Irish merchandise amongst low cost EU dairy forcing some West African farmers out of enterprise

CHEAP SUBSTITUTE ‘MILK’ exported from Europe into West Africa is hurting the area’s native dairy trade.

A collaborative investigation by Noteworthy and Nigerian information outlet Premium Occasions into Irish dairy in Nigeria has discovered that enormous volumes of low cost European exports into West Africa have outcompeted native milk on worth.

This, in accordance with NGOs and merchants, has pushed many Nigerian dairy farmers out of enterprise.

Daniyan Abimbola, a industrial dairy farmer from Ondo State within the southwest of the nation, mentioned this competitors is the explanation “some dairy farms are pressured to close down lower than 5 years after they’re established.”

Our investigation examined the export of fat-filled milk powder (FFMP). Although butter and cheese exports are extra worthwhile, FFMP is Eire’s largest dairy export by way of quantity.

However, in accordance with European Fee rules, had been it to be bought throughout the EU, it couldn’t be labelled a milk product.

The European Fee informed Noteworthy that this product “cannot bear the time period ‘milk’ of their denomination” as in accordance with EU rules “milk merchandise need to derive solely from milk”.

Customers in Nigeria appear unaware of that truth, in accordance with market analysis Noteworthy has seen that was commissioned by An Bord Bia.

The Division of Agriculture, Meals and Marine (DAFM) informed Noteworthy that “Eire is dedicated to international rules-based worldwide commerce and is topic to EU agreements such because the Financial Partnership Settlement (EPA) with West Africa”.

The spokesperson mentioned that Irish initiatives help small farmers and meals producers in Africa.

They added that State businesses together with Teagasc, Bord Bia, Enterprise Eire and the Meals Security Authority of Eire “supply entry to Eire’s capabilities and experience in agri-food to our worldwide companions on a government-to-government foundation”.

EU Direct creates ‘unequal system’

Whereas the price of manufacturing for dairy is excessive in Europe, the Widespread Agricultural Coverage (CAP) helps farmers within the EU by offering direct help to complement their earnings and guarantee a ample incomes.

These direct aids additionally allow giant corporations to export dairy merchandise for cheaper than the price of manufacturing with out incurring a loss, mentioned Adrien Trouvadis. He’s a researcher from Group For Analysis and Know-how Exchanges (GRET), an NGO working within the West African area. He informed us:

Milk exports coming from the EU [are] actually low cost, due to the form of dumping organised within the European Union, particularly by the CAP.“That’s the reason the value on the [global] market is decrease than what is required for European farmers,” Trouvadis continued.

He known as this an “unequal system” the place the merchandise are ‘dumped’ on the African market at an “artificially low worth”.

Nonetheless, Olof Gill, agriculture and commerce spokesperson for the European Fee, mentioned that CAP help to EU farmers is “non-trade distorting”. He added:

“Over the previous 25 years, the CAP’s commerce and market distorting options have been eliminated, making certain that its influence on the expansion of agricultural sectors in creating international locations is marginal and, wherever doable, even helpful.”

Farmers within the area informed our investigative staff that they’re going through a distinct actuality.

“In contrast to what’s relevant in EU international locations, dairy farming isn’t subsidised and it’s cheaper to import milk than it’s to purchase from native farmers. As an example, it prices €0.09 to import a litre of milk and €0.21 to purchase the same amount from native producers,” Abimbola mentioned on the importation of milk in West Africa.

As reported by Politico in 2020 when it uncovered devastation of West Africa’s dairy sector by such merchandise, international locations do use excessive tariffs as a result of these EU subsidies to guard native contemporary milk and cheese.

However FFMP and different bulk powders, thought of by governments there as a necessity for individuals on low incomes, have a customs responsibility of simply 5% in international locations who’re members of the Financial Neighborhood of West African States (ECOWAS).

A joint report by NGOs together with GRET and Oxfam Belgium earlier this yr additionally discovered that “competitors from imported milk powders and, to an excellent better extent, from imported fat-filled milk powder is tending to extend the area’s meals dependency”.

It said that this “will increase the vulnerability of customers” who may be impacted by worth surges.

Thousands and thousands value of low cost Irish merchandise exported

Nigeria spends near $1.3 billion USD (€1.2 billion) on dairy imports yearly.

Paperwork launched to Noteworthy from Bord Bia through the Freedom of Info Act present that over 60% of dairy consumed in Nigeria is imported.

