The Minister of Agriculture Fidelis Molao might have stopped short of justifying the vegetable import ban imposed by government at the HATAB annual conference but he openly balked at the idea of suspending the substitution policy. Molao made it categorically clear that the government may even consider adding more items to the import ban when it is due for review in two years.
“Going back will reverse gains made. We are seeing an increase in needs,” he responded to a volley of questions from edgy delegates at the HATAB conference in Kasane. Key issues that emerged were implications of the ban on the hospitality sector in terms of shortages, elevated prices and lack of consultation. A question from the floor sought to know if there were chances of suspending the ban, especially given that certain ingredients were unavailable to meet set culinary standards.
However, the sum total of the minister’s response was not a chance. Molao saw the ban as a necessary evil, given lessons from the outbreak of COVID-19. The minster explained that the pandemic gave rise to shortages of food as countries closed borders to contain the virus. “From where we stand we are seeing an opportunity being created, an opportunity for rising and rebuilding sustainably for the future,” he told a conference. “When COVID hit, when borders were closed, we all felt the hit. We could not get all foodstuffs we needed from across the border. If we go back to old times, we have not learnt anything.”
He emphasised that what is important is to produce enough for “ourselves so that when a catastrophe comes, we do not look across the border. We can have enough from our farms, our backyards and live sustainably. That is why we are so resolute as a sector”, he said, appealing to the tourism industry to look at ways of encouraging communities to plant the necessary vegetables and other ingredients that it needs. “Organise local communities to do that which you require in your establishments,” Minister Molao said.
While HATAB did not object to self-sufficiency aspirations, the organisation questioned the lack of planning so that the policy did not impact on hospitality operators or the consumers in terms of skyrocketing prices. Lily Rakorong, the CEO of HATAB, asked the minister whether there was any regulatory impact assessment done and whether it was tested. Her concern was that government should have had a plan to minimise the impact. In answering, Molao was non-committal and not much forthcoming about what the government had done before implementing the policy. Pressed further on assessments, Molao’s response was a mince of words. “Not really,” he said. “We are working on that to see where we are.”
Rakorong’s argument was that the government had previously agreed at the High Level Consultative Council that it would consult with the private sector before implementing any policy changes. It appeared that there was never such engagement before implementation of the vegetable import ban.
The Chairman of HATAB, Joe Motse, told the minister that planning is crucial because agriculture produce entails a time for planting and period to ripening for use. “We should come up with a plan and should be aware of weather patterns,” Motse said, adding that BAMB should also be roped into the planning for efficiency. The position of the private sector is that this is an unpopular move, given that it was not well thought out and people not given time to prepare. In the end, Minister Molao admitted: “It will be a bumpy ride but it should be able to stabilise with your support,” he said.
The minister made it clear that from way back the government has had a regulatory framework for opening and closing borders to grow sectors. While he said the framework worked in such a way that “when we have enough, we would close”, the current ban did not factor in the lack of enough produce. Molao recognised that there will be an outcry but was firm that “drastic action needed to be taken. We can agree that the notice was not long enough and people were not ready”, he said, adding that they look at the tourism market to assist farmers. “People are saying you are not buying from us. As government we had to respond,” he insisted.
Economists have observed that the latest ban has led to shortages of vegetables and smuggling of basic items such as onions into the country. In its Q1 2022 report, Econsult found that this has led to sharply higher prices for some items. On average, four onions currently cost around P20 if one is lucky to find them. Econsult and FNBB have warned that the vegetable ban is adding pressure on food inflation. The April consumer price index shows that food prices rose by 2.2 percent m/m owing to increases in prices of oils and fats (7.3 percent m/m), vegetables (4.6 percent m/m) and bread and cereals (3.1 percent m/m). FNBB expects vegetable prices to continue receiving upward pressure from import restrictions imposed on selected vegetables.
Absa Bank economist Ridle Markus previously advised against sudden border closures for imports before considering capacity. “Do we have the skill? Do we have the knowledge? There are so many questions to be asked when you do this. If we cannot do it more efficiently and cheaper than the next market, there is no point of doing it. That is going to be costly,” Markus said. Regarding prices, Molao said they “will ultimately come down when people come into the space”.
