Windhoek — Local dairy farmers are disadvantaged when compared to foreign producers who do not need to comply with Namibia's stringent requirements. Producers claim the existing regulatory framework in Namibia does not support a level playing field between importers and local dairy producers.
The existing and severe market conditions also put pressure on selling prices, resulting in unmanageable milk surpluses. Namibia's milk production standards that prohibit the use of genetically modified organisms (GMO's), hormones and antibiotic feed supplements, which are not necessarily applicable in some other markets such as South Africa, leave local producers with higher raw milk production costs.
With these words, Roux-ché Locke, Group Manager: External Relations of the Ohlthaver & List Group of Companies this week responded in the wake of Namibia Dairies announcing last Friday that it would cut the milk delivery quota of local dairy producers by 50 percent starting today.
"In light of these pressures, Namibia Dairies has implemented a number of measures to support the Namibian dairy industry. These have included measures such as packaging innovations, a focus on buying local and various other pricing promotions. Despite all these efforts, the local market is still unable to absorb the current local milk supply in the face of the high level of cheaper imports."
Over the past few months Namibia Dairies and the Dairy Producers Association (DPA) have on numerous occasions discussed the challenges facing the primary dairy producers in Namibia, and what type of measures need to be implemented to ensure the long-term survival and sustainability of the industry.
Chairperson of the DPA, Kokkie Adriaanse, yesterday confirmed a quota system has been suggested in correspondence to the Ministry of Trade and Industry and the Ministry of Agriculture, Water and Forestry. The quota system proposes the solution would be for government to allow only 20 percent of milk products to be imported from South Africa and for 80 percent to be delivered by local producers.
Locke said Namibia Dairies has already cut back planned milk production at its own milk production unit at !Aimab Superfarm and has no option but to cut its raw milk intake further by reducing its milk intake from local dairy producers until such time as market conditions have improved. She further said Namibia Dairies is engaging all role players to find sustainable long-term solutions to support the local dairy industry and encourage them to continue supporting Namibian brands.
Adriaanse says the proposed quota system is the only short-term solution he deems fit to bring reliefe to the current situation. "We (the DPA) have been informed that the Ministry of Trade and Industry is busy discussing and strategising on the way forward, and also that we would receive further Infant Industry Protection. Other alternatives must now be sought to save the sinking industry in the face of stiff and relentless competition from foreign imports." He stressed that Namibia is the only country in the Southern African Customs Union (SACU) that has fully de-regulated its dairy sector, and that no restrictions of trade exist between Namibia and South Africa at the moment, resulting in a single free market.
He also maintains that the regulatory framework in South Africa allows producers to use hormones, feed supplements and antibiotics. "Namibian milk is hormone free, of an excellent quality, and produced without the use of banned feed supplements and antibiotics.
"But Namibian consumers prefer long-life milk to fresh milk as it is cheaper and has a longer shelf life.
"The only solution to our dilemma would be to introduce our proposed quota system," he concluded.