Covid-19 cost dairy sector Tk4000 crore in April-May

The financial impact of the coronavirus crisis on the country's dairy sector has been estimated to have cost Tk4,000 crore during the April-May period.

Dairy farmers could not sell a good quantity of their milk production in the two months since there was a countrywide shutdown to contain the coronavirus spread, according to the Bangladesh Dairy Development Forum (BDDF).

At an online press conference Thursday, BDDF General Secretary Dr KBM Saiful Islam demanded a government stimulus package for the sector to cushion the virus fallout.

"The government should put together at least a Tk5,000 crore stimulus package from which farmers can manage collateral free loans to get back on their feet," he said.

According to the Dairy Development Forum, local farmers produce 2 to 2.5 crore litres of milk per day worth Tk100 to Tk120 crore.

The shutdown led to a collapse of the supply chain during the two months with spillover effects, including oversupply and low prices in villages, and with high prices in urban and city areas coupled with delivery constraints.

Saiful said the shutdown had limited the collection, processing and sales of milk by the dairy companies. Sales in these companies had plummeted by 40-50 percent since the virus outbreak.

Terming the hiked cattle feed and fodder prices as the main obstacle to offsetting the financial losses of the industry, the Dairy Development Forum requested the government to subsidise the items.

The BDDF general secretary said that cattle growing usually turned into a difficult matter if the cost of fodder jumped to 50 percent of commercial farming. Farmers were now spending around 70 to 75 percent on cattle feed as fodder prices had gone high.

"As the farmers fail to supply sufficient feed to the cattle, the livestock have developed various health issues and diseases," Saiful claimed. He also pointed the finger at farmers' mismanagement and a lack of improved cow breeds.

The BDDF also claimed that local milk production faced an unfair competition with imported powdered milk.

"Importing milk powder in bulk is responsible for hurting the local dairy sector and so it is really a matter of regret that higher import duties have not been levied on this type product," said the BDDF general secretary.

According to data from the Bangladesh Bureau of Statistics (BBS) and Department of Livestock, Bangladesh imported 150 lakh tonnes of milk powder worth Tk 2,800 crore with only 10 percent duty in fiscal 2018-19. In the same year, 99 lakh tonnes of the dried dairy products were produced locally.

The BDDF leader urged the government to increase customs tariffs on bulk imports of powdered milk in the 2020-21 fiscal year to protect a thriving local sector.

Besides, the forum demanded a lowering of customs tariff on local dairy products, forming a fund to digitise dairy markets and introducing insurance facilities for the sector.