The Sunday News
Judith Phiri, Business Reporter
THE Zimbabwe Association of Dairy Farmers (ZADF) has expressed concern over the payment system by milk processors where they are getting only 10 percent of their proceeds in US dollars and 90 percent in local currency saying the ratio was unsustainable.
Some of the processors include Dairiboard Zimbabwe, Kefalos, Alpha Omega, Nestle Zimbabwe and Prodairy.
In an interview, ZADF national chairperson Mr Kudzai Chirima said the payment system was shortchanging farmers.
“The problems in the dairy sector emanate from the costs of feeding and maintaining the cow. In most cases the farmers are producing milk, but are not getting full recovery on it. We are having challenges as far as the payment of milk is concerned. We are getting 10 percent in US dollars and 90 percent in RTGS, but we need foreign currency to buy diesel and machinery. We are calling on those in authority to say even if they recommend 50 percent of what you deliver in the local currency and 50 percent in foreign currency it would be better.”
Mr Chirima said another solution would be for Government to specifically identify service stations where farmers can be able to get diesel for their operations in RTGS. He said the current payment system was affecting farmers as they had to access drugs for livestock, stockfeed and other dairy essential in US dollars. Mr Chirima said processors were also paying farmers less with most of them resorting to the parallel market.
“Informal markets are paying US$1 per litre along the highway roads, while processors are paying ZWL$0,48 per litre. Most of the farmers are now selling their milk along the highways because they get a US$1 as compared to what they get from the processors.”
This has seen milk available at the farm level and not at the processing level. However, he said this also posed a health threat as the informal traders were not taking precautionary measures to ensure their product is safe for consumption.
Mr Chirima said the price of stockfeed has increased drastically over the past year, thereby affecting production.
According to the Stockfeed Manufacturers Association of Zimbabwe, which includes major players such as Natfoods and Profeeds, the average cost of raw materials in 2020 went up by 886 percent, compared to 2019.
Mr Chirima said although the availability of milk in the country was stabilising after a shortage that was experienced previously, the payment system needed to be looked into.
“Volume was up by six percent compared to the same period last year as at the end of May. But I’m sure as at the end of June the figures are being worked out and they should be up for fresh milk.”
He said as the country did not have sufficient fresh milk, it had to augment with powdered milk mainly imported from South Africa.
Mr Chirima said there were access challenges of the powdered milk due to the Covid-19 pandemic, with delays in processing of paperwork and coming in of the powdered milk.
Nestlé Zimbabwe’s Harare factory, corporate communications officer Mrs Yamurai Zhou said the current policy of allowing processors to import duty free milk powders in proportion to their raw milk intake to mitigate the gap between supply and demand, needs to continue until such time the country becomes self-sufficient.
