You are coming in at a time when the world is struggling with Covid-19, and the dairy industry is not spared. What incentives has government put in place to assist processors, farmers and dairy traders to survive in the post-Covid-19 period?
Covid-19 has affected every sector and the dairy sector has not been spared. Animals must be milked, someone must transport the milk and it must be consumed.
Covid-19 destabilised the sector at consumption level because when people could not freely move to restaurants, consumption dropped.
Also when people cannot move abroad to sell our milk, that means consumption and foreign earnings have reduced. The only advantage is that the milk can be converted into products that have long shelf life like powdered milk.
Majority of our investors are converting the milk into powder which was sold when the government wanted it to feed Kampala families by the Covid-19 taskforce.
Covid-19 was felt when factories were unable to get money to pay farmers and their workers. But we are carrying out a study to assess the losses.
Uganda has the lowest milk consumption per capita, why?
Milk per capita consumption has since increased from 25 litres in 1986 to approximately 63 litres in 2018. Although per capita consumption is still below the World health Organisation recommendation of 200 litres of milk consumption annually; investments in the sector are credited for the boost in consumption.
After every 10 years, consumption should increase by 10 litres per capita but that will go hand-in hand with sensitising masses on the importance of milk consumption.
We are doing product innovation. This means we have different products. Traditionally, people knew milk is for tea, yoghurt and ghee but there are many more products that milk can be converted into, for instance, milk shakes, ice cream and many others.
Our is to encourage processors to develop products that people can take other than traditional products. There are people who are milk intolerant so let’s ferment it and when you take it, it is already digested.
DDA also wants to see more factories doing product fortification, for instance, the introduction of Vitamin C and D. We also want to encourage schools to add milk to their menu. By so doing, we shall increase the consumption per capita.
What are you doing to encourage the formal market (processors), which guarantees quality since the milk is pasteurised and processed?
DDA has a mandate of milk development. When we say milk has increased, our work is done; we stimulate milk production, we give people coolers, we do inspections.
Total Rural Milk Collection Centres are currently 483 with total collection capacity of 1.9 litres of milk.
There are 329 road milk tankers with total collection capacity of 2.16 million litres. Milk transportation has transformed over the years. There are currently 329 road milk tankers with total collection capacity of 2.16 million litres.
Part of my work is to find where the milk is and how to collect it. We also train farmers on how to get clean milk.
Barriers to free trade between Uganda and Kenya continue, with reports of certain brands like Lato having difficulties penetrating the Kenya market. How are you addressing this?
It is very unfortunate. One of the advantages of being in the EAC is to have regional markets expanded. But we have had incidences where nations have taken measures to protect their own market. We currently have a challenge of exporting to Kenya, Rwanda and Tanzania.
Tanzania and Kenya allow minimum that is very unfortunate because majority of these countries we trade with them for instance, from Tanzania we get 120 trucks of food stuff such as beans, rice and onions that come through Mutukula. I appeal to our neighbours in the spirit of good brotherhood to open up borders for trade instead of putting some non-tariff barriers.
If it is an issue of quality and standards, we can work on that and if its tax, let them impose and we shall pay the tax and continue exporting.
How have we been performing in dairy exports and imports?
Dairy exports increased from $130m in 2017 to $139m by 2019 and the export market mostly covers East Africa Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), South Africa Development countries (SADC).
Uganda also exported to United Arab Emirates (UAE), Nigeria, Oman, USA, Netherlands, France, Poland, Germany, Denmark, Turkey, Finland and Sweden Nepal, Bangladesh and Japan.
This is as a result of increased compliance of Uganda’s milk and milk products in both the regional and international markets.
Dairy imports included buttermilk, infant formula, assorted ice cream, cheese and dairy equipment and machinery.
Our supermarkets and shops are awash with imported powdered milk and baby formula for infants while our milk is sold at give-away prices. What is DDA doing to reduce these imports?
There are very many byproducts of milk that can go on the market. So far, we are making pasteurised milk. Previously, we used to constitute milk with imported powder. Now, we are processing our own milk.
We are sourcing for an investor for fortified products, baby formula and other alternative milks like casein.
The biggest challenge is budget constraints; the organisation is operating at 40 per cent capacity that means we need more staff. This also affect things like equipment. Right now, we should have mobile laboratory vans in the seven regions but we have only two. So we are not operating to capacity.
We currently get around Shs10b. Our desire is Shs25b. If we are to deliver quality milk and regulate effectively, this is quite far below what the industry is bringing into the country that is $139m (Shs515b) we hope to work with government to support this production.
People don’t understand the value of milk. About 70 per cent of our milk is consumed raw yet there are many diseases associated with milk like anthrax and brucella. If we have more processors to convert that milk, then we shall not have infections related to milk.
What are you planning to do in your first 100 days?
We are reorganising the DDA administration, improving staffing and equipment to increase efficiency. We are going to scale up the cottage industries in Uganda, and this means we are going to encourage people to add value to increase the shelf life of milk at the farm.
Our farmers will be trained to produce clean milk.
DDA also going to improve its capacity to regulate, accredit laboratories, increase mobile labs to reach more farmers. We are also going to develop our dairy institute into a training and incubation centre in Entebbe.
There is a milk processing firm trying to export unprocessed milk to Kenya but this has become a contentious issue. How are you going to handle that?
There is a policy against exporting raw materials. If you do, you will be exporting jobs, value, taxes, and income. The idea is to build capacity to process, these people will get jobs, pay taxes with income and their purchasing power will improve hence increased milk consumption.
We are trying to attract processors, others are employing over 2,000 people and the government is getting taxes.
The informal sector in dairy (hawking) continues to thrive, accounting for a bigger chunk of marketed milk in this country, despite challenges in milk quality.
Eighty per cent of the milk marketed at the farm is raw and only 20 per cent is processed.
The value of marketed milk has increased from $784m (Shs2.87 trillion) in 2017 to approximately $850 million (Shs3.1trillion) currently.
Currently, Uganda has 100 operational milk processing with processing capacity of 2.71 million litres in 2018 to 120 with total processing capacity of 2.72 million litres in 2019.
The increment is as the result of increased investment in dairy cottages that are striving to add value to the milk.