Market Regulations

The Namibian Agronomic Board regulates the horticulture industry through the Market Share Promotion (MSP) since 2005, which is implemented by AMTA as an agent of the NAB since 2015. In terms of the MSP, importers of fresh horticulture products are required to source a minimum percentage of their products from Namibian producers, prior to qualifying for an import permit in a given quarter. If traders do not meet the required percentage, a pro-rata import permit is issued.

The initial MSP was set at 5% in 2005. This increased to 44% in 2015/16. The MSP% that traders need to achieve is established by mutual industry consensus at the National Horticulture Task Team (NHTT) meetings, which is then recommended to the Board. NHTT meetings are held 3 times per year.

According to the government Gazette of 31 December 2014, AMTA collects a 1.4% levy on sales from local producers, 5% on imported horticulture imports and 1.4% from traders as a general purchasing levy.

The objective of the MSP is to create a more dynamic and favourable marketing environment. Traders are encouraged to engage producers through commissioning planting agreements, to increase local sourcing. Producers are therefore motivated to increase production according to market demand, as the marketing risk is reduced. Ultimately, by implementing the MSP, the investment in the Namibian agriculture sector is stimulated.

It is important to note that the MSP can never reach 100%. This is because commodities such as apples, which cannot be viably cultivated in Namibia due to unfavourable climatic conditions, will always be imported.

In countries like South Africa where climatic conditions and favourable temperatures for growing certain crops vary throughout the year by geographical location, the possibility of a continuous supply of certain commodities exists. This is particularly relevant, for example, to crops such as potatoes which are sensitive to frost. Limited seasonal variance is experienced in Namibia, necessitating import of produce from other production regions outside of Namibia at a time when it cannot be cultivated in Namibia.

The main elements of the horticulture market regulations, as implemented by AMTA for the NAB, are the:

  1. Implementation of the Namibian Market Share Promotion scheme for all controlled and special controlled products (such as potatoes and onions), which includes the processing of all trader invoices on the Agricultural Marketing Information Database (AMID).
  2. Implementation of the trader import permits system.
  3. Border control to ensure compliance with the MSP rules.

  

Market Share Promotion (MSP)

The March Share Promotion (MSP) achieved for the 2015/2016 financial year was 46%; calculated on the traded value of locally horticulture produce compared to imports. Figure 1 shows the trend for monetary values of locally sourced fresh produce versus imports, as well as the MSP threshold versus actual MSP obtained per quarter. In 2006, during the quarter 1 permit period, the MSP threshold was 12.5% compared to the 19% actual MSP at national level but, in 2016, in the corresponding quarter permit period, the MSP threshold was at 44%, and the actual MSP obtained was 46%. This indicates an increase of 27% more than the actual MSP obtained in quarter 1 permit period of 2006.

Figure 1

  

Special Controlled Product Measures

In addition to the MSP rules, certain products such as potatoes, onions, cabbage and butternuts entail separate import permit requirements, when there is sufficient produce available in the country. The objective of the import permit requirement is to ensure that these products are not imported when Namibia has sufficient produce available, according to the required market quality. The local produce is therefore marketed first, before imports can take place.

Onions
In 2015/2016 financial year, a closed-border period was instituted for importing of normal onions from 1 June to 15 December 2015. According to figure 2x, these restrictions resulted in an increase of 140% in local marketing of 7,567 tons of white onions, compared to 3,149 tons in the 2010/2011 financial year. Only 2,939 tons (39% of total demand) were imported, and 9,288 tons were exported when the local market was over-supplied.

Figure 2

Potatoes
In the 2015/2016 financial year, no closed-border period was instituted for potato imports, due to the insufficient local availability of potatoes, especially washed potatoes that constitute more than 90% of the domestic demand. Further investment is thus required by the potato industry to be able to meet the market demand for washed potatoes. Figure 3 shows that 7,055 tons (26% of total demand) of locally produced potato and 19,651 tons of imported potatoes (74% of total demand) were marketed through the formal channels. A total of 3,213 tons of potatoes were exported, which could not be marketed locally.

Figure 3

Wheat SAFEX
Go to the Wheat SAFEX graph for the latest Wheat prices
White Maize SAFEX
Go to the White Maize SAFEX graph for the latest White Maize prices

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