By Desie Heita
The price of milk is going up at the end of the month. Meanwhile, the Dairy Producers Association has asked Government to consider intervention measures to cushion consumers.
An average increase of 13 percent is going to apply to the milk and dairy products produced by Namibia Dairies. The increase is a result of a 21.8 percent increase in the producer price, which the Dairy Producers Association (DPA) of Namibia has asked.
The DPA is also suggesting a monthly adjustment of producer prices according to fuel price hikes. “This is to avoid shocks in high price increases,” said the Chairman of the Dairy Producers Association, Japie Engelbrecht.
The increase is not going to affect the Super Milk brand, currently the cheapest fresh milk brand in stores. Super Milk is a brainchild of businessman Sidney Martin.
“Producer prices have increased 36 percent since April 2007 whereas the total input cost has risen 38 percent. All price increases of input costs have been absorbed by the producer, forcing the producer to cover the losses in income with income earned through other means,” said Engelbrecht.
The price of milk last went up beginning of January this year with 10.8 percent. “Unfortunately, input costs kept on rising with the producers unable to absorb any more price hikes,” he said.
The DPA suggests that Government steps in to help the industry by removing VAT tax on dairy products.
“This will not help the producers but consumers,” said Engelbrecht. He was rather quick to add that the industry is not interested in government subsidies as they feel such a move will not be competitive, unless it is on crucial inputs such as diesel.
“I personally do not like subsidies,” said Engelbrecht.
Animal feed, which determines approximately 80 percent of the total cost of one litre of milk, has gone up 49 percent. Lucerne and dairy concentrates went up 76 percent and 46 percent respectively. “Further increases in input prices are expected,” said Engelbrecht.
The DPA warns that should the situation continue, “It might lead to increased milk shortages due to the fact that milk producers will decrease milk production or leave the industry.”