An increase of between 10% and 20% in milk prices for Free State farmers is needed for them to stay in business, the local milk producers’ organisation said on Friday.
”There is great anxiety among Free State milk farmers about the ever-increasing input costs and the fact that milk prices have not changed since April 2005,” chairperson Koos Pienaar said.
”In March 2005, milk prices decreased about 20 cents a litre, which means farmers must pay 2006 input costs with milk prices they received in 2003/04.”
Pienaar said due to this, many farmers are leaving the industry while there is no hope of smaller producers surviving the line of business.
This follows a recent meeting of 200 dairy farmers in the eastern Free State where farmers urged milk buyers to adjust their prices.
According to Pienaar, local farmers get on average about R1,72 per litre for their milk, excluding transport costs.
”The share of what the consumer pays for milk and what farmers receive gets smaller,” said Pienaar adding that producers are carrying all the risks of the industry.
Pienaar also warned milk buyers not to close milk routes, including ”too small” producers.
”The Free State milk producers’ organisation is trying its level best to establish upcoming farmers, but buyers are closing those routes because producers are too small.”
The organisation said this could lead to an embarrassing situation for buyers in terms of government policy and black economic empowerment. — Sapa