Efficiency Of Botswana Meat Commission

Over the years BMC has been characterised by a series of fluctuations in its throughput and also the inability to operate at full capacity. An interesting detail is that, demand for beef and beef products has risen as evidenced by a rise in domestic consumption. BEDIA (2008) reports that, the number of cattle supplied to BMC over the years has declined, while on the other hand, domestic consumption has increased and local butcheries have attracted an increasing number of cattle made available for slaughter: as a result throughput at BMC abattoirs has declined leading to excess capacity.Given that, Botswana has higher potential of meat production than it actually produces, there is therefore a need to determine BMC level of efficiency and identify possible causes of inefficiency so as to reduce existing excess capacity and improve its performance. This study employed Stochastic Frontier Analysis to assess technical efficiency of Botswana Meat Commission. The results indicate that BMC is not technically efficient. The study also used Ordered Logit to assess factors having an influence on efficiency. Factors that were found to have influence include material input, producer prices and exchange rate. In consideration of the potential that the sector possesses such as diversification of the economy and export earnings among others, strategies that can enhance BMC performance must be fully explored. Options that can be explored include; opening up of the market so that producer prices are competitively set and further processing of by products which can be outsourced so that the commission concentrates on efficient production of beef and beef products