FIJI DAIRY INDUSTRY FACES EXODUS

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SUVA, Fiji (Fiji Times, Feb. 7) - Expiring land leases and the low price of milk are forcing Fiji farmers to abandon the dairy industry.

The move could cripple the industry as farmers in Tailevu produce 80 percent of local milk supply.

[PIR editor’s note: Tailevu province is located on the east coast of Fiji’s Viti Levu island, northeast of the smaller Rewa province where the capital city of Suva is situated.]

The development has spurred Rewa Dairy Cooperative Limited to pursue remedial measures.

Rewa Dairy chief executive officer Savenaca Seniloli said he was aware milk supply from Tailevu had dwindled since the lease expiry problem started five years ago.

Dairy farmers from Tailevu supply Rewa Dairy with eight million liters [over 2.1 million gallons] of milk annually but this has fallen to six million liters [over 1.5 million gallons] – out of the 11.8 million liters [over 3.1 million gallons] total that is annually supplied to Rewa Dairy.

"We've started talks with the Native Land Trust Board and we're treating this as priority because we don't want a similar problem like the sugar industry to have to go through. We don't want our supply to drop. These farmers do not want to invest in their farms because of the uncertainty. Those who have come into the industry do not have the capacity these farmers had," Seniloli said.

Tailevu farmer Kasmir Singh said the future was uncertain for dairy farmers in Tailevu because of the short lease tenure and the low price of milk, which barely cover production costs. Rewa Dairy buys milk for FJ$0.44/liter [US$0.94/gallon] from farmers.

But Singh said the price was too low to turn a profit.

"Right now the cost of feed per kilogram is FJ$3 [US$1.75] but if the price goes back to the normal FJ$8 per kilogram, we will be making a loss because other production costs like fuel affects our profit," Singh said.

Singh said the balance - between FJ$0.44 /liter [US$0.94/gallon] compared to FJ$1.50/liter [US$3.29/gallon] for processed milk - is made up by the end of the year bonus.

But dairy farmers have yet to receive last year's bonus.

"Last year we did not receive any bonus even though Rewa Dairy might have said it had made a profit but I am not aware of that because the annual report is not out yet," Singh said.

A press release by Rewa Dairy issued yesterday stated it made a profit last year compared to the FJ$1.5 million [US$875,000] loss the company made in 2003 and FJ$1.3 million [US$758,000] loss in 2004.

Rewa Dairy has to import 70 million liters [more than 18.4 million gallons] of milk per year to meet demand.

Local suppliers can only provide 11.8 million liters annually.

Seniloli said another issue arising over the lease problem was the wishes of landowners to renew farm leases.

"There are many fronts to this and I think the landowners have been sensible in their approach about the land issue but we will try to work on this problem," Seniloli said.

Seniloli said there were 115 dairy farmers in Tailevu supplying milk, but Kasmir Singh estimated the number could be more than that.

"These are big holding farms and we already have some smaller but successful farms whose leases have expired and dairy farm production could be affected," Singh said.

"I know of more than eight farmers whose leases have expired and many of them have left while some of them have only three years left on their land lease."

The lease on a portion of Singh's 588-acre farm expires in three years.

February 8, 2006

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