MTI imposes restrictions on dairy imports into Namibia
Cabinet has granted approval in principle to the Ministry of Trade and Industry to proceed to institute interim quantitative restrictions on imports of fresh, Extended Shelf Life (ESL, Ultra High Temperature (UTH) milk, buttermilk, curdled, yoghurt and other fermented milk through the introduction of an import permit system to be administered by the Meat Board of Namibia.
This decision comes after the Government, through the Ministry of Trade and Industry received a submission from the Dairy Producers Association (DPA) of Namibia stating serious difficulties that local livestock farmers and dairy producers are facing due to alleged unfair competition mainly from imports.The Ministry to the rescue of the industry has instituted urgent interim measures to restrict the quantity of fresh, Extended Shelf Life (ESL), Ultra High Temperature (UTH), milk, buttermilk, curdled, yoghurt and other fermented milk being imported in the country.
The short term relief being sought by the local dairy is to be instituted in terms of the relevant provisions of the import- Export Act. (Act No.30 of 1994). It is however envisaged that a permanent control measure will be instituted through an amendment to the Meat Industry Act, 1981 (Act No.12).
The SACU agreement allows the Government of Botswana, Lesotho, Namibia or Swaziland to impose temporal restrictions on goods being imported into their territories for purposes of protecting their budding or infant industries that are threatened by such imports. In 2000, Namibia exercised its right in terms of Article 26 and other relevant provisions of the SACU Agreement and granted Infant Industry Protection (IIP) to its dairy industry. The measure entailed the imposition of an additional tariff of 40 percent on all imports of Fresh, ESL and UTH milk. The protection was extended in 2008 for another four years up to 2011.
In an attempt to find a viable solution and avoid a potential closure of milking operations in the country, a series of emergency meetings took place between Namibia Dairies and the Dairy Producers Association, during which the parties agreed on an interim arrangement whereby the DPA members agreed to a base price reduction of 40c wper litre of raw milk delivered to Namibia as from 1 April 2013. This interim arrangement will be in place for three months. The reduced price of raw milk is negatively affecting local milk producers and has resulted in a loss of income estimated at N$328 000 per month. If causal factors are not promptly addressed they will result into a loss of N$3,9 million per annum.
The size of the Namibian market for fresh milk and ESL milk combined is estimated at 950 000 litres per month and about 1.6 million litres per month for long life UTH processed milk. Monthly raw supplies for the local market originate predominately from a contribution of 1, 3 million litres by Namibia Dairies’ own ! Aimab Super Farm near Mariental and 820 000 litres from the milk delivery quotas of the independent commercial dairy producers. Namibian Dairies currently has an estimated 50 percent share of the local commercial dairy product market.