Local dairy producers groan over low tariff on imported milk
Dairy producers in Nigeria have lamented what they describe as poor market for their products and the inability by the Federal Government to tackle the influx of foreign dairy products into the country.
The local producers told Daily Trust that despite efforts of organised dairy producers and processors in various parts of the country, to promote the industry, the Federal Ministry of Finance maintained the import tariff for dairy products at five per cent.
A survey around Abuja shows that a litre of locally made yoghurt like Farm Pride, Nagari and L&Z brands go for N1,000, while imported products like Hollandia are cheaper at about N500.
The producers said with the low tariff, prices of imported dairy products might further crash at the detriment of local products which was yet to get more support from the government.
An industry operator told our reporters that while government reduced the tariff for importing foreign dairy products; tariff for importing dairy processing equipment was still high at 25 per cent except the ministry issues a waiver.
However, Daily Trust checks revealed that in the Common External Tariff (CET) Act No. 4 of the Nigeria Customs Service (NCS) there is zero Import Duty (ID) and Value Added Tax (VAT) for importing milking machines (coded 8434.1000.00) but there is five per cent duty for importing parts of the milking machines and dairy machinery (8434.9000.00).
The concentrated natural milk (coded 0404.9000.00) attracts five per cent duty and VAT; sweetened solid milk and cream concentrate for pharmaceuticals and nonpharmaceuticals are at five per cent duty and VAT respectively. Some of the local dairy producers claimed these were earlier at 10 per cent before the review.
Bulk import of liquid milk/cream is at 10 per cent duty and five per cent VAT, butter milk (powder) and curdled milk are both at five per cent duty and VAT.
He said the effect of this was that issues of farmers and herders clashes might be difficult to resolve. “Once we are not on the part of developing the dairy industry, then we are not serious or committed to fighting the menace of farmers and herdsmen clashes, we are only paying lip service,” the operator said.
He said herdsmen and dairy products producers had organised themselves into colonies and ranches in Kano State and did not have issues with farmers but still did not have markets for their products because government lacked deliberate policies to promote the market.
“I have seen a lot of initiatives like colonies and ranches being initiated by governments, but even with these, there is no market for the dairy products. The tariff review is done in favour of foreign dairy producers and so we can never break even and it won’t solve the herdsmen and farmers crises economically. Once that fails, it means that political or religious solutions may not also work for it,” he explained.
Another local producer noted that the clashes were economic problems that needed economic solutions. “We as local producers are concerned that our businesses are being killed by the government and we are at risk of getting our business tainted and a liability to the nation rather than as it is everywhere in the world.”
He said the model of dairy industry operated in Kano State was what the Federal Ministry of Agriculture and Rural Development took as pilot for the cattle colony to replicate it.
On what government should do, the producers said, “Government can decide to grade the tariff from five per cent to 60 per cent and say those who import foreign dairy products pay about 60 per cent tariff so that it could be discouraged.
“However, for those processor who are importing and are willing to do backward integration to boost local production, they can be allowed to pay five per cent import tariff because they are stimulating local production. This is to incentive direct foreign investment and local investments as well. But as it is today, there is dis-incentive for local dairy industries today,” he advised.
The Customs PRO, Mr Joseph Attah, said the service does not make policies which was for the Federal Ministry of Finance. He could not immediately confirm that as he directed our reporter to the ministry.
The Minister of Finance, Mrs. Kemi Adeosun, through her spokesman, Oluyinka Akintunde, responded to the several messages sent to her.
“Be informed that the 5% tariff has been in existence since 2015, three years now. It is not a new tariff and is only for Dry Powdered Milk. It doesn’t cover other diary products. The claim by local producers of high tariff 25% on importing tools is absolutely not true.”