In 2023, Eire’s dairy exports to West Africa had been valued at €327.8 million, in accordance with Bord Bia, whereas CSO information confirmed that Irish fat-filled milk powder (FFMP) exports to the area had been valued at €293.5 million and to Nigeria alone amounted to €88.4 million.

Nigeria’s annual import invoice for milk and different dairy merchandise is presently estimated at US$1.3 billion. That is primarily powdered milk from Denmark, Netherlands, US, South Africa, New Zealand and the EU.

Regardless of this massive import determine, Nigerians aren’t large milk drinkers (5 kg per particular person in 2022 in comparison with Irish individuals who used 310 kg per person who yr), although it’s anticipated that milk consumption there’ll develop with rising urbanisation.

Nigeria prime vacation spot for Irish FFMP exports

FFMP is a mixture of vegetable fats and skimmed milk in powdered type. The skimmed milk is normally a byproduct of the manufacturing of butter and different merchandise which include the precious milk fats.

Worldwide, FFMP has different makes use of. In Africa and another components of the World South, it’s used as a milk substitute, whereas in most areas, FFMP is used as an ingredient in merchandise like ice-creams, snacks, soups and sauces.

The Meals Security Authority of Eire (FSAI) informed Noteworthy that in Eire “fat-filled milk powder isn’t bought on to customers, however is bought enterprise to enterprise to be used within the manufacturing of a number of meals gadgets”.

Typically fortified with nutritional vitamins, extra shelf secure than common liquid milk and cheaper than entire milk powder, FFMP is bought as a milk substitute in Nigeria, whose native milk trade continues to be largely unregulated.

With a historic, virtually three-decade excessive inflation price of 34.19%, affordability has develop into a key subject for customers within the nation who’re on the lookout for cheaper milk choices.

In analysis commissioned by Bord Bia final yr, obtained through FOI, most Nigerian wholesalers surveyed discovered “worth rises had been negatively impacting their gross sales of milk powder”.

One wholesaler in Kano, a metropolis within the north, mentioned: “Prospects are telling us they don’t have sufficient money to purchase milk powder on the new [increased] costs.”

Irish customers are feeling the hit of rising prices, but our inflation price was simply 1.5% final month.

However, fat-filled milk powder isn’t milk.

Each EU rules and the Nationwide Company for Meals and Drug Administration and Management (NAFDAC) in Nigeria specify that FFMP isn’t milk.

“FFMP merchandise will not be categorised as milk in the identical manner as entire milk powder or skimmed milk powder,” the NAFDAC informed Premium Occasions, our investigative companions.

A European Fee spokesperson informed us that as an alternative of FFMP, within the EU, they’re known as “FFP (Fats Crammed Powders), with out together with the ‘M’ within the center (or the phrase ‘milk’)”.

However many customers in Nigeria are unaware of this truth.

In authorities paperwork from each Eire and Nigeria, in branding and promoting, and colloquially, FFP is known as FFMP (fat-filled milk powder).

In line with a market analysis report by Bord Bia, launched to Noteworthy through FOI:

Customers don’t essentially perceive the distinction between FFMP or full cream [milk powder] – they’re model loyal above all.

Premium Occasions spoke to customers and merchants in Abuja, Nigeria’s administrative and political capital, the place customers echoed Bord Bia’s findings.

One client mentioned: “I don’t know what the distinction[s] between fat-filled milk and entire milk are. I don’t actually learn the labels, what I concentrate on is the design.”

Meals scientist, Abiola Olaniyan, informed our investigative staff that “most Nigerians have little or no data in regards to the completely different sorts of powdered milk. They only assume all types of milk are the identical and the distinction if there’s any is within the model.”

Marketed as milk in West Africa

Eire has a substantial market maintain in Nigeria. 1 / 4 of all milk powders discovered within the nation’s largest metropolis, Lagos, are Irish, in accordance with FOI studies launched to Noteworthy by Bord Bia. Lagos is an African megacity with present inhabitants estimates between 16 and 25 million.

Kerrygold Avantage is a well-liked Irish fat-filled milk powder within the metropolis. It’s made by Irish firm Ornua, who additionally make Kerrygold butter.

Kerrygold Avantage is marketed as: “Produced with the best contemporary full-fat milk, our premium milk powder mixes effortlessly right into a scrumptious creamy milk, offering the important vitamins for a wholesome physique.” Kerrygold Full Cream Milk Powder has related promoting.

