Multi-national dairy company operates with impunity

When Zambia decided to privatise its national dairy board back in the 1990’s, it opened the way for an eventual big-business monopoly over the sale and supply of milk. And it is smallscale farmers who are feeling the negative brunt of this.

The Rural Women’s Assembly of Zambia, has testified at the Second Permanent People’s Tribunal on Transnational Corporations how Parmalat has cornered the dairy market reducing competition while at the same time placing heavy burdens on smallholder farmers, particularly women.

 

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Grace Tepula from RWA Zambia presenting the Parmalat case 

 

Parmalat outsources its production through contract work. In the process, it has placed greater costs of production on smallholder farmers. For instance, smallholder farmers bear the cost of supplying maize to cows.  Farmers are also charged for transport and growing of fodder.

“There was no space for negotiation in this,” said RWA-Zambia in its testimony to the Tribunal. “The privatisation of state-owned companies has undermined competition. As a result, Parmalat does whatever it wants with smallholder farmers. Regulation has fallen away with privatisation.”

The organisation’s testimony outlined how the price for milk was fixed by Parmalat. However, while milk from commercial farmers is graded, with the possibility of higher prices, smallholder farmers sell their produce at the same price, whatever the grade.

Due to Parmalat’s unfair low milk producer prices, women small-scale dairy farmers have been deprived of their livelihoods.

RWA-Zambia reports that malnutrition cases have escalated in the area. They report also that 16 women out of the 25 initial beneficiaries of cows from Heifer International have lost their cows as they could not manage to feed them.

“The cost of feed, drugs and vet services were too high in comparison to what Parmalat paid for their milk. Parmalat pays 3.78 Kwacha per litre of milk to small-scale farmers while it pays commercial farmers 5-6 Kwacha per litre and retails the same litre at between 10-12 Kwacha per litre on the market,” the organisation said in its testimony.

“The people most affected are the women, widows, orphans and children. The women are unable to sustain their homes, can’t take children to school let alone drink the milk as they sell everything in order to get a bit more for other needs e.g. medicals,” the organisation said.

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