Spoilt for choice: A supermarket shelf in Nairobi. Photo/FILE
Milk processors in Tanzania’s nascent diary industry want the government to protect them against imported milk and lower taxes to prevent the industry from collapsing.
They say the industry could generate 10 times the tax revenue currently collected from imported milk products.
The sector, they say, is facing a bleak future as the challenges mount, chief among them being limited government protection, drought, external competition, low milk consumption and high taxes.
Mboka Mwanitu, executive secretary of the Tanzania Milk Processors Association, told The EastAfrican in Dar es Salaam that despite the organisation’s meeting with Members of Parliament and Prime Minister Mizingo Pinda last year, their concerns have not been addressed.
Ms Mwanitu explained that currently the industry is facing a milk shortage due to severe drought that hit many parts of the country last year, a problem compounded by the low number of collection centres.
“If you ask the government, they will tell you we are working on the matter but I don’t think they are doing so,” she said.
She added that the government waived taxes on processing machinery and packaging materials in 2007/8 but reinstated the taxes in this fiscal year.
The association, with about 120 members, is processing 90,000 litres of milk a day.
Gideon Mazara, managing director of Musoma Diary Ltd, told The EastAfrican from Musoma that the plant had cut production from 120,000 litres to 10,000 litres a day due to uncontrolled importation of milk from Kenya, forcing producers to pour milk away.
Dr Mazara said the firm is now working less than a shift a day, having retained just 40 workers out of a total workforce of 210, as the rest have been retrenched due to bleak prospects of the industry in Tanzania. The firm is producing ultra-heat treated (UHT) milk.
According to Dr Mazara, the Kenyan Diary Board is holding milk importation from Tanzania down to a mere 10,000 litres a day while one million litres are entering Tanzania from Nairobi every day.
While Musoma Diary cuts production, Tanga Fresh Ltd mid-last year invested $4.5 million in a new milk processing plant that increased its capacity to process raw milk from 20,000 to 50,000 litres a day.
The investment includes upgrading collection centres to improve milk quality, a new Dairy Farmers Information System to boost production levels per cow and a partnership with other processors to increase the number and quality of dairy cows in the area.
James Wanyancha, Deputy Minister for Livestock and Fisheries Development, said in Dar es Salaam last week: “We are looking to remove any obstacle facing the industry to harmonise not only taxes but competition”.
He said Tanzania has already imposed stiff taxes to limit importation of milk powder, on the one hand, and on the other, lowered other taxes to give milk processors a boost.
For instance, the government increased import duty rate on yoghurt and other buttermilk from 25 per cent to 60 per cent to protect the dairy sector from competition arising from importation of these products.
In this fiscal year, the government has exempted VAT on heat insulated milk cooling tanks and aluminium jerricans used for storage and collection of milk in the dairy industry.
Tanzania has over 22 milk processing firms but production has been dwindling.
In 2005/2006, the plants produced 150,000 litres of milk while during 2006/2007 only 56,580 litres were produced, improving slightly in 2007/2008 to reach 65,000 litres.
In 2008/2009, the plants produced 88,940 litres while three firms shut down — Royal Dairies, Tommy Dairies and Azania Dairies.
