Milk money drying up
by
Fri May 06 2016
The collapse of milk production in T&T over the last 15 years should be blamed on the low prices that Nestle pays for milk from local farmers, says Chris Medford, president of the Cattle Farmers' Association of T&T."Between 2001 and December of 2015, T&T's milk production dropped from 13 million kg per year to under three million last year. The main problem for this is the cheap price of milk that farmers sell. Farmers cannot continue producing milk at a loss. It means farmers are working for free," Medford told the Business Guardian by phone last Friday.
He said, in 1982, farmers received 95 cents from Nestle for a litre of milk and 90 cents from the State, a total of $1.85.
Today, in 2016,
Nestle pays farmers $2.35 and the State pays $1.50, a base price of $3.85 per litre of milk.He noted that one litre of milk weighs one kilogramme.
"The year 1982 was the last time farmers sold their milk at a profit. Now, in 2016, the base price is $3.85.
The State only gives a subsidy if a farmer sells to Nestle and no one else. If you sell your milk to Ramsaran Dairy Products, who is a processor, you will not get a subsidy. So, in 34 years, the total increase that farmers got from Nestle for the milk they sell is $2 per litre," he said.
He said the cost of producing a litre of milk far exceeds what they are selling the milk for.
"Everything else is going up. In 1982, you got a worker to work for $50 a day. Today, no one wants to work on the dairy farms, and if a farmer is lucky to find someone, the least the scamps are asking for is $250 daily. But farming cannot pay that," he said.
In 2006, the Ministry of Agriculture did a survey and the average price then to produce a litre of milk was about $4.60.
In 2006, farmers were getting $3 per litre and he said it shows how far farmers were and are still behind.
Medford said he no longer sells milk to Nestl� as he would have gone "bankrupt" by now.He last sold milk to Nestle in 2008. He now sells to other businesses which, he said, pays "considerably more" for his milk.
"I have found a new, niche market for my milk. My farm is in Carlsen Field and I have been saying for years that milk production is declining and being replaced by imported milk. Recently, we had Moo Milk from Germany. I now sell to the foreign embassies, restaurants from India, the Hilton Hotel and others in the private sector," he said.
No government help
Apart from the collapse of milk production, Medford also said that two thirds of the diary farms are now out of business.
He said the concentration of farms are in Carlsen field, Wallerfield and Valencia.
"We have lost the dairy producing farms, even though the lands are there. We have also lost two thirds of the dairy cattle. We have also lost farmers."
He blames previous governments for allowing the crisis that exists in the diary farming sector today.
"The government says if a farmer plants grass, he gets a subsidy. If he fences, he gets a subsidy. If he repairs his pen, he gets a subsidy. Since the 1990s, the State has not renewed leases for farmers and you need the leases to qualify for the subsidies. Some people from the Ministry of Agriculture were on my farm two weeks ago and I pointed it out to them. I buy vehicles, I fence, I plough and I have never got one cent in incentives from the Government. I now own 70 cows but, back in the day, I owned almost 300," he said.
He also said Nestle has not been helpful to farmers."Nestle took the position, if farmers are not happy with their price, we can go other places."
Reacting to the news that the Government wants to help farmers produce their own milk, he scoffed and laughed it off calling it a "big joke."
He said the solution for farmers is for the Government to ensure the selling price is more than the price of production.
"Nestle is making a horrendous profit off farmers. They are paying farmers little and are making a pound and a crown. This has to change."
Minister of Agriculture
In an email to the Business Guardian on Monday, Clarence Rambharat, Minister of Agriculture, said
the country has had a long relationship with Nestl� and has benefitted from its technical assistance.However, he said farmers are unhappy with the price while Nestle has said the price it pays to local farmers is among the highest it pays anywhere in the world.
He repeated the remarks he made at an economic forum at the University of the West Indies (UWI), St Augustine in April.
"The dairy farmers have to make a decision whether they will continue to sell to Nestle or whether they will look for their own markets, including value added opportunities. It is a decision that has to be made."