Ornua is Eire’s largest exporter of dairy merchandise, in accordance with its newest annual report. Final yr, it recorded €3.4 billion in gross sales and an working revenue of €116.8 million.

Whereas different Irish dairy producers additionally export FFMP to West Africa, Premium Occasions discovered Kerrygold Avantage in quite a few markets and shops in Abuja when trying to find Irish merchandise as a part of this investigation.

On the product’s launch in 2019, Olatunde Afolabi, common supervisor of Ornua in Nigeria mentioned “focus is on the poor section, individuals on the backside of the pyramid”. He added: “We present like to them by sharing within the high quality that Kerrygold presents.”

In launching the product, Ornua mentioned that “the corporate’s social duty apply stays core in reaching an environment friendly manufacturing chain”, and it’s devoted to bringing the most effective dairy merchandise to the Nigerian market with out compromising its high quality.

The submit says: Enjoyable Reality – A single glass of milk incorporates virtually 30% of your each day really helpful calcium, with a photograph of Kerrygold Avantage. The caption says – That’s so cool as a result of calcium is crucial for the formation of robust bones and tooth! Cheers to high quality vitamin. With the hashtags – Drink Kerrygold Milk, Kerrygold Avantage and Milk.Kerrygold Nigeria’s Instagram submit from 10 Might 2024 selling Kerrygold Avantage. Screenshot of @kerrygoldnigeria on Instagram

Kerrygold Nigeria’s social media typically options photographs of Kerrygold Avantage the place it’s known as “Kerrygold milk” both within the captions or within the advert itself.

Kerrygold Avantage’s packaging depicts milk being poured right into a glass with a scenic Irish-looking panorama within the background. Below the Kerrygold emblem and ‘Avantage’ branding, “instantaneous milk powder with vegetable fats” is written in 4 languages.

The packaging additionally states that it incorporates skimmed milk, soy, sugar and vegetable oil.

Different widespread FFMP manufacturers in Nigeria embody Dano Cool Cow, Peak and Wamco, however none of these are Irish.

Meals scientist Olaniyan informed Premium Occasions that the way in which FFMP is marketed is the difficulty. She mentioned that manufacturers could not need customers to distinguish between FFMP and milk.

“The problem is especially from packaging and promoting.” She added that many producers could not need “residents to know the distinction”.

Ornua and Bord Bia carried out a two-day occasion at the beginning of June in Lagos for ‘World Milk Day’.

On the occasion, Ornua’s fat-filled milk powder model Kerrygold Avantage was closely featured and marketed alongside its full-cream milk powder which is product of full-fat milk, with samples being handed out to customers.

GRET’s Trouvadis informed Noteworthy that the promoting round fat-filled milk powders, whereas not false, is “not clear sufficient”.

Given the stance of the EU and Nigeria on not utilizing the time period ‘milk’ to explain these merchandise, we requested Ornua and Bord Bia about their promoting of FFP as ‘fat-filled milk powder’ on social media and on the ‘World Milk Day’ occasion however neither answered our queries.

‘Not a authorized requirement’ to reveal palm oil

On common, fat-filled milk powders present in Nigeria have a fats content material of between 28 to 30%, however it’s unclear how a lot of the added fats content material is from vegetable oil.

The addition of vegetable oil makes the product round 30% cheaper than entire milk powder, in accordance with Trouvadis. FFMP costs additionally change relying on international palm oil costs.

“More often than not it’s palm oil – they don’t actually point out that,”, Trouvadis mentioned about FFMP packaging in Nigeria and model transparency round labelling.

Nonetheless, it’s not a authorized requirement to reveal these particulars, he defined.

Barry Newman, the then regional head for Ornua North & Central Africa, addressed sustainability on the launch of Kerrygold Avantage FFMP in Nigeria in 2019.

He mentioned that Kerrygold Avantage was “at all times going to be sourced on the island of Eire which has an extended lengthy historical past of milk manufacturing”, and added that the corporate was proud that “the palm oil that’s utilized in Kerrygold will probably be from responsibly sourced palm oil producers which constitutes 20% of the world’s palm oil manufacturing”.

Increased emissions when palm oil added

Palm oil has been traditionally linked to huge deforestation and biodiversity loss, significantly in Southeast Asia.

Analysis from UCD in 2018 discovered that the carbon footprint of FFMP is considerably impacted by the supply of vegetable oil used as an ingredient.

