THE Zimbabwe Association of Dairy Farmers (ZADF) says it has failed to meet its 2020 first-quarter target due to currency volatility.This comes against the backdrop of major headwinds that include a crippling liquidity crunch, fuel and foreign currency shortages, low capacity utilisation and runaway inflation which stood at 676,39% for March.
ZADF chairman Kudzai Chirima told businessdigest that they had managed to produce 6,3 million litres of milk for March, which fell short of the seven million litres it had targeted for the period.
“In February we produced six million litres of milk and produced 6,3 million litres in March. It falls short of the target of seven million litres we had set for the quarter,” Chirima said.
He said the weakening of the local currency has had a devastating impact on dairy production.“We are not performing as we should because our farmers are struggling due to the currency volatility which wreaked havoc on the dairy sector,” Chirima said.
“Farmers are expected to sell their milk in RTGS, but cannot access foreign currency at the intermarket rate of ZW$25 to buy inputs, meaning they have to go to the parallel market, which is much more expensive. We do not expect any growth in the sector at all this year.”
Chirima revealed that he had met dairy farmers during his countrywide assessment. The farmers, he said, complained that they are producing milk at a loss, which is unsustainable.
Chirima said the coronavirus pandemic, which has resulted in hundreds of thousands of fatalities, has also been a major obstacle. He said the national lockdown, which began on March 30, to curb the spread of the pandemic has hampered operations. Chirima said this has been worsened by the closure of borders, particularly Beitbridge.
According to a report by government titled First Round Crop and Livestock Assessment 2019/2020, dairy production increased by 5,89% from 75,4 million litres in 2018 to 79,9 million litres in 2019. It revealed that the national herd stands at 38 000. Of that number, 12 000 are milk-producing cows at an average of 14 litres per animal per day.
Milk production levels have dramatically plummeted from the early 1990s peak of 260 million litres per year and producers are struggling to meet the annual national requirement of 120 million litres a year, as the industry grapples with the devastating impact of the chaotic land reform programme and economic turmoil. The country’s dairy plunged from a high of more than 119 000 cows to just over 26 000 in the period between 1987 and 2015, according to statistics by the ZADF.