The country is grappling with increased supply of milk production, which has left dairy farmers counting losses due to low demand locally.

Dairy sector figures show that in 2018 milk production increased by 68 per cent, while consumption of processed milk only grew by 19 per cent.

Industry players are now calling on the government to craft new measures to support the budding sector. They are concerned about the high cost of packaging since the government banned packaging using plastics.

Milk prices are also not as competitive as those in neighbouring countries in the region. For instance, at the beginning of last year, the Ministry of Trade and Industry issued a directive capping farm gate prices at Rwf220 per litre.

Farmers say the cap makes their milk uncompetitive in regional markets where farmers from neighbouring countries have access to affordable packaging and can sell their milk at more competitive prices.

According to sector players, some of the policies make milk production costly while consumption of processed milk is not growing at the same rate of milk production.

“Out of 198,000 litres of milk produced every day, we sell 105,000 litres on daily basis, which means that we remain with over 88,000 litres of milk that we have no market for,” said James Biseruka, the acting managing director of Inyange Industry, the biggestmilk processor in the country.

During a recent visit to Inyange Industry, members of the Parliamentary Standing Committee on Agriculture, Livestock and Environment, found the factory with a large volume of processed milk ready for the market, despite the factory’s management citing market volatility.

“Inyange Industry is not selling their products in both local and international markets. Their stores are full of ready-made milk products, yet they lack a market for them and this needs to be addressed,” said Venerande Nyirahirwa, the vice chairperson of the committee.

“Producing one kilo of powder milk requires at least 10 litres of milk, which sees it sell for $2.8 (Rwf2,500), while one kilo of imported powder milk costs $1.7 (Rwf1,500),” said Mr Biseruka.

However, milk production has benefited from the government’s one cow per family (Girinka) social protection programme, coupled with better farm gate prices for vulnerable farmers. The country’s milk production has risen sharply to more than two million litres daily over the past three years.

Data from the Ministry of Agriculture and Animal Resources (Minagri) shows that in 2017/2018 under the Girinka programme, over 326,000 cows were given to low-income earners as a way of fighting poverty and malnutrition.

But, milk exports are disrupting the market. According to recent data from the National Institute of Statistics of Rwanda, Burundi, DR Congo and Tanzania are the leading export destinations for Rwandan milk and milk products.

Recently, the Tanzanian government raised taxes on the importation of the milk by 1,233 per cent, under the newly signed Animal Diseases and Animal Products Movement Control Regulations. A litre of milk is now taxed Rwf775 (Tsh2,000) from Rwf5.8 (Tsh150).

According to the Ministry of Trade and Industry, emphasise was placed on growing local markets, in a bid to decentralise milk products.

“We are working with milk processors to get their products to consumers. We are also looking to set up a collaboration with schools, so that children can start drinking milk in schools,” said Cassien Karangwa, the director of internal trade in the Ministry of Trade and Industry.