Over the past year, South Africa’s milk producers have been assailed by challenges, but there is renewed hope for the primary dairy industry’s future.
Wars in faraway countries, protectionism in developed economies, domestic stagflation and foot-and-mouth disease in the Eastern Cape have directly and indirectly affected South Africa’s primary dairy industry in the past year.
And according to Luke Gibbs, who chairs the Milk Producers’ Organisation (MPO) and farms in KwaZulu-Natal’s Normandien district, grassroots dairy farmers have felt the impact.
During his report to the MPO’s 2024 annual meeting near Nottingham Road in KZN, Gibbs said a silver lining was that the election had “ushered in a very different and more positive political architecture”.
He added: “The government of national unity (GNU) has laid the foundation for a greater degree of rationality and pragmatism in policy formulation.
“As the GNU gains momentum, the markets have signalled cautious optimism about the future of South Africa, and this is positive for investment, economic growth, and the hope that we will be able to start clawing back the economic devastation.”
Gibbs said positive developments from the GNU had already given dairy farmers hope. They included the appointment of John Steenhuisen as Minister of Agriculture and the way he moved quickly to bring the Eastern Cape’s foot-and-mouth disease outbreak largely under control.
The MPO had a long wish list for the GNU, said Gibbs, and it had the potential to benefit not only the primary dairy sector but the entire nation. One issue was the need to fix the “disastrous state” of municipalities. “We cannot overstate the profound impact this has had in our rural areas, where the bulk of our milk production occurs.”
The MPO is also worried about rising electricity costs, a proposed national minimum wage that “makes no economic sense” and above-inflation increases to administered prices like fuel.
In the private sector, Gibbs said, “we remain concerned at the unrelenting bombardment of consumers by pseudo-products under the banners of so-called ‘cheese’ and ‘butter’ which are actually not, and the increase in ‘dairy snacks’ posing as healthy alternatives that contain very little dairy. These are all taking market-share from good, wholesome, real food produced by our dairy farmers.”
The MPO is also aggrieved by local retailers importing other countries’ surplus dairy products at subsidised prices. These compete “unfairly” with South Africa’s primary milk producers, especially during local production’s spring flush. By allowing this to happen, South Africa was “exporting our wealth and importing poverty”, said Gibbs.
Although South Africa’s milk production has increased over the past five years, the number of registered milk producers has decreased from 1 365 to 882. “The viability of our industry as a whole will only be achieved through a balance in the relationship between the farmers, processors and retailers,” said Gibbs.
“For our dairy producers to overcome the many challenges we face, we need people to step into the arena and ‘do’. We certainly need fewer people outside the arena throwing stones of negativity and criticism without ‘doing’ themselves.”
