ZIMBABWE’S dairy industry is targeting to double the current production capacity of 68 million litres of milk by 2022, in the backdrop of national demand which stands at 120 million litres. This comes as the industry is facing a myriad of problems that have, in turn, affected the sector’s total capacity utilisation. Zimbabwe Independent business reporter Melody Chikono (MC) caught up with Zimbabwe Association of Dairy Farmers immediate past president Emmanuel Zimbandu (EZ). Below are excerpts of the interview:
MC: Give us a brief overview of the industry.
EZ: The industry is picking up, besides the current challenges, but we are trying to find ways and means to continue to move forward with our dairy business.
We have lot of challenges in Zimbabwe, which could normally destroy the dairy industry if not really addressed. There is the issue foot and mouth disease, which is deadly to the dairy calves. Government has really come to assist us with getting the vaccine, but coming up with a way of stopping the deadly disease is a long-term strategy. The reason is that in Zimbabwe we don’t see the importance of having boundaries in our farms. There is a lot of movement of cattle from one area to another, spreading the disease. We need this to be stopped. If law enforcement agents can assist to see to it that there is a no unnecessary movement of cattle without authority, that would be really helpful. Also, there could be a way of seeing that all the boundaries in different properties are in place and that people do not trespass in other farms; that will help to fight the diseases. The other challenge is that we have is the issue of vaccines and medicines of the cows. Their cost is unbelievable. When we get them, we get charged amounts that are unsustainable in the dairy industry.
The other challenge is the cost of producing milk. Yes, we are getting better producer price but the cost is eroded by the cost of producing the feed which is 60-70 % on the total cost of the milk, leaving us with very little in terms of profit margins. If government could assist by making available the foreign currency, which we know is now very difficult to access, but we are hoping things might turn out for the better to see the growth of the diary industry.
MC: What are the current production levels?
EZ: We are still far away from meeting the local demand because our local demand should be more than 300 million litres, but right now we are sitting on 67 million litres and we are hoping that by year end we will be at 70 million litres, considering where we want to get so that we if we get 300 million litres or more, then our processors will be in a position to come up with products from raw milk from Zimbabwe.
MC: How long do you think it will take Zimbabwe to be in a position to export?
EZ: It should not be long but, first, we need finance for our operations in the dairy farming. Two, we need finance to have machinery to produce our own feed and we need security — if someone is in the dairy they need that security to say in the next so and so years we will not be disturbed. As long as that is in place it will not take time to build up the industry again. We have a challenge in building up the herd, but once finances are in place, it is easy to be where we want to be.
MC: So in terms of finances, how much do you need?
EZ: Including machinery, dairy farmers needs something in the range of US$500 million. When we talk of the industry we will be including the processors so the figure is for farmers only. If the facility is in place and we are given more than five years to repay the loans we will definitely see more growth within a short space of time. It will enable us to come to 20 million litres per annum. It is possible considering our history which shows that we used to produce more than that
MC: What is your view on the 99-year lease for land tenure?
EZ: The sector has been affected but we are hopeful since government has come up with a position that the dairy industry shouldn’t be disturbed. We are grateful that there was at least some protection. Now the 99-year lease is a good one, but that at lease has to have some value to go with it and become bankable. Banks are not having it and there is no way a dairy farmer can have collateral. Government should look into that and also ensure that even the communal lands will have some value on it. If we continue to have land which does not have any value, the concept of having milk production increasing will not come into effect.
MC: Can you quantify the loss the dairy industry has suffered due to this issue of collateral?
EZ: What I can say is that industry has really suffered though I cannot give it a value. We are happy that the processors have invested in equipment, but they are not utilising that equipment to its maximum because that can’t get the raw milk from farmers.
MC: How sufficient are the foreign currency allocations that you are getting?
EZ: We get forex allocations now and then, but it is not something we can talk about, considering that just the vaccine is expensive. We are talking about the foot and mouth vaccine which we are importing from Botswana and costing the nation about US$1 million .This is a lot of foreign currency. The vaccine is just for one year for the whole country. As a country we cannot continue having that as a way of moving forward. I cannot give specifics as to how much forex we are getting that requires the whole industry which is allocated goes partly to the veterinary side and some to processors to get spare parts then there is also packaging materials of the products. Almost everything is imported.
MC: Let us talk about the five-year lease that you earlier described as unsustainable.
EZ: This was from last year where there was a proposal that we get five-year leases as dairy farmers. We have already engaged government to say there is no way dairy farmers can do with five years because if you are given a cow today it takes more than two years really make you. The 99-year lease is good, but it is only problem is that government has to expedite it and ensure that it’s used as security and collateral to use at banks.
MC: How about the issue of levies?
EZ: To start with, there is a levy which was brought off by the AMA (Agricultural Marketing Authority), Statutory Instrument 129 which demands remission of 1/c per every litre of milk produced. So, we need to understand if that money is available what will it be used for yet at the moment the issue of vaccine was an initiation of the government — not that it paid for us. The industry paid for the vaccine. The levies are just too much for the industry, but the 1c per litre levy needs to be stopped. Government also came up with a position on land levies that see a blanket figure being paid for land regardless of which region you are. We all know that what you can grow in Matabeleland you can’t grow in Midlands due to different climate conditions but the levy disregards that and the figure is the same.
MC: How has the industry been affected by electricity outages?
EZ: We are grateful that at the moment we are not having problems with power but when we have faults it takes long to get it fixed and the areas which transformers have been tampered with it’s taking long to get replacements.
MC: You also highlighted the issue of stockfeeds in relation to command agriculture?
EZ: What we are trying to bring to the attention of the authorities is that command agriculture especially on maize production has proved that it is working. On the dairy side we produce silage and we cannot take that to the Grain Marketing Board(GMB).
We are saying government should consider retaining 50% of the maize that is supposed to go to GMB for stockfeed.
MC: What is your comment on the current size of import bill of the dairy sector?
EZ: The current position is that we import US$7 million, which is not healthy for the industry or the country. To have US$7 million worth of import is a lot of money to be spending and we will not be able to achieve the goals of the industry at that rate. We are lobbying to see that which affect the industry is looked into and which will be in apposition to reduce foreign currency, we want to see security of tenure making the 99-year lease bankable to enable fame access to finance.