WINDHOEK - Some seven million litres of dairy per annum has entered Namibia undeclared over the last six years.
A Dairy Producers Association (DPA) study in collaboration with the Namibian Trade Forum (NTF) reveals. The study by Dataspank shows that the Namibian dairy industry accounts for only one percent of all dairy products in relation to the South African dairy industry. Namibia’s total annual milk production is 24 million litres, which South African producers produce every three days. Whereas Namibia’s total dairy population is 3 000 cattle while some individual milk producers in South Africa have 3 000 cows per stable. The study used the South African figures to demonstrate that it is simply not possible for Namibia to compete against global markets. Nevertheless, the dairy industry in Namibia is seen as a sector of strategic importance for government in terms of employment, industrialisation and growth.
The study further shows that with a current population growth of 1.8 percent and with a constant per capita consumption of nine litres of UHT milk per day, there is great potential for growth in the industry. However, due to imports of UHT milk, this market share of locally produced UHT milk has stagnated, and especially imports have grown. Therefore, imports must be limited to allow the local sector to grow. Role players stressed the importance of supporting the local dairy industry, especially in view of the Namibian economic growth. It is hoped that the draft legislation, which will regulate imports, and which is currently at its final stage, will be tabled in Parliament this year to provide the necessary support to the industry.
Agriculture, Water and Forestry minister, Alpheus !Naruseb, has promised a concerned delegation from the dairy industry his personal support for the speedy conclusion of the amendments to the Dairy Act so that the necessary support can be given to the crippled local dairy industry as soon as possible. !Naruseb stressed the importance of the Namibian dairy industry becoming less reliant on imports from South Africa. The industry delegation consisted of the chairman of the DPA, Kokkie Adriaanse and senior staff members of local dairies.
The country’s 16 dairy producers and the entire dairy industry have been in dire straits for the past few years facing more than one price reduction in the last two years, which could potentially mean the end of business for some of the dairy producers. .
In addition to the price reduction, payments of producers are being deferred on a monthly basis. This critical situation in the dairy industry can be ascribed mostly to the import of UHT milk and other dairy products into Namibia. Recently, imported UHT milk from SA was selling for cheaper than Namibian bottled water in some outlets. All role players have called for immediate and serious intervention to prevent the collapse of the industry. The managing director of Namibia Dairies, Gunther Ling, told Farmers Forum milk volumes produced on Namibian farms in 2017 were four percent lower than five years ago. The market offers a fully open and non-regulated trade in milk and other dairy products and 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 have increased by nearly 50 percent since 2016 and total production costs by about 28 percent over the same period. High customs tariffs to Angola and Botswana hampered exports to neighbouring countries and prevented market expansion.
Namibia’s only long-life milk production plant, which belongs to the Ohlthaver & List Group, could face closure if the trend continues, resulting in almost 500 job losses. Milk prices in South Africa are exempt from value added tax (VAT) for consumers and Namibia cannot compete against the import of subsidised dairy products. In Namibia a 15 percent VAT is levied on all milk sold.