Agriculture Minister Calle Schlettwein said the only viable solution to saving the local dairy industry from total collapse appears to be restrictions on imported dairy products, while answering questions from the National Assembly the last week. These restrictions, which are said to be implemented through the country’s import and legislation, appear to be among the limited options available to the local industry, which has lost at least 50% of its production over the past four years. years, and where feed costs now represent between 70% and 85% of production costs.
“This would ensure the support of the local dairy industry, increase support for production, value chain development and downstream value addition. It is the national measure that can be imposed, ”said Schlettwein.
The Minister of Agriculture added that the relevant ministries and offices would consult on the implications of this proposed measure, and assured the nation and the dairy industry that all proper procedures will be followed before any implementation. import restrictions. Over a decade ago, the government attempted to protect the local dairy industry through the Infant Industry Protection (IIP) program between 2000 and 2007. However, according to Customs Union regulations in southern Africa, IIP can only be granted for the protection of small economies for a maximum of eight years.
“While this intervention may bring some relief, I call on the dairy industry to promote efficiency in its business operations in order to be competitive and innovative in the future to stand up to the competition. In the long term, we believe the industry needs to be supported, ”the politician added.
The introduction of the government subsidy of N $ 2 per liter of raw milk.
“It could have helped cover the utility costs incurred by producers by stimulating investments by dairy farmers to increase production. However, due to limited funding, this proposal could not be implemented. A total amount of around N $ 40 million was needed, ”Schlettwein explained.
The task force, which deliberated on recommendations to save the industry, includes representatives from the DPA, the Ministry of Agriculture, the agricultural union, the agricultural trade forum and Namibia Dairies.
Meanwhile, Schlettwein observed that the ministry is aware of the challenges facing the industry and is considering various options to help this crucial and important job-creating industry collapse.
He said the industry and its subsequent value chain are included in the overall agricultural development agenda of the Harambee Prosperity Plan as an important pillar that can contribute to the socio-economic well-being of Namibians, improve food security and household nutrition and create more jobs.
“This sector is very important to the Namibian government, and especially in the agricultural sector.
“After consultations with the DPA and milk producers last year in October at the Super Farm in Mariental, they explained the difficulties faced by the industry such as high production costs, the influx of imports of cheap dairy products, unfavorable exchange rates, regional and global competition and low raw milk prices, recurring drought and poor economic situation in the country, which have been further affected by the pandemic, ”said Schlettwein.
Namibia’s raw milk volumes are declining at a staggering rate. The average volumes of raw milk between 2015 and 2018 were 24 million liters. In 2019, that figure fell to 21 million liters, and in 2020 it fell even further to 17 million liters. The estimated milk production forecast for 2021 is 12 million liters, which means that the milk supply to processors is at extremely low levels.