All Island Dairy Association voices concerns over escalating input costs

The All Island Dairy Association (AIDA) has voiced grave  concerns regarding escalating prices of rising input costs such as feed  ingredients and requests the government for assistance.The cost of producing a litre of milk has surged by 174%  between 2013 and 2022, primarily due to rising input costs such as feed  ingredients. Retail prices have followed suit, increasing by 168% in the  same period.“Fresh milk production and fresh milk-based products were  previously VAT exempt, providing essential support to around 300,000  small-scale farmers and over 2 million dependents directly or indirectly  involved in the sector.”The additional burden of increased VAT could further strain  the affordability of dairy products, potentially leading to a decline  in consumption. Anticipated price increases in dairy products, integral  to the Sri Lankan diet, could result in a significant decline in  consumption, estimated to be around 30-40%.

Such a downturn in dairy  consumption has ripple effects across ancillary sectors, including  packaging, transportation, and retail, potentially leading to job losses  and decreased income for workers in these related fields.Members of  the All Island Dairy Association are key stakeholders in Sri Lanka’s  dairy sector, contributing to the collection of nearly 60% of the  nation’s daily milk produced by farmers and processing 200 to 250  million litres of fresh milk annually.

AIDA emphasizes the current  challenges faced by producers and processors, highlighting the struggles  in marketing local products.To enhance productivity and reduce local production costs,  AIDA proposes facilitating the import of feed ingredients.Additionally,  the association recommends providing the private sector with access to  underutilized land resources on government schemes for large-scale  intensive dairy farming, fodder cultivation, and silage production  through reasonably agreed long-term leases.

AIDA also encourages the cultivation of fodder/maize on  paddy fields during the Yala season, and between the Maha and Yala  seasons to meet the requirements of small and medium-scale dairy  farmers.The Association urges the government to reconsider the  proposed VAT increase, recognizing its far-reaching and detrimental  consequences on the dairy sector, rural livelihoods, and the overall  health and well-being of the Sri Lankan population.

( Source : Daily News)