ZIMBABWE last year imported milk powders worth US$28 million from South Africa. That was a huge drain of foreign currency reserves for a country already endowed with the right climatic conditions and vast swathes of land to rear its own herd and feed the nation. But as Zimbabwe Association of Dairy Farmers (ZADF) chairperson Kudzai Chirima (KC) tells our Business Reporter Melody Chikono (ZI) in this interview, the battle to stop the imports has just kicked off. By 2022, he declares, milk imports will be history and Zimbabwe will be well placed to produce enough to meet domestic demand. Below are excerpts of the interview:
ZI: We have over the years spoken about challenges the dairy industry is facing. What can you say have been the changes that you witnessed so far in the sector?
KC: We have seen several changes. We have had partnership with government come into fruition. So far, they have imported 200 heifers. Three hundred more are coming. We are hoping that the 300 will arrive March 2021, taking the total of 500. That will obviously increase milk production. Our biggest constraint this year has been the drought. We have had no silage and stover and the water has been scarce. This has strained animals and affected overall milk production. Feed costs have increased significantly and farmers were unable to afford the costs. Drugs are imported and the exchange rate applied by drug retailers has been way beyond the official rate. Dairy farmers were being paid through the RTGS. This made it difficult to access drugs.
But we have had several farmers joining the dairy sector. Hopefully, the milk production deficit we experience in May, June and July will be covered in from December to March. We are hoping to achieve our target by the end of March next year.
MC: So, what is the current deficit?
KC: It is about 4%. In May and June, we had a 4% down on last year and in July we were 5% down. We are hoping for the best as the rains start falling. We are quite optimistic because the weather forecast says there might be a better harvest this year. If that happens, we will be grateful knowing that production will increase.
ZI: Tell us about production numbers?
KC: We were well off target. In May we were 400 000 litres less than our target. In July we failed to reach our target by 400 000 litres and in August we were 500 000 litres short of our target.
ZI: What key challenges remain unresolved?
KC: The biggest one is farmer mechanisation. We are happy that the Belarus farm mechanisation scheme has come to fruition. We will be asking our dairy farmers to apply for loans. Dairy farming is difficult because you can’t make profits immediately. We are hoping to get tailor made loans that are suitable for dairy farmers. In terms of capacity, we are busy training farmers to make silage and avoid buying expensive concentrate. We are trying to improve animal husbandry hygiene so that we increase production. Government is saying it wants to open a land bank and Agribank will be part of the land bank. Effectively, government is trying to ensure that no farmer with capacity to borrow can fail to get a loan. We are hoping that government will be cognisant of interest rates because historically all agricultural finance organisations have offered loans at concessional interest rates because of the nature of the business.
ZI: Has there been any progress on the bankability of the 99-year lease?
KC: We have been told it is still being looked at. So far, we have heard that they are working to make sure that it is bankable. We have now resolved the land issue with previous land owners. I’m sure we will now move forward now that we have a solution with the compensation of the previous white farmers. The President has said we have to solve the issue. As farmers, we want a solution so that we can borrow and invest knowing that we are putting money on land that is under no threat.
ZI: What has been the impact of COVID-19 on the dairy sector?
KC: We were affected badly considering that most of our drugs and dipping chemicals are imported. Lockdowns meant that we could not import anything. Prices were hiked and it became prohibitive to buy drugs. The sanity that has been brought by the reserve bank through the auction system has seen the margins going down. It has been difficult for farmers to make profits.
ZI: What is your import bill at the moment?
KC: We are still importing milk powders from South Africa. Last year, we imported milk powders totalling US$28 million. We are hoping to close that gap and make sure that the importation of powdered milk from South Africa is taken out by producing fresh milk locally which can be dried if people want powdered milk. We are importing powdered milk because we are trying to fill in the gap that is between what we are producing and what we should be producing.
The deficit is what we are importing. But we hope that by 2022, the gap will be closed and imports will be a thing of the past. We know that there is a mining company which is importing cows into the country. So far, they have imported about 400 cows. If they import more cows the gap will shrink. We are hoping that by June 2021 we should have narrowed imports significantly.
ZI: How much of the industry’s installed capacity is being utilised?
KC: When you go to the processors, they say they are running well below 50% most of the time.
They are saying they have high capacity but have no milk to process. We are hoping we will be able to bridge the gap by June 2021 to the margin between 70% and 75%.
ZI: How have dairy farming competitions added value to your operations?
KC: These competitions have brought so much value because they motivate every farmer to achieve the best. By so doing, they increase production, do inspections on their farms and so on. This has driven farmers to improve their hygiene. Others learn by copying best practices from those who have done well.