Thursday, 17 September 2015

Land of Milk and Honey

(First appeared in New Era 19 August 2015)

During the 1980s I was told that Namibia (and specifically Rehoboth), is the land of milk and honey. I did not know at the time that the name “Rehoboth” had biblical significance. In the Bible, the story is told of Isaac that had dug two wells and the people of the communal area had argued both times on who had rights to use the water. When Isaac dug a third well there were no quarrels and he thus called it Rehoboth and said, "Now the Lord has given us room and we will flourish in the land".
The Rehoboth Gebiet had a medium-sized dairy industry and its own supply of milk from the Swartmodder dairy farm that had been set up with funding from the Rehoboth Development Corporation. Both these businesses flourished and was able to supply their immediate local market with enough dairy products at an affordable price. Shortly after Independence, the market forces were such that the largest dairy producer could apply economy of scales and provide milk products to the Rehoboth area at prices well below the production cost of the local producer. Unfortunately, this “price war” and other local factors led to the closing of the dairy farm and eventually the dairy as well.
There was considerable personal interest in this development as the grandfather of my youngest daughter was the founder of the Rehoboth Dairy. I took time to evaluate the impact of low cost imports to the area, high cost of imported inputs, the local labour situation as well as the long-term effects on the local economy after the closure of the local dairy industry.
The findings were clear: a) local jobs were lost; b) the price of the imports shot up immediately after the closure of the dairy; c) the local consumers only benefited for a short time; and d) the cows that were milk producers were slaughtered for meat.
Last week I was invited by the dairy farmers and industry to attend a meeting lamenting the over-supply of milk on the international market and how this has led to low cost imports flooding the Namibian market. This “dumping” has led to a “price war” where foreign producers sending dairy products to Namibia at a much cheaper price that what our local producers can manufacture at.
The meeting ended with a tour of the storage facilities where we found more than seven months of long life milk standing on the shelfs. Obviously, as consumers we welcome the extra few dollars in our pocket when buying cheap alien milk, but must also be cognisant of the fact that a local industry is in dire straits and needs saving.
Bluntly put: A Namibia cow, let us call her Daisy, is spending her life on a Namibian farm, being looked after by Namibian employees and producing milk for our Namibian homes. Daisy has been part of our lives and would quite willingly continue to share her milk with us but it would mean we as Namibian consumers would have to dig deeper in our pockets for the privilege of keeping Daisy alive, keeping Namibian jobs, and, in the long-term, ensuring we have a Namibian industry that can supply us with this staple product.
As the writer for Consumer Court, I pledge to purchase Namibian milk at around the N$ 17.00 price even while price of alien milk is cheaper. In the short term it will cost me more, but from experience we had better put Namibia first or face the same losses of the Rehoboth area when the dairy industry closed there.

(The words “dumping” and “price war” are in inverted commas as they might not meet the criteria as applied under World Trade Organisation rules.)

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