NATIONAL ASSOCIATION OF DAIRY FARMERS
REPORT TO CONGRESS 2009
Welcome to the first combined commodities AGM. I hope the format works out well and that everyone enjoys themselves, has time to relax and learns something. The idea is that as well as having our usual NADF AGM we will see the crops and CPA associations reformed and revitalized here at Troutbeck. This year my father passed away as did Mr Odendaal from Bulawayo who played a big part in Zimbabwe’s dairy industry. It also shocked and saddened me to learn of the murder of Bob Vaughn Evans last week. May we please stand for a moments silence to commemorate them. A special welcome to Farmers, CFU, EU, sponsors and the service industry. Last year we were in Kariba and our biggest challenge was the Zimbabwe dollar. This year we are in Nyanga and our biggest challenge is the US dollar. So I guess you can say a lot and nothing has changed. Before I go into my report I must make mention of the unacceptable situation on many farms where farmers still have no legal right to their land and are subject to harassment by thugs with little help from the police. Our unity government has not yet stopped the jambanjes and therefore not created the environment for farmers to rebuild and feed this nation. We have again for the tenth year running, lost productive farmers to this madness. As NADF I can say things have change. Instead of chasing milk price every day we are now looking at servicing the farmers with extension and other services. Tours to all the regions have continued this year with training and vet services being carried out. Lobbying is obviously still a big part but until we have a working Government and a Ministry with resources this is limited. A lot of our time has been spent on trying to control the flow of imported milk products into the country. While I am all for competition we must insure that dumped product does not find its way into the country and thereby undercutting our recovering industry. The SADAC trade agreements make it very easy for product produced regionally to be imported duty free. Despite this we have documentation proving that there are huge amounts of product coming in without the required import permits. We need to establish why this is. LMAC has been tasked by the Ministry of Agriculture to vet applications before they issue import permits. In doing this we look at a number of factors like: Can this product be sourced locally? Does it come from an export approved processor? Expiry dates? Price to insure it is not dumped. Recently we have withdrawn support for an importer who is delaying payment to local suppliers. It is important to note however that we do not have the final say but only make recommendation to the Ministry of Agriculture. While it is important to keep abreast of imports and exports government and industry must have learnt by now that that it is impossible to control the market. Natural market forces rule in the end. My personal opinion and that of some others in the industry is that a reasonable import duty of 20% be put on finished products and no duty be charged on raw materials for manufacture to boost local manufacture. This 20% duty could be charged within rules of the SADAC trade agreements if we have our industry classified as an infant industry. We may not be infant by age but definitely by size. The last growing season was very good for maize and grass in many areas. The east had a very late start to the season but generally managed to conserve enough forage for the winter. As dairy farmers this year we have had to adapt once again to a new playing field with the Zimbabwe dollar falling away. With this ASPEF and any other form of cheap money has also disappeared. The positive side to this is that we can once again budget and look at improving our operations based on management accounts. Fierce competition between stock feed companies has seen prices coming down significantly and availability has improved. However we have seen other running costs sky rocketing. Labor minimums have gone from ridiculously low levels to around forty dollars a month. Power, phones, tax and fertilizer have gone from not even showing on your accounts to major bills. I find it very hard to understand how farmers are able to make ends meet with the average milk price at around 37c. As NADF we are trying to make this point to the processors but at the end of the day we have to look at our own operations and ensure we are efficient. Maybe the way we have always done it is not the best way. It’s the overheads that are a killer, the real cost of home mixing has shocked me with tractor and labour costs so high. As farmers the only effect the unity government has had on us is that we as the formal sector now have to carry the nation through tax. There is too little industry left, to sustain this. The horizon has also changed on the milk processors front with having one dominant company to now having four large players and several smaller ones. This I believe is a healthier situation where we now see real competition for our milk. We actually have a variance in the basic price being paid for milk. For the first time in history even the Chipinge farmers have an option as to who to sell their milk to. Our raw milk price is now competitive regionally and internationally. With volumes less than 10% of what we used to produce there is obviously demand for it. All processors are however putting more emphasis on quality and this is starting to be evident in the bonus penalty schemes. With them having to compete with imported product they must get quality milk to make decent products. Stabex 95 is now a reality, with NADF having been awarded two programs to run. These are the vaccine and marketing support for dairy promotion. We are in full swing with these, with new staff at head office and centre administrators already in place. The first vaccines will be available within the next month or so to all livestock farmers on non contested land. The Dairy development program will see us working with seven small holder projects. Our aim is to boost their milk production and improve the running and administration of the centers. It is a credit to us all as members of NADF and to Rob in particular that we have been seen by the EU as an organization that can handle these projects. In conclusion I would like to bid you all welcome to the real world. This is it! Where the efficient producers survive and the rest do not. NADF’s drive must be to do all we can to help our members get better at what they do and help identify competitive advantages. From our government we need clear and effective polices to rebuild industry and boost production. The two most important being security of tenure so we can get investment and borrow money and the rule of law that is fair to all. Thank you Ajs Kirk(Chairman)07 July 2009