Dairy industry struggles to meet national requirements

Latest dairy production figures show milk production levels have dramatically plummeted from the early 1990’s peak of 260 million litres per year to between 50 million and 65 million litres currently, as the industry struggles to recover from the devastating impact of the chaotic land reform programme and economic turmoil.

Kudzai Kuwaza/Hazel Ndebele/Fidelity Mhlanga

Dairy-cattle-

Although there has been marked improvement in the dairy industry from 2009, it still has a long way to go in meeting national requirements. Zimbabwe requires at least 120 million litres of milk annually, meaning the milk that is being produced is less than half of the national requirement.

In an interview on the sidelines of the Zimbabwe Association of Dairy Farmers (ZADF) annual general meeting held on Wednesday, Zimbabwe Dairy Industry Trust (ZDIT) chairman Tatenda Napata, who is also Dairibord Zimbabwe managing director, said the country produces less than half the national requirement and imports the deficit.

“We produced 58 million litres of milk and imported 12 million litres in 2015,” Napata said. “In the first half of 2016, we produced 31,5 million litres of milk and we imported 2,5 million. We expect to produce 8% more than we did in 2015 without importing any more milk this year.”

Although the production levels have increased significantly from the 2009 production levels of 37 million litres, this is still way below national requirements.

The industry, which has struggled since the land reform programme decimated dairy farming, has set a target of milk production of between 97 and 100 million litres by 2019, a herculean task for dairy farmers whose numbers have significantly dwindled in the last two decades.

Economist John Robertson said the dairy industry has plunged from what it used to be largely because of the controversial land reform programme.

“The dairy industry is now 80% less than what it used to be back in 1997 due to the land reform programme. We have less dairy farmers now as most people find it costly to carry out such business activities,” Robertson said.

“This has seen companies such as Dairibord privatising as well as importing milk largely from South Africa.”

Despite coming up with a dairy revitalisation strategy and a fund to help farmers, the industry still faces major challenges. These range from the exorbitant cost of production mainly emanating from the cost of feed and the unavailability of long-term funding from financial institutions as well as poor policies from government.

New farmers have struggled to attract funding from financial institutions because they do not hold title deeds.

Banks have been rejecting 99-year leases issued by government resulting in new farmers failing to capitalise their operations.

Most white dairy farmers lost their land during the land reform programme, but the government has chosen to give remaining white farmers five-year leases and not to further disrupt milk production as confirmed by Lands deputy minister Bertha Chikwama.

Dairy farmers have, however, objected to the move saying the farmers should be given longer leases.

ZADF chairperson Emmanuel Zimbandu told Chikwama that dairy farmers need more than a decade to realise profits adding that even after many years of being a dairy farmer, he had barely broken even.

Chikwama said she would consult on the issue. The poor state of the industry was reflected in the sparse number of dairy farms countrywide as pointed out by Chikwama at the AGM.

She said there were only eight dairy farms in Matabeleland South, 14 in Matabeleland North, 20 in Midlands, nine in Manicaland, 15 in Mashonaland East, seven in Mashonaland West and just one farm in Mashonaland Central.

Chikwama said going forward dairy farmers will be protected against acquisition of their farms by government as part of efforts to ensure the industry is not disrupted.

Despite the shortage of milk, ZDIT has, however, written to the Ministries of Industry and Commerce and Agriculture, Mechanisation and Irrigation Development demanding that import permits for dairy products be issued through local dairy processors only.

On June 17, the Ministry of Industry and Commerce gazetted stringent regulations meant to control the importation of listed goods available locally under Statutory Instrument 64 of 2016.

Dairy products on the list include coffee creamers, yoghurts, dairy juice blends, ice-creams, cultured milk and cheese.

“Any manufacturers who are not dairy processors and require milk powders for use in product will get their requirements through local dairy processors who will import on their behalf when local supplies are not able to meet demand,” reads a letter, dated June 28, signed by Napata.

“Import permits and licences should only be issued to local dairy processors and should be accompanied by a recommendation letter from the Zimbabwe Dairy Industry Trust.”

ZDIT said the restriction would prevent misuse of duty free milk powders coming from the Sadc region.

This has been met with reservation by other players in the industry who feel that ZDIT wants to monopolise control of the dairy industry.

The Confederation of Zimbabwe Industries (CZI), which is supportive of the importation ban of basic commodities including milk, claims the move could halt continued decline of local industry. CZI claims import restriction measures on milk will result in an improved dairy industry.