By Wezi Tjaronda
Namib Dairies and the Dairy Producers’ Association have reached an agreement that will see milk producers getting a higher base price per litre of raw milk delivered to the milk manufacturing company.
A statement from Namib Dairies said yesterday that the adjustment, with effect from July 1, is part of an annual increase in the price of raw milk, which comes in the wake of an internal special relief given to milk producers during February this year. The agreement was reached on May 16.
Managing Director Desmond van Jaarsveld said the two parties have decided to keep the increase an internal matter.
“We have decided to keep the figures internal between the ND and DPA,” he said, adding that it was a substantial increase.
This increase will also affect consumers as they will fork out between seven and 10 percent more than what they are paying for fresh milk, cheese, UHT milk and other milk products.
“We are proud to have reached a settlement that will ultimately strengthen and create a more independent local dairy industry by assisting milk farmers to recover their production costs and encourage them to increase production,” said Van Jaarsveld.
In April, the price of fresh milk went up by 50 cents per litre after the DPA demanded an increase to prevent the industry from collapsing.
Van Jaarsveld told New Era yesterday that, while last year farmers were penalized for overproduction, this year will see the company giving incentives to farmers producing more than their quota.
With the Infant Industry Protection, which authorizes a 40 percent levy on imported long-life milk, Van Jaaarsveld said this would help ensure that Namibia is less exposed to milk shortages that have hit neighbouring South Africa and many other countries.
The local dairy industry has in the past years absorbed the high input costs to avoid passing on the impact to the consumers.
But Van Jaarsveld said the situation could no longer be sustained because of unfavourable global macro-economic conditions ranging from rising feed and transport costs to competition from heavily subsidized milk products from European countries, which have affected local production.
DPA Chairman, Japie Engelbrecht, said the two parties had agreed to review the price and cost situation on a quarterly basis to allow a shorter response time to major cost movements at producer and processor levels.
The company also announced a shortage of imported cheese and UHT milk resulting from a shortage of milk in South Africa.
Due to an increase in demand for long-life milk, Namib Dairies have doubled their production of UHT milk from 300??????’??