You Could Pay More for Milk

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By Wezi Tjaronda WINDHOEK Namibia’s dairy producers are demanding a price increase on raw milk to avert both milk shortages in the country and the collapse of the industry. As the situation is at the moment, fears are that milk producers who like any other consumer absorb price increases on fuel and other costs, especially in the northeast, may be forced to close their operations. The industry has been having problems and sounded a warning about the possible collapse of the industry two years ago, although at that time it was about the pressure of imported and more competitively priced milk. This time though, the Dairy Producers Association of Namibia (DPA) said price increases have not been effected for the past two years on fresh milk. This is putting tremendous pressure on the already ailing industry. “The reason for this state of affairs is that the producers did not receive any price increase for the past two years and instead they had to accept a price reduction of 10 cents per litre on raw milk in the middle of 2005,” said Japie Engelbrecht, Chairman of the DPA in a statement on Wednesday. He said currently all input prices including fuel, transport, medicine and fodder had increased and were carried by the producers. The price of fodder alone increased by close to 40 percent in 2006, he said, adding that fodder accounts for 80 percent of the total cost of one litre of milk produced. In an attempt to survive therefore, the industry asked processors and retailers to increase dairy prices, which should only benefit milk producers. Speaking to New Era in an interview yesterday, Engelbrecht said if the price increases on raw milk are not implemented shortly, nine producers in the areas of northeast Gobabis who are the most affected “will not go ahead”. Consequently, this will also result in a shortage of milk locally because the producers, although small-scale ones, account for between 30 000 to 70 000 litres of the total milk production, he added. The norm has been that the dairy producers have a price increase in June every year although they had to settle for a decrease. Currently, only 17 dairy producers are left who together have 2 920 cows. The industry provides employment to 211 workers who support 1 300 dependants. On average, these farmers produce 1.7 million litres of milk. Engelbrecht said the closure of the dairy farms would have a serious impact on rural areas regarding investment, employment. Milk prices will also increase in neighbouring South Africa. Recently the Namibia Agricultural Union in its newsletter quoted the Managing Director of the Milk Producers Organisation (MPO) in South Africa, Bertus de Jongh, as saying that prices of milk and dairy products would increase this year. The union said the South African milk producers attribute this to local milk shortages and low producer prices for milk for the past two years. Last year the Infant Industry Protection (IIP) for UHT (long life milk) milk was extended to 2012 following submissions by the Dairy Producers Association of Namibia. Due to this the IIP for local UHT milk at 42 cents per litre was increased to 40 percent of the import value although this has not yet been implemented.