Marketing functions of the dairy industry seems to be
lagging behind despite of an increase in the number of smallholders’ dairy
farmers and expanding demand for milk in Tanzania.
The Director of Asas Dairies Limited, Fuad Abri told the
Guardian yesterday that marketing system for milk is not well organized
compared to other products, hence unfair competition for milk producers in the
country.
Asas Dairies Headquarters are in Iringa Municipality, Iringa
Region at the Suburbs of Kibwabwa Industrial area some three kilometers from
the Town Centre.
The installed dairy processing capacity is 18,250,000 liters
per annum, which translate into 50,000 liters per day. Due to inadequate supply
of raw fresh milk from dairy farmers and other sources, the actual current
dairy processing capacity is hardly 30 percent of the installed capacity, adding
that it is resulting in high per unit operational production costs.
Abri said the government should provide desirable environment
for the dairy market because dairy business environment is hostile to their
operations in the number of ways, including the system of taxation which is
still repressive and not business friendly.
He said that unfair and noncompetitive business practices in
the dairy industry which goes unchecked and unregulated by the appropriate
institutions.
By allowing the importation of cheap milk powder to be used
as an input or raw material in the production of reconstituted milk, hence,
negatively impacting on dairy farming in the country.
He noted that allowing importation of cheap dairy products
from abroad, only to be sold at higher retail prices in the domestic elite
market, and hence distorting the domestic dairy market.
“The government is yet to invest sufficiently in agro-dairy
industry, still maintain a low key in such a critical industrial sector and
giving unwanted advantage to foreign competitors, rendering the domestic dairy
industry noncompetitive,” he said.
He said his company for instance, is still facing the problem
of seasonal fluctuations in milk supplies from the dairy smallholder farmers,
as well as inconsistency in quality controls at farm level.
This is resulting in insufficient milk supplies to the
processing plant, which is forcing it to operate at under capacity utilization.
“The inconsistency in quality control in milk supplies from
smallholder farmers is big challenge because during dry season the milk
supplies is less at farmer level, ” he said.
However, the Director of Asas Dairies Limited, Fuad Abri
thanked the government for the efforts to supporting the dairy industry by
exempting value added tax (VAT) on milk products.
But, he urged the government not to reintroduce the VAT again
on the dairy industry as some speculations seem to suggest of recent, in order
to promote the domestic dairy industry against unfair foreign competition.
He said by so doing it will raise our milk per capita
consumption levels, which is currently stands at 44 liters per head per year,
against the World Health Organization (WHO) international per capita milk
consumption of 200 liters per year.
Abri advised the government through the Tanzania Dairy Board
(TDB) to groom and protect the dairy industry against unfair foreign completion
because the industry is at an infant stage.
He said that the government needs to collaborate with all
dairy stakeholders in the country by seeking views and advice on the best
dairy business practices, in order to improve our dairy export sector apart
from meeting domestic demand.
He concluded by saying that, sustainable development of dairy
industry in the country will require the full support of the government as a
matter priority; but also the resolve of all stakeholders in the country in a
collaborative approach; if we are to stand against global competition.
TDB is mandated to develop, regulate and promote the
dairy industry in Tanzania mainland. The Board promotes production,
collection, processing, marketing and consumption of quality milk and
dairy products by facilitating stakeholders' activities.
Last year, ASAS Dairies Ltd of Iringa Region for the second
consecutive years guide to the quality of milk production after the
appointment of the first prize winner for the best dairy industry in
Tanzania out of 30 participating companies.
The company has scoped the first prize of victory in 2014 in
the best factories in the dairy during the ‘DAIRY PROMOTION WEEK’ held
in Mara region where the special guest was the Minister for Livestock Development
and Fisheries.
Recently, the Development Partners Group visited the factory
and satisfied with the work done and director was very happy to be visited by such a heavy weighted delegation.
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