TANZANIA – The government of Tanzania has introduced new regulations which will require milk importers to pay thirteen times more in milk import fees, reports the Citizen.
According to stakeholders, the move which equates to total ban will hurt the dairy industry which relies on imported milk to manufacture some of its products.
The newly signed Animal Diseases and Animal Products Movement Control Regulations dictate US$0.88 on milk import fees, a 1,233% increase from US$0.066 charged before.
The new regulations came into effect on October 1 after being signed by Livestock and Fisheries minister Luhaga Mpina in August.
Milk importers have convened a meeting to discuss way forward given the new operating environment that will make their products very expensive in the market.
Speaking on the new rules Kariras Alando, country director Woodland Dairy, South Africa based distributor of First Choice milk said: “These are not just regulations, but a total ban.
It’s not possible for fees to rise at that rate… our products will no longer penetrate the market due to high prices.”
“Business is already tough and these regulations are making things worse.”
Industry players also said that the move may discourage the consumption of milk and other dairy products in Tanzania.
Importers versus local producers
While milk importers are unhappy with the new fees, local processors see the move as an opportunity for them to flourish.
The country manager of Kenya’s New KCC in Tanzania, Mr Marigo Chacha, said the impact will hurt suppliers who have invested a lot and created jobs.
“Tanzania imports butter and ghee from other countries as there is no local processing.
If other countries decide to restrict our products through moves like this then it can spark a trade war,” he said.
On the other hand, the managing director of Iringa-based Asas Dairies Ltd, Mr Fuad Jaffer said: “We really congratulate the government for this decision which will not only attract investors to Tanzania but also benefit local livestock keepers.
It’s my hope that there will be local powdered milk processors soon.”
Milk production stands at 2.4 billion litres a year against a consumption rate of 47 litres per capita per year.
Local milk plants are capable of processing 700,000 litres daily but are working at only 40% of their installed capacity due to a shortage of milk, among other reasons.
The yield is not enough to enable the country achieve a 200 liter per capita consumption of the dairy product a year as recommended by the UN Food and Agricultural Organisation (FAO).
Data indicates that Tanzania spends over US$72.19 million to import milk annually in a bid to fill the gap.