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Dairy Industry Collapsing Due To Power Shortages

07 March 2011

TANZANIA - The ongoing power shortage has hit dairy milk collections resulting in a loss of billions of shillings by processors and farmers, and the gradual collapse of the industry.

“We are facing shortages of milk for processing because of the prevailing power shortages. We are not collecting as much milk as we used to,” Tanga Fresh executive director Hussein Alnoor told The Guardian in an interview.

“This is a major hindrance to the milk sector. In the collection of milk we are sometimes forced to use generators, which are not very effective as they can operate for only a few hours,” he said.

Mr Alnoor said under the prevailing circumstances it would be impossible for milk processors to meet the country’s milk demand.

“The average collection of a milk processing factory is currently estimated at 30,000 litres a day, which is too little for the country even if all the industries were to collect the same amount,” he said.

He said the price of imported milk is cheaper compared to that of locally processed milk, adding that in Kenya, liquids are zero rated while in Tanzania they are duty exempted.

“If we cannot meet the demands of Dar es Salaam alone, how can we satisfy the country’s demand?” he asked.

According to Mr Alnoor, both Uganda and Kenya have carried out more and deeper policy and regulatory framework reforms through stronger private sector organisations (PSO) and dynamic public private partnerships (PPP).

Musoma Dairy Limited managing director Dr Gideon Mazara concurred with Alnoor on the effects of power shortage, but called on the government to regulate the imported products in order to protect local industries.

“The imported products are sold at a lower price than the locally produced ones, undermining the market. We urge the government to review the policies to be able to regulate the market,” he said.

Responding to the complaints in a telephone interview from China, Industry, Trade and Marketing deputy Minister Lazaro Nyalandu assured the investors that the power crisis will end soon.

“The government is working on a short term programme to have the industries and homes powered,” he said.

He said there were also medium and long term strategies which the government was working on to end the problem.

On helping farmers to access reliable markets, the minister said currently, the Ministry of Communication, Science and Technology is waging a campaign of: ‘Buy local products’ aimed at assisting local companies to secure more customers.

According to a draft report by milk processors on improving competitiveness of the dairy industry, lack of enforcement of regulations vs informal preparations has been cited as a major cause.

The report says that experience in other countries has shown that regulatory interventions alone cannot eliminate the sale of unprocessed milk.

“It appears that this has to go hand in hand with risks involved in the consumption of raw milk,” the draft report says.

Further, it says that the price of processed milk has to come down significantly to make it affordable to low income consumers, who are otherwise unwilling to pay for the costs of pasteurisation and packaging.

The country’s dairy processing industry has shrunk by more than 80 per cent over the last 15 years, the report says, adding that it has become uncompetitive on the domestic market (narrow and expensive range of products) and is not export oriented.

At least, thirteen dairy plants have gone out of business and the total amount of milk processed per day is only 60,000 litres (down from 400,000 litres), the report concludes.

TheCattleSite News Desk



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