Subsidy could save dairy industry

Namibia's dairy sector is anxiously awaiting the announcement of a government subsidy to prevent total collapse.

18 November 2020 | Agriculture

ELLANIE SMIT

WINDHOEK



The dairy industry is awaiting a possible government subsidy that could save the industry from complete collapse.

Agriculture minister Calle Schlettwein recently met with role players in the dairy industry for the third time within a month in an effort to save the industry.

The dairy industry has been in crisis for years, caused by cheap imports of dairy products, increased feed costs and recurring droughts that affected the water levels at the Hardap Dam, as well as the associated poor economic situation.

According to the Namibian Agriculture Union (NAU), Schlettwein is cautiously optimistic that funds could be appropriated for the industry, probably in the form of a direct subsidy.

“The subsidy must be for all producers in the industry and not exclude anyone, including those north of the Veterinary Cordon Fence,” says the NAU.

According to the union, the budgeted amount must be presented to Cabinet for approval as part of the agricultural budget for 2021/2022.

“This is a long process of negotiations and will unfortunately not come into operation immediately.”



Dwindling production

By the end of July, it was expected that Namibian milk producers will only produce 16 million litres of milk this year, while national consumption is around 38 million litres.

In 2018, raw milk production for the year stood at 24 million litres. This figure dropped to 21 million litres in 2019, while the expected production estimate for this year is only 16.7 million litres.

This gap is expected to be filled by imports, which irked local producers and several have left the industry.



Imports

Meanwhile, Namibia Dairies has announced that it has partnered with a credible South African dairy supplier from where it will import UHT milk.

According to Namibia Dairies its new Nammilk UHT milk packaging will now be available in one-litre, full-cream and low-fat brick packs that are easy to store and stack.

“The industry was already impacted long before the outbreak of the coronavirus pandemic and the impact of these factors was exacerbated by the pandemic, to the point where local milk producers and farmers have had to and are on the brink of closing their doors,” said Namibia Dairies managing director Leonie Prinsloo.

She said the reduction in local raw milk supply has forced them to find an alternative source to fill the shortfall, leading them to partner with the South African dairy supplier from where they will import UHT milk.

The rest of the Namibia Dairies portfolio, including fresh milk, will still be produced locally.

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