He added: "At the same time I made the point that the last administration imported two pasteurisation plants, one of which is already installed in Longdenville and the other is earmarked for Wallerfield. These, if commissioned, may provide farmers with options, but the decision on how these plants are to be used is a decision the ministry still has to make, after discussions with the dairy farmers."
Ideal price
Dr Norell London, a dairy farmer and a retired professor of sociology at the University of Western Ontario, believes it is necessary to raise the price of milk famers sell to Nestle.
London has been in dairy farming for over 40 years and supports the views of the president of the Cattle Farmers' Association that the price of milk needs to be raised.
"The inputs are costly. The feed, the chemicals, labour and posts for fencing are all expensive. The Government owns the posts and we have to pay them an exorbitant price for the posts. One post costs $50 for a poor farmer," he told the Business Guardian last Friday by phone.
London, who owns 44 cows, has his farm in Wallerfield. He said labour is also expensive.
"I pay my three workers $5,000 monthly for each. They have been with me for over 10 years."
He thinks that the "reasonable" price farmers should be selling a kilogramme of milk for is $6.50.
"Many farmers are unhappy and are only in the business because they cannot do better. "
He said dairy farming can be profitable but the Government must consider the economies of scale and other factors.
"To survive and make a decent living, a farmer needs to produce about 300 kg daily. That means a milking herd of about 30. Then there is the spin off cost of feed right now," he said.
Happy customer
Lucy Torres, dairy farm owner in Turere, Sangre Grande, spoke to the Business Guardian last Thursday.
She has 49 cows and sells milk daily to Nestle and has been doing business with the company for 42 years.
She sells 120 kg of milk to Nestle daily and she estimates it costs her about $2,500 monthly to run her farm.
"I only buy about 10 bags of feed from Nestle for the week," she said.
Unlike some other farmers, she is happy with her relationship with Nestle.
"Some farmers might not want to say it but we are in a very good relationship. Nestle is a sure market and every day they take your milk. Every day the trucks come here."
She spoke about Nestle's artificial insemination (AI) programme.
"If you have a cow in heat, the person who works with Nestle will come and inseminate the cow. They used to charge $100 for those who were not in the programme but for those in the programme, they cost would be $50. Because of the change in the economy, Nestle gives you that free. To import the bull semen from foreign countries is not cheap."
She considers Nestle to be an important partner of the dairy farming community.
"Nestle is not an enemy. You can tie a cow in the field to eat grass, but you cannot make it eat. Some of the farmers, all they want is more money. I do not have a problem with Nestle," she said.
About Nestle
Nestle had provided information to the Business Guardian newspaper in March and, according to that information, it began milk production in T&T in 1962.
Nestle also indicated they provide support to the country's dairy farmers in the areas of farmer training and seminars.
There is a dairy development programme which aims to help dairy farmers develop sustainable and profitable milk production in a shared-value relationship. This programme was initiated on 22 farms with an average farm size of 22 cows in 2009 and continues today.
There is also the forage and feed project.
"The Mulato Grass Project, initiated in 2006, helped farmers establish new pastures with this improved grass. A parallel supplemental feed project–undertaken in partnership with National Feed Mills–established a 16 per cent dairy ration specifically for suppliers to Nestle's factory. Together, these two projects have increased cow productivity from 7.5kg/cow per day in 2010 to 10.3kg/cow per day in 2012, while significantly reducing the amount of feed used to produce 100 kg of milk from 66 kg to 44 kg. The result is direct on-farm savings which have increased farmers' productivity and profitability."
Nestle also referred to the farm management project.
"Nestle's agricultural services department works closely with farmers to implement improved farm management tools and techniques. We help farmers with data collection, analysis and feedback for short-and medium-term planning. Farmers receive a detailed monthly report highlighting key performance indicators over a four-month period, which shows them the true profitability of their operations and highlights high costs and inefficiencies."
https://www.guardian.co.tt/article-6.2. ... 98d224a10b