Government’s inadequate support of dairy farmers the cause of crisis

20 July 2018

The government urgently needs to pay attention to the crisis faced by South African dairy farmers. The drastic decrease in the number of dairy farmers in the Free State alone (929 dairy farmers in 2009 to only 186 in 2018) should set alarm bells ringing for the national Department of Agriculture.

The main cause of the crisis faced by local dairy producers is the fact that the government offers them very little support. Drought relief funding for farmers in drought-stricken areas is inadequate – if farmers benefit from it at all. Furthermore, unlike their American and European peers, the local producers are offered no support in the form of subsidies, empowerment and other resources.

The fact that milk and other dairy products are being imported contributes to the immense pressure on the local market. Local dairy producers are being paid less than market value for their products, because it is cheaper to import and later reconstitute dairy and other related products like butter, yoghurt, etc.

The retail sector, like supermarkets, prefer these imported products because they are cheaper, but they are not of the same quality as locally produced dairy products.

The government is not offering local dairy producers the protection they need in the form of import tariffs on the various dairy products. For example, there are no import tariffs levied on long life milk and even though there was a moderate oversupply of milk in the country, nearly 431 million litres of milk were imported just during the course of the last year.

The government must stimulate and support the local production of dairy. The agricultural sector creates thousands of job opportunities every year. Because dairy farming is less mechanised than crop farming, it is inherently labour intensive. Thousands of job opportunities are thus lost every year as dairies close down due to the immense external pressure.

The national Department of Agriculture must make import tariffs a priority and must compel the retail sector to buy a fixed quota of locally produced dairy products before they are allowed to buy and sell imported products.

The dairy industry in South Africa makes a great contribution to domestic production and job creation. It must, therefore, be stimulated and protected.

Issued by Wouter Wessels, FF Plus National Spokesperson: Agriculture, 20 July 2018