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| Slovak milk producers to protest in Brussels |
| Bratislava, 29.08.2015 |
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| The current crisis in milk production not only causes losses for farmers, but it may also result in some of them closing down their businesses, according to the Slovak Agricultural and Food Chamber (SPPK).
The big drop in the purchasing price of milk has caused problems for farmers across the European Union. The drop in prices comes amid the current Russian food embargo and abolition of milk quotas, meaning the market is flooded by milk and dairy products. Farmers are ready to protest against the current state and call for the solutions at the September 7 EU summit in Brussels.
“If the situation does not change, the farms may be closed down,” Milan Semančík, head of the SPPK, told the Pravda daily.
Some 26 of 550 farms were closed last year, and it is expected that this year it may rise to 50 farms, as reported by Pravda.
The milk sector currently employs some 10,000 people. If the number of dairy animals decreases, it will not only reduce the employment, but also investments into the sector.
“Where the breeding of milk cows stops, it will never be restored,” Jarmila Dubravská of SPPK told The Slovak Spectator.
Impacts of the crisis
The current situation in Slovakia is worse than in other EU countries as the prices for milk are below the EU average, according to Dubravská.
While about a year ago the average price of milk in the European market was 40-42 cents per litre, now it amounts to some 30 cents in developed countries. The last registered price per litre in Slovakia is 27 cents, which is about 10 cents less than last year at this time, said Agriculture Minister Ľubomír Jahnátek, as reported by the SITA newswire.
As a result, revenues in the milk production sector in the first half of this year dropped by €22 million year-on-year, though the farmers produced by 15 million litres more milk.
Moreover, the revenues do not cover the production costs, which amount to 35-40 cents.
Milk producers also criticise retailers. Some of them sell milk for 39 cents per litre, after discounts.
“Farmers sell the milk below their production costs, the retail pushed the dairymen into lower sales prices, but any impact on consumer prices is seen in the shops,” Stanislav Voskár, head of the Slovak Dairy Association, told Pravda.
Pavol Konštiak, president of the Association of Trade and Tourism (ZOCR), however rejects any criticism. He also disagrees with the analysis of the Association of Primary Milk Producers in Slovakia (SZPM), according to which retailers benefit from selling the cheap milk, as reported by Pravda.
Brussels summit to offer solutions
Jahnátek said that the decision to abolish quotas was poorly timed amid the parallel Russian sanctions on EU food.
“Unfortunately, countries neighbouring Slovakia, especially Poland, Germany, Denmark, which were the biggest producers, now eye the Slovak market,” Jahnátek said, as quoted by SITA, adding that the influence on prices and surplus of milk impacts production.
Another problem is the retail chains, but in this respect the ministry already addressed the European Commission, the minister said.
“If it does not deal with the unlimited influence of retail chains on prices, every support of the primary agricultural production is useless as everything extra the EC or countries, including Slovakia, give to farmers, ends up as increased profit for retail chains,” Jahnátek added, as quoted by SITA.
The agriculture ministers will also discuss the current milk crisis at the September 7 summit.
“The Commission is aware of the difficult situation faced by producers from different sectors in several member states,” Ingrid Ludviková of the EC Representation in Slovakia told The Slovak Spectator.
She added that the EC has already adopted some measures to alleviate the situation, like private storage aid and intervention price.
This kind of help is however “considerably unusable under our conditions”, Slovak Agriculture Ministry spokesman Peter Hajnala told The Slovak Spectator. No Slovak farmer has asked for this kind of aid yet, he added.
Slovakia thus wants to propose at the summit to temporarily restore the quotas or some kind of regulation system, at least until the Russian crisis is solved, Jahnátek said, as quoted by SITA.
On the same day as the summit, Slovak farmers will join their colleagues from other countries and will protest in Brussels.
“Though the 500 farmers who produce milk in Slovakia will not impact the situation in the EU, we can join the others at the European level,” said Alexander Pastorek, head of SZPM, as quoted by the TASR newswire.
Subsidies not enough
Slovakia currently offers various kinds of help to milk producers. Every farmer receives 3.7 cents per one kilogramme of produced milk from the first pillar. They can also receive further 1.9 cents per one kilogramme of produced milk, but they need to fulfil several conditions, TASR reported.
“Though the ministry supported milk cows breeding this year, the subsidies are not enough to reduce the loss,” Margita Štefániková, executive director of SZPM, told Pravda.
To solve the current crisis, SZPM proposes to increase its consumption which is very low in Slovakia: only 158.5 kilogrammes of milk per person per year. The average in the EU is 270 kilogrammes per person per year, she added.
Also Dubravská of SPPK says that the state aid is not enough. She says that the current situation may be solved by setting minimum price of milk, or introducing the system of regulations to save the sector in the EU member states.
“Creating the ‘safety net’ may help avoiding high losses and fluctuations,” Dubravská said, adding that such system would save money of not only member states, but also the whole EU. “If the problem is solved right in the beginning, it needs less effort and finances.”
Among other potential measures are the introduction of pro-export subsidies, supporting the sales of milk and dairy products, and also introducing the transparency to the relations among primary producers, processors and retailers.
“We are convinced that the question of margins and preventing the abuse of dominant position of retail chains is possible only at the EU level,” Dubravská said. Radka Minarechová
Spectator |
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