity, which is crucial in ensuring that the demand for beef is sufficiently met by supply.”

Mutelo said a processor who can attract a large number of animals for slaughter is likely to sustain employment numbers and meet other criteria.

Capacity building

He said industry development is a critical principle in the form of capacity building.

“Hence, the slaughtering activity in the relatively under-developed industry north of the veterinary cordon fence accounts for 20% (320 tonnes) of the quota to encourage operators to set up export facilities there.”

However, to fully benefit from this portion of the quota, processors ought to pay at least 75% of the prices paid to producers south of the veterinary cordon fence to those north of the fence.

“On the other hand, up to 20% of the total quota is allocated solely based on prices paid to producers south of the veterinary cordon fence.”

Mutelo said the rationale is that prices collected in Norway should filter through to producers who supply cattle from which beef is produced to develop the primary producer as an important player in the value chain.

“In recognition of the role of the tertiary sector in general and the logistics industry in particular, processors are encouraged to utilise the harbour for their logistic needs.”

Therefore, 10% of the quota is allocated towards the local harbour.

“In this respect, exporters who export a large quantity of beef through the Walvis Bay harbour stand to benefit more.”

He said the model developed by the LLPB is a deliberate effort to ensure the development of the primary, secondary and tertiary sectors of the Namibian economy.

The benefits offered by the Nor­wegian market are equitably and justly distributed to industry players using the quota award model, he added.

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