The research regarded on the emissions from butter, skimmed milk powder and fat-filled powder from the farm to processor gate. It discovered the carbon footprint of merchandise different between corporations however skimmed milk powder and FFMP had been considerably increased than butter.

FFMP created with palm oil is a excessive emissions product, in accordance with Dr Maneesh Mediboyina, a postdoctoral researcher who specialises in such lifecycle assessments at College School Dublin.

The 2018 analysis said that “the land transformation as a result of palm oil plantation was discovered to be the biggest contributor” of the FFMP product’s carbon footprint.

Mediboyina mentioned that emissions from these dairy merchandise are possible increased than this analysis as they don’t bear in mind transport of the product to customers in West Africa.

“The precise CO2 footprint and CED [cumulative energy demand] are possible increased than the calculated values”.

In West Africa, the local weather disaster has manifested in some ways, affecting the nation’s dairy manufacturing.

The most important cattle inhabitants in Nigeria is discovered within the nation’s north. Deforestation and a discount in pure habitats, amongst different causes, has pressured cattle herds emigrate south for higher grazing and availability of water, in accordance with Nigeria’s Nationwide Dairy Coverage in June.

The Industrial Dairy Ranchers Affiliation of Nigeria informed Premium Occasions that local weather change “impacts the power of the cattle to provide milk”.

Its common secretary Daniyan Abimbola mentioned: “For industrial dairy farmers, local weather change is a significant factor. The delay in rainfall previously years typically impacts farmlands, drying up vegetation and rising the issue of getting meals for the cattle.”

Change forward as new Nigerian dairy coverage launched

Change could be across the nook for Nigeria.

The nation’s Nationwide Dairy Coverage launched in early June hopes to achieve “self sufficiency in milk manufacturing”.

It seeks to crossbreed native breeds for extra milk output, set up milk assortment centres, facilitate a assured worth for uncooked milk and set up a minimal share of regionally sourced milk for all milk merchandise.

In a press launch on World Milk Day in June, the Federal Authorities of Nigeria mentioned that it’s focusing on a ten% annual progress price for the dairy trade.

Importantly for Irish exporters, one of many coverage’s goals is for the Nigerian dairy sector “to provide reasonably priced and accessible milk merchandise that can scale back imports”.

Among the many interventions deliberate “to substitute importation” is for all milk merchandise to include “a progressive minimal share of regionally sourced milk”.

Incorporation of native milk into powders and different choices, resembling a ban on FFMP imports in West Africa and rising the product’s import tariff from 5% to 35%, had been explored within the joint NGO report on sustainable improvement of West African native dairy earlier this yr. It discovered:

Whichever choice is taken into account, the area’s capability for will increase in milk manufacturing is one important situation for achievement, its assortment and processing capability is extra important nonetheless.Although many NGOs advocate tariff will increase, this isn’t possible in Nigeria for FFMP any time quickly, as its new dairy coverage states it’s “to be imported on the prevailing price for the subsequent 10 years”.

Total, dairy exports to West Africa from Eire have already began to say no.

FFMP exports to the area had been value over €430 million in 2022 however underneath €300 million final yr. Bord Bia said earlier this yr that that is “due largely to nationwide modifications in coverage and angle to dairy imports, drastically impacting the worldwide dairy sector”.

The State company wrote in the identical replace, launched to Noteworthy through FOI, that “Irish dairy can also be priced increased in market than different worldwide imports”.

To deal with this decline, “Bord Bia has been working to diversify Irish exports to the areas with drinks as a promising sector coming into 2024”.

READ ALSO:NAFDAC mops up faux Milo drinks

Trouvadis mentioned that international dairy corporations in Nigeria “have a robust management on the worth chain.”

He added that the brand new Nigerian coverage is pushing international multinationals to adapt themselves to altering situations, with some getting concerned in native dairy manufacturing.

“It’s an enormous market, and so they don’t need to lose it.”

Folks in Nigeria are hopeful that this may enhance their scenario. Dr Ishaq Bello from Nigerian non-profit, Milk Worth Chain Basis, mentioned:

“We’re optimistic. Nigeria needs to actively scale back imports.”

Reporter: Suhasini Srinivasaragavan • Editor: Maria Delaney

With reporting by Beloved John, working with managing editor Idris Akinbajo of the Premium Occasions in Nigeria, our investigative companion for this mission.