22nd September 10:44 PM
The rise in the price of butter is due to the global increase in the price - AG
By Vijay Narayan
Thursday 08/03/2018
NFP Leader Professor Biman Prasad [left] and Attorney General Aiyaz Sayed-Khaiyum

Attorney General Aiyaz Sayed-Khaiyum says the rise in the price of butter is due to the global increase in the price over the past year.

While speaking on butter prices in parliament yesterday, Sayed-Khaiyum said that NFP Leader Professor Biman Prasad has been misleading people in the rural areas in Vanua Levu by claiming that the rise in the price of butter has been driven by the government and government policies.

Sayed-Khaiyum says what Prasad told the people of Vanua Levu is completely false.

He says the reality is that the average landed cost of butter slabs duty-free ranged from $13 to $14.48 per kilogram in 2017 compared to $8.88 in the beginning of last year.

Sayed-Khaiyum says the reason is that the price of butter worldwide has gone up as there is a huge demand for butter.

There was an increase of 63% in the price because most of the milk producers in the world want to have higher value-added products from milk as people want more cream or cheese.

He says Fiji Dairy imports majority of its bulk requirements, which are butter slabs from NZ with value addition done in Fiji.

He says butter prices in New Zealand fully influence butter prices in Fiji.

The Attorney General says what we call Rewa Butter is in fact already made in New Zealand, and this has been done from the Sam Speight days.

Sayed-Khaiyum clarifies that for years, Rewa Dairy has always had protection, and Rewa Dairy has always brought in bulk butter at zero duty.  

He says that in order to protect Rewa Dairy, there was a duty on fully packaged butter that came from overseas and duty protection rate was 27%.

In 2009 to salvage Rewa Dairy before the shares were divested, the duty was increased to 32%.

Sayed-Khaiyum says Southern Cross Foods Limited that runs Fiji Dairy took on the $17 million debt from Rewa Dairy when they took over the company and they were given protection for certain products for a limited period of time.

Southern Cross Foods also had to invest in a farm themselves, chilling plants were set up in Ba and Lautoka, another two chilling plants will be set up in Nadroga and Yaqara and they had to invest in modernising the plant and machinery within 3 years.

Sayed-Khaiyum says NFP has said that they will remove the zero concession enjoyed by Fiji Dairy and allow all importers to compete on a level playing field.

The Attorney General questions what will happen to the 350 dairy farmers if the concessions for Fiji Dairy are removed and what will happen if we rely on milk imports when the global prices go up.

He stresses that the price of butter or fuel and other items will go up if it is transported from Viti Levu to Vanua Levu.

When asked by SODELPA MP Niko Nawaikula on whether milk production has increased, Sayed-Khaiyum said production had gone down after the cows had diseases.

Nawaikula also said that the government has taken away the ownership of Rewa Dairy from the dairy farmers.

Sayed-Khaiyum says the farmers still own 20% of the shares however Nawaikula said that 20% is not ownership.

The Attorney General then said that a share is a share, and when you have a share in a company, it means you are a shareholder.

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