Namibia Dairies and the Dairy Producers Association of Namibia (DPA) have struck a deal that will see the producer price of milk increasing following negotiations that commenced on 6 May.
The agreement, signed recently, stipulates that producers of raw milk will, effective 01 July 2007, receive a higher base price per litre for milk delivered to Namibia Dairies. The adjustment forms part of an annual increase on raw milk and comes in the wake of an interim special relief given to milk producers during February 2007.

“We are proud to have reached a settlement that will ultimately strengthen and create a more independent local dairy industry by assisting local milk farmers to recover their production costs and encourage them to increase production,” said Des van Jaarsveld, Managing Director of Namibia Dairies.

Japie Engelbrecht (Chairperson, Dairy Producers Association of Namibia) and Des van Jaarsveld (Managing Director, Namibia Dairies).

At the same time, he also welcomed the Ministry of Trade and Industry’s introduction of an infant protection legislation which, effective 1 April 2007, authorises a 40% levy on imported long-life milk (UHT milk).
“This will assist to ensure that in future Namibia should be less exposed to milk shortages in South Africa and other parts of the world,” van Jaarsveld added.
He said a competitive local dairy industry was crucial to prevent an undesirable dependence on imported dairy products and further served to guarantee consumer choice and the industry’s ability to sustain jobs.
The local dairy industry has in the past absorbed the high input costs to avoid an impact on the consumers. This, van Jaarsveld said, can not be longer sustained citing unfavourable global macro-economic conditions ranging from soaring feed and transport costs as well as competition from heavily subsidised products from the European Union and other parts of the world, which have culminated in lesser regional and local production.
Namibian consumers can expect a seven to 10 percent price adjustment for local dairy products. Van Jaarsveld said his company had recommended sales prices urging the retailing industry to observe these where possible.
Japie Engelbrecht, Chairperson of DPA, said the parties had further agreed to review the price and cost situation on a quarterly basis to allow a shorter response time to major cost movements at producer and processor level.