Handbrake for milk

Источник: The DairyNews
The Ministry of agriculture intends to solve the problems of the dairy market in manual mode. What do the participants think about it and what is their attitude to the current situation in the industry wondered the correspondent of The DairyNews.
The Ministry of agriculture of the Russian Federation holds a series of meetings on the current price situation in the dairy market of the country. The first proposals of the Ministry caused a mixed reaction, and regional participants all state that the initiatives of the Ministry of agriculture require improvement, because despite the goal, they lead to further bureaucratization of processes in the industry.

The key guilty party of the sharp decline in purchase prices for milk the Russian authorities definitely call processors, attracted by cheap imported milk powder. As a result, at the warehouses Russian dryers have accumulated a similar product, because many players were waiting for active interventions (and then the closure of Belarusian supplies), as well as a decrease in the price of raw milk up to 40% in some regions.

On April 4, the first Deputy Minister of agriculture of Russia Dzhambulat Khatuov presented the strategy of market stabilization at a meeting of the State Duma Committee on agrarian issues. According to the data obtained from the sources of The DairyNews that were present at the event, the Ministry of agriculture proposes to reduce quotas for the supply of skimmed milk powder from Belarus to Russia, leaving only one Belarusian company; introduce certification of processors; reduce the number of intermediaries between farmers and processing plants.

"The specialized departments of the Ministry analyzed dairy balances of all regions. We managed to put together a complete picture of the milk market in the Russian Federation", - said Dzhambulat Khatuov. 

According to him, for the first time in the post-Soviet period, milk production in Russia is growing, adding 0.5 million tons per year. For the three months of 2018, the increase amounted to 180 thousand tons of raw milk. The dynamics of growth is such that in the coming years, Russian milk producers will be able to cover the domestic needs of the country, completely replacing imported raw materials.

Dzhambulat Khatuov indicated that in a number of regions there was recorded an unjustified fall in procurement prices on raw milk. The volumes of cheap imported raw materials influence the balance of prices. He noted the need to take urgent measures to improve market mechanisms and protect farmers.

"This is primarily an adjustment of the volume of milk powder supplies from the Republic of Belarus on the basis of agreed balances; support for traders having long - term contracts with farmers; the widespread introduction of electronic veterinary certification; state support for increasing the population of dairy cattle", - said Dzhambulat Khatuov and urged senators to support the initiatives of the Ministry of agriculture of Russia to restore order in the dairy market.

Analyzing the dairy balance of the country, Director of the Department of economy, investment and regulation of agricultural markets Anatoly Kutsenko noted that last year the state support for the dairy industry amounted to 31.4 billion rubles – this is 22% of all state support funds.

He also said that the production capacity of the dairy industry needs modernization.

"The solution to this problem will be concessional lending for the reconstruction of processing enterprises. Also processors will be able to use preferential credits for replenishment of the working capital necessary for purchase of raw milk", - declared Anatoly Kutsenko.

"In my opinion, such support (which is offered by the Ministry of agriculture) is similar to artificial. In addition, a monopolist in any sphere is not a very positive phenomenon. The less milk we will import – powdered or raw – the better it will be for domestic farmers. Protecting the interests of farmers is a competent policy in the form of moderate and reasonable import duties which are one of the key factors that always works. Our manufacturers can also produce raw milk – why do we need to bring more in large amount", - said in an interview to The DairyNews one of the participants of the dairy market of the Central Federal District.
Executive Director of the Dairy Union of Russia (The Russian Union of dairy industry enterprises) Ludmila Manitskaya has negatively assessed the proposal of the Ministry of agriculture.

"We need legislation to regulate the importation of certain codes of commodity nomenclature of foreign economic activities, under which sanctions, contraband and falsified products are absolutely legally imported into the country. We need to solve the issue with retail chains. The shelf never falls in price, it always has a steady growth, while people lose income, and the purchasing price of networks for products from the factories remains only at the discretion of the networks themselves. It is necessary to solve the problem of trade margins. What long-term contracts can we talk about if no one guarantees us "understanding" on the part of networks? The problems of identification of cattle and leukemia remain open and unresolved. Moreover, the last protective barrier against leukemia is simply removed from the State Program (the reference to the relevant technical regulations, which banned the subsidy of leukemic milk, has been excluded). And this, among other things, refers to the health of the herd, milk quality, security and the health of the country, in the end. We want to work in this direction, we have to do it."- The expert gave examples of necessary measures.

Vasily Redin, Executive Director of the association “VEMA”, stressed the need for tactical steps for the dairy industry.

"Today we are experiencing problems with the implementation of conditions under previously signed contracts, as Buyers are trying to change them. I think that it is necessary to use the experience of OPEC and determine the targets, objectives and agree on the terms of cooperation", - said Vasily Redin.

Market participants note that first of all, there is a need in comprehensive approach and the protection of domestic market in the form of globally recognized import duties. One should not forget about the systematic policy to increase the consumption of dairy products. After all, despite the fact that Russia is originally a country that traditionally consumes a large amount of milk, today its position in the country is discredited.

Read full article in Russian on DairyNews.ru
30.01.2024
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