By Felix Oketcho
Diary processors under their umbrella organisation, Uganda Dairy Processors Association (UDPA) have asked members of Parliament on East Africa Community Affairs Committee to expedite the process of harmonising dairy export trade with member states of the East Africa Community to promote fairness.
“UDPA would wish that the forum immediately engage with our neighbouring countries who have introduced both tariff and non-tarrif barriers of trade in one case from Mid 2018 and another from 1 Jan 2020, so that trade can continue the way it is supposed to be under the EAC framework.
Kenya reduced the number of import permits issued by the Kenya Dairy Board by over 90% thus limiting Ugandan dairy products access to Kenya to just 10% to what it was in 2019 and Tanzania introduced a 2000tshs levy on every kg of milk crossing the board since mid-2018,” Bijoy Varghese General Manager of Pearl Dairy Milk said.
He says non-compliance to East African Community framework by member nations has impacted negatively Uganda’s dairy sector.
According to Bijoy Uganda has been on the growth curve with dairy produce increasing year in year in the last two decades the overall milk production has gone from 700million litres in 2000 to 2.78billion litres in the financial year 2020 but currently Uganda is on decking trend.
“Uganda lost over 200million dollars in exports in 2020 and 2021 due to unfair trade practices within East Africa Community. This declining state of thriving dairy industry is attributed to protectionist traits of East Africa Community nations hurting indigenous sectors of several countries that can support in bridging deficits and increase the income level at grass route level,” Bijoy said.
He suggested that member states should lift non-tariff regulatory barriers currently hindering dairy exports to Kenya.
Bijoy further demands lifting tariff barriers introduced by Tanzania to facilitate increased trade from Uganda especially by removing import duty of Tanzania 2000per kg.
Although Dairy exports have continued to grow resulting in an increase in foreign exchange from $139.5 million in 2019 and to $205 million in 2020, Minister of Agriculture, Frank Tumwebaze urged dairy farmers to produce quality milk products to feed the new secured markets.
Tumwebaze cautioned dairy farmers to stop worrying about the market as the government has secured deals in countries like Algeria.
“The question of the market will be resolved as we go along. It is already getting sorted, manage quality standards, we shall sell whatever markets open and they are selling. What is important is for the farmers to get it right, manage their cost of production,” he said.
In a recent inauguration of the new board of directors of the Dairy Development Authority, Tumwebaze said the dairy industry is now the third-largest agricultural foreign exchange income earner after coffee and fish.
Tumwebaze said the industry has grown tremendously and has maintained a steady growth rate of 3% per annum for a decade.
He said it is the second-fastest-growing dairy industry in Africa second to South Africa and the benefits of this growth are glaring.
Tumwebaze however tasked the new board of directors to make policies that ensure that the farmers get to grow and enjoy what they do and not abandon dairy farming.
“The DDA board should provide a concept paper on the constraints and potential solutions [to the dairy industry] to be presented to cabinet,” he said, calling upon the government agencies to balance between regulation and enforcement.
Uganda’s revenue from the export of dairy products has risen from $131.5m (Shs 480bn) in 2018 to $205m ( Shs 750bn) in 2020 according to records from the Dairy Development Authority (DDA).
DDA is the government agency mandated to develop and regulate the dairy industry and has a core objective to provide proper coordination and efficient implementation of all government policies.
But Dr. Michael Kansiime, the executive director of DDA noted that dairy exports mainly go to regional markets of UAE, Syria, Japan, Oman, USA, Nepal and Bangladesh. He attributed this to increased compliance with Uganda’s milk and milk products.
He explained that the country’s overall value of marketed milk stands at approximately $850 million (Shs 3.1 trillion), which is 80.2% of the total milk produced.
“The sector is one of the leading agricultural commodity export income earners second to coffee and slowly edging its way to be the leading agricultural export earner in the country,” he noted.
Currently, there are 483 milk collection centres countrywide with a total installed capacity of 1,938,522.