New Ag Minister Offers Hope for Struggling Dairy Industry

NAMIBIA - Newly-appointed agricultural minister Alpheus !Naruseb last week promised a concerned delegation from the dairy industry that he would expedite amendments to the Dairy Act so that the necessary support can be given to the crippled local dairy sector, as soon as possible.
calendar icon 19 March 2018
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According to AllAfrica, !Naruseb's promised lifeline comes just days after New Era reported that if the long-awaited bill to regulate the importation and export of milk and dairy products - due to be tabled in parliament soon - is not given the green light, it could spell disaster for Namibia's small dairy producers.

The minister stressed the importance of the Namibian dairy industry becoming less reliant on imports from South Africa when he made the promise to a delegation consisting of the chairman of the Dairy Producers Association, Kokkie Adriaanse, and senior staff members of Namibia Dairies.

The country's 16 dairy producers and the entire dairy industry are in dire straits. On 23 February, a raw milk price reduction for Namibian producers of 10 cents per litre came into effect and a further possible 10 cents reduction is expected by the end of April.

This is the second price reduction in the last seven months for producers, and these price reductions could potentially mean the end of business for some of the country's dairy producers.

In addition to the price reduction, payments to producers are being deferred on a monthly basis. Producers are also warned not to increase milk production, as excess milk will most probably not be taken up in the market due to imports. There are currently less than 3000 commercial dairy cows left in Namibia.

This critical situation in the dairy industry can be ascribed to mostly the influx of UHT milk and closely related other dairy products into Namibia. Recently, imported UHT milk from SA was selling for cheaper than Namibian bottled water in some outlets.

Namibia Dairies Managing Director, Gunther Ling, told New Era that the price of milk and other dairy products like yogurt is set to increase while milk volumes produced on Namibian farms in 2017 are four per cent lower than five years ago.

Namibia experienced a 15 per cent decline in fresh milk and UHT between July and December last.

The market offers a fully open and non-regulated trade in milk and other dairy products. This results in increasing import competition risking the replacement of local dairy production and manufacturing.

Almost all butter and cheese sold in Namibian shops are imported.

Feeding costs increased by nearly 50 per cent in 2015 and total production costs increased by about 28 per cent over the same period.

High customs tariffs to Angola and Botswana hampered exports to neighbouring countries and prevented market expansion.

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