A LES­SON IN SUR­VIVAL

Finweek English Edition - - Economic trends and analysis - JO­HANN VAN ZYL

THE DE­CLINE IN Zim­babwe’s econ­omy in 2004 (-2,3%), in 2005 (-4,2%) and in 2006 (es­ti­mated at -2,5%) is, ac­cord­ing to the Zim­babwe Coun­try File 2006, largely the re­sult of dras­tic drops in the coun­try’s agri­cul­tural earn­ings.

The pre­vi­ously re­spectable crops be­gan fall­ing dras­ti­cally from 1998, shortly be­fore the start of the land re­form fi­asco: the wheat crop dropped from around 300 000t to 64 000t last year; cof­fee fell from 10 000t to 1 500t; and to­bacco from around 224 000t to less than 60 000t.

How­ever, dairy pro­duc­ers aren’t do­ing so badly, with a fig­ure of about 93 000t, com­pared to 197 000t in 1998.

Deon Theron, chair­man of Zim­babwe’s Na­tional As­so­ci­a­tion of Dairy Farm­ers (NADF), says in the latest is­sue of Dairy Mail Africa that the good co-op­er­a­tion within the dairy in­dus­try was largely re­spon­si­ble for the sur­vival of dairy farm­ers. “The NADF has a very good re­la­tion­ship with the pro­ces­sors and the price is con­stantly de­ter­mined ac­cord­ing to a model that al­lows, among oth­ers, for in­fla­tion.”

Theron says it took 50 years be­fore milk cost Z$4 000/litre. But it then took just one year for the price to in­crease to Z$77 000/litre. “With in­fla­tion above 1 000%, quick and con­stant price ad­just­ments are es­sen­tial.”

In SA, there’s con­sid­er­able fric­tion be­tween farm­ers and pro­ces­sors. Many of the dairy farm­ers leav­ing the in­dus­try feel that pro­ces­sors in SA don’t com­pen­sate them prop­erly and that co-op­er­a­tion isn’t as it should be.

Per­haps they should learn from Zim­babwe’s dairy in­dus­try.

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