Govt asked to reduce taxes on milk production chain

Despite an increase in milk production in Uganda over the past seven years, players in the milk production and marketing sector are concerned that milk consumption in the country still falls short of the recommended levels by the World Health Organization (WHO). According to the 2020 Dairy Development Authority data, per capita milk consumption in Uganda stands at 62 liters, which is significantly lower than the WHO's recommendation of 200 liters. This is a major cause for concern as milk is an essential part of a healthy and balanced diet, providing necessary nutrients such as calcium, protein, and vitamins.

Racheal Arinaitwe, the CEO of Royal Milk Company, spoke to journalists during the East African Business Expo, where she attributed the low milk consumption in Uganda to high production costs and taxes during the production chain. Arinaitwe stated that milk production in Uganda faces challenges such as high production costs, which affects the pricing of the end product, and power blackouts that interfere with the milk production chain. Therefore, producers are forced to invest in high-quality technologies to ensure that the production process is not affected, resulting in additional costs.

Moreover, the increase in milk production has not translated into significant value addition as only 30% of the annual production is processed on average, leading to a lot of wastage. This highlights the need for increased investment in the value addition chain, which can help create jobs and increase income for small-scale farmers. According to the DDA report, milk production has increased by 74% from 2.08 billion in 2015 to 2.81 billion in the period ending July 2021. However, the increase was lower than the projected three billion litres during the same period.

In addition to the low milk consumption, the sector also faces stiff competition from imported milk products, which are often cheaper due to government subsidies and preferential treatment. This has led to a decline in the demand for locally produced milk products, which affects the income of small-scale farmers who rely on milk production for their livelihood. Therefore, the government needs to provide incentives and support to local milk producers to help them compete effectively with imported milk products.

In conclusion, the milk production and marketing industry in Uganda faces significant challenges that need to be addressed to increase milk consumption and value addition. The government needs to provide support and incentives to local milk producers to help them compete effectively with imported milk products. Additionally, the sector needs to invest in high-quality technologies and value addition chains to minimize wastage and increase income for small-scale farmers. By addressing these challenges, the industry can achieve its full potential and contribute significantly to the country's economy.