TUNISIA – The Government of Tunisia has scrapped taxes on powdered milk and butter imports in an effort to enhance the supply of the commodities in the local dairy market in order to prevent a supply shortage.
The dairy subsector in Tunisia has been in an uphill battle since the start of the year 2022 with daily production dropping to 1.4 million litres against an average consumption rate of 1.8 million litres per day according to data from the Tunisian Union of Agriculture and Fisheries (UTAP).
The public body also indicates that the stock of the strategic reserve is currently at a level of 5 million litres against a stock of 40 million litres in the same period a year earlier.
This amount is anticipated to be barely sufficient to supply the market for the next two and a half months.
The decline can be directly linked to the rising cost of production. According to UTAP, The production cost of a litre is more than 1.6 dinars (US$0.53) while the price given to the producer is 1.14 dinars (US$0.36).
As a result, farmers are finding it more difficult to make ends meet and they are demanding an increase in the selling price of milk to continue producing. Many are taking the option of selling their livestock or sending them to slaughterhouses.
Tunisian dairy farmer Maher Gizmir has sold nearly half his cows this year and reduced his daily output by 85%, adding to a shortage of milk around the country as a cash-strapped government wrestles with inflation.
In an interview with Reuters, Gizmir says he can no longer afford to produce milk at the state-mandated purchase price given his rising outlay on fodder and other goods and services.
Tunisia, eager to keep prices down for ordinary citizens but also bound by promises to reduce subsidies as it seeks a bailout from the International Monetary Fund, has few options.
The recent decision to scrap import duty is seen as one of the few options that the country has to support the supply of the local market so as to prevent a shortage in supply.
Industry experts are of the opinion that the dairy subsector is on the brink of an unprecedented crisis, economists have also issued a warning of the potential collapse of not only the dairy subsector but the livestock sector as a whole.
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