Farmers address President Grybauskaitė over situation in dairy sector

In their address, the farmers have asked to guarantee that all negotiating powers and relations between milk producers and processors be economically and legally balanced. They have emphasised that already last October milk producers were paid a third less per kilogram of milk compared to other European Union countries, while in January purchasing prices were reduced again.

“Many major milk producers were offered EUR 0.18-0.19 per kilogram of milk (EUR 0.21-0.22 for natural milk), some cooperatives were offered only EUR 0.14 per kg, while the smallest producers merely EUR 0.12 per kg,” reads the statement signed by 17 farmers’ organisations.

Farmer representatives have noted that current level of milk purchase prices, even taking into account the EU support, does not cover the cost of production. Therefore, they are looking for the cheapest ways to reduce the number of farmed cows. Moreover, the size of financial support for losses incurred in December and January remains unknown yet.

Next, because milk purchase prices are not falling in international markets, Lithuanian farmers suspect that milk processing enterprises and retail networks use the Russian embargo on food products as pretext to reduce milk purchase prices.

“Inadequate dairy product price breakdown and its changes also prove this. For example, around 37 percent of milk price share (27 percent a year ago) goes to processors, 21 percent to retailers, 17 percent as value added tax and only 25 percent to producers,” the letter read.

As reported, the Competition Council intends to analyse the situation in the dairy market. Head of the Competition Council Šarūnas Keserauskas said that the investigation will not focus on separate violations, however if proof is found then other investigations will be launched over possible cartel agreements.