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Namibia Dairies wants milk import restrictions

The Namibian

Namibia Dairies Wants Milk Import Restrictions

By Chamwe Kaira

16 July 2013

Namibia Dairies has applied to the Ministry of Trade and Industry for the introduction of ’Quantitive Restrictions’; a move that will limit the amount of imported dairy products into Namibia.

The Namibian understands that the company lodged an application with the ministry last year for it to consider restricting dairy imports. However, the Ministry of Trade and Industry is reported to have suggested that the Namibian dairy industry as a whole should make a joint proposal on the import restrictions.

Three years ago, Namibia Dairies opened one of the most modern dairy farms in the world, which is located near Mariental. The !Aimab Superfarm currently houses approximately 1,500 cows in milk, to be increased to 2,000 cows over the next three to four years. !Aimab was built and equipped with tested, state-of-the-art technology from New Zealand, Israel and the United States.

The application for import restrictions by Namibia Dairies is seen as an attempt to protect the current production at !Aimab by limiting cheap milk products imports and also seeks to help the dairy farmers, a source in the trade ministry told The Namibian.

Namibia Dairies is said to have warned the government that !Aimab could be forced to close down if it reached a point, at which it could no longer compete with imported products.

Wallie Roux, Manager of Research and Development at the Namibia Agricultural Union said in an interview yesterday that imposing some form of restriction on imports would help local diary farmers but also mentioned the move should not kill competition. He said local farmers are already burdened by EU import procedures, which they have to meet like those who produce beef. "We support the move to level the playing field. We need to control the market but we must not hamper competition," said Roux.

Roux said Namibia was the only country in SACU with an open door policy for dairy imports. Botswana and Swaziland have restrictions in place already, he added.

The Ministry of Trade and Industry will host a public consultation on the importation of dairy products on Thursday. The ministry said in a notice on Friday that it has received an application for the importation of quantitative restrictions on the importation of fresh, extended shelf life and ultra high temperature milk, buttermilk, curdled, yogurt and other fermented milk into Namibia .

Patricia Hoeksema, Group Manager of Corporate Relations at Ohlthaver & List Group of Companies said in an interview yesterday that Namibian dairy industry which comprises of the Dairy Producers Association, independent farmers, independent processors and Namibia Dairies had requested the government to impose Quantitative Restrictions on the importation of dairy products.

"This would mean that imports may constitute only the prescribed volume as per the quota allocated, while the rest of the dairy products would have to be sourced from within Namibia," she said.

Hoeksema said the protection is not only for the benefit of Namibia Dairies, but also the dairy farmers represented by the Dairy Producers Association, independent dairy farmers and other processors and ultimately the Namibian consumer.

"Without a government intervention, the Namibian dairy industry could collapse resulting in about 1,500 employees losing their jobs. Without a level playing field, the local dairy product cannot compete with regional dairy imports. We require a level playing field that is not at hand due to different methods of raw milk production as well as cross subsidisation of transport cost by dairy importers.

"There are numerous reasons why the cost of production in Namibia is higher than in some neighbouring countries. Namibian producers may not use any feed supplements like Rumensin (Antibiotic) or growth hormones like RBST unlike their counterparts in South Africa, which support more effective feed conversion and animal health," said Hoeksema.

She said the Namibian producers cannot supply dairy products at the low price required to compete with some imports. The sustainability of the Namibian dairy Industry is currently under severe threat and if all measures are not taken to reverse the current trend, soon Namibia will not have a dairy industry of its own, she said.

"This means that Namibia Dairies can close down and the N$140 million Superfarm investment can be lost; various farmers can cease their dairy activities. In addition to the 1 500 potential job losses, and the cost of Namibia not having its own dairy industry, the greater long term implication of not protecting the Namibian dairy industry will be that the Namibian consumer becomes the price taker, and will be held at ransom by the price of imported products that don’t need to compete for price under competitive market conditions," she said.