What to do in this dairy crisis? The roadmap 2024-2025

What to do in this dairy crisis? The roadmap 2024-2025
What to do in this dairy crisis? The roadmap 2024-2025

We have always said that our dairy sector is over-diagnosed and perhaps this is true, although only partially. What is true is that more than once significant resources and time have been invested in studies and diagnoses by multiple consultancies – many of them foreign – which, with extensive knowledge, compare the development of our sector to the development that has taken place in countries with climatic, economic and social characteristics very different from ours.

In my opinion and knowledge – created and destroyed to recreate it for more than three decades – there is more than a diagnosis of the disease, a diagnosis of the symptoms, which is very clear. The specific causes of the disease are often not seen or are underestimated and the treatments are either shotgun or very ambiguous and without priority according to the importance of the illnesses. In addition, these treatments that would be translated into public policies and sectoral programs have become in many cases the petty cash of the image or political campaign of the decision makers for these cases. The various dairy CONPES and the international aid that have been “invested” for many years in the sector have not even partially achieved their objectives of modernizing and increasing the competitiveness of the sector; and proof of this is the current crisis.

As things stand, we continue to be in a cyclical crisis and, as we mentioned in another column, we have reached a crisis that is more structural and profound, more serious and prolonged than any other we have experienced in the sector in the last 35 years. We continue to have peasant ranchers with low technical and economic indicators, without robust national technical assistance programs, without sufficient modern marketing channels, without real linkages, without technology transfer, and a long list of etcetera.

Public services, tertiary and access roads, security, health, institutional presence and, in general, the quality of life in the Colombian countryside continues to lag behind and the few improvements we have had in recent decades are being lost again.

Perhaps many of the measures we propose here today have already been mentioned before and in multiple scenarios, some not so much; but all are the result of serious analysis and the collection of ideas from many actors in the discussions that I have daily both institutionally and over a good coffee with milk, that is 100% Colombian, with some cattle rancher friend or sector official.

For some, it may sound bold, arrogant, and for others, it may be the same old thing, but I will have to repeat it over and over again until it is implemented or until there are no more dairy farmers and dairy sector in the country to protect; because I am convinced that the panorama would be different if we implemented them and even better if we had implemented them correctly years ago. Someday they will read me, someday my words will echo in the minds of decision makers, and someday I will perhaps have a better microphone and the necessary pulpit, and I will be able to deliver my message more strongly.

I mention the compilation of measures as a roadmap for 2024-2025 in a very basic way, since the legal architecture of the same, as well as the operationalization, will have to be defined by those who correspond, always seeking practicality and the achievement of the higher objective beyond some legal obstacles that must be overcome.

A- Shock measures. Take it now, because if you don’t do it there won’t be time for the others that are perhaps more important, but less urgent.

1- Allocate resources from the national budget for the purchase of milk and cheese for vulnerable populations, the army, police, ICBF, PAE, prison population, etc.

2- Define by decree the supply of dairy protein in ICBF and PAE diets, taking into account FAO nutritional recommendations.

3- Create public-private partnerships to purchase and spray surplus milk that the formal industry currently refuses to buy, allocating public resources to enable these partnerships and their development.

B- Short-term measures

4- Tripartite fund (FNG-Industry-Government) to promote public purchasing programs in the Colombian Stock Exchange and compensations for exports of Colombian Powdered Milk, expanding its current coverage that comes exclusively from resources from the livestock parafiscality in the national livestock fund and that with the 4,000 million destined for the national market in the Stock Exchange and the 3,600 million pesos assigned for export compensations; have allowed to evacuate a significant volume of milk from the inventories that harass the industry and that bring as a logical consequence the reduction of purchase prices to the producer and the reduction in purchase volumes.

5- Promotion of consumption within the national program of “better than ours” and with the development of a 100% Colombian milk seal. This promotion should strongly encourage the consumption of cheeses and products accessible to lower social classes.

6- Increase INVIMA controls on the quality of products offered to consumers and implement a National Traceability System for imported powdered milk and whey, which would greatly help in this control process.

7- Establishment of supply contracts between industry and livestock producers, so that both have clear negotiation conditions in terms of prices and purchase and sale volumes.

8- Reduce the milk supply on each farm to the extent technically and economically possible, for example, with breeding strategies with more milk, weaning calves at a heavier age and/or in less time. Here we call on the national government not to discourage meat production or the export of live steers, because in addition to the direct damage caused to that subsector, the dairy subsector is also strongly affected indirectly.

9- Establishment of regional spraying, UHT and cheese plants in public-private partnerships. Conduct serious financial, technical and, above all, market feasibility studies. There are already some initiatives and studies that simply need to be updated in various regions of the country, such as Caquetá and Boyacá.

10- Trade safeguards to protect us from the entry of powdered milk and whey from Bolivia and the USA using the current tools in trade agreements. We should not insist on the populist but impracticable proposal of renegotiating the FTAs ​​and above all; the sectoral authorities and the government should not commit to something like this as has happened in recent years.

11- Design and implementation of a national technical assistance system with a medium and long-term vision and not a “budgetary validity.” Additionally, this technical assistance should be mandatory in agricultural development and investment loans.

12- Promote with a national budget silvopastoral systems that achieve environmental sustainability and allow the productive model to be redirected with cost reduction.

13- Promoting productive alliances and linkage projects.

14- Campaign to reduce informality in the milk and dairy products market by encouraging small industrialists and informal traders.

Ricardo Arenas Ovalle. Veterinarian. Specialist in Finance and International Business. Specialist in Management of agricultural companies. Agro-industrial consultant. Expert in milk production and quality.

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