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Friday 20.07.2018 | Name days: Ramona, Ritma
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Latvian dairy industry loses nine million euro per month because of Russian embargo

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUUnder impact from the Russian embargo, reducing procurement prices for Latvian dairy producers cause losses worth EUR 7 – 9 million every month. With that, it is likely that many dairy farms will be forced to close down by the end of 2014, as reported by Chairman of Latvian Rural Advisory and Training Centre Mārtiņš Cimermanis.

According to estimates of the centre, the costs of dairy production in Latvia are EUR 0.27 per 1 kg of milk. Costs of milk vary from farm to farm, usually at EUR 0.22 to EUR 0.35 per 1 kg depending on the size and work efficiency.

«It does not look as though the situation on the market could improve in the near future. Now is the deciding moment for the industry’s future. Farms will not be able to survive for longer than six to ten months at current procurement prices. If the industry does not receive support, there is a high possibility that some of the industry’s members will not make it through winter,» – notes Cimermanis.

He has also said there have been unofficial talks regarding alleged plans of the European Commission’s to allocate EUR 20 million compensation to Baltic region and Finland to cover losses caused by the Russian embargo. «We do not have information as to who is eligible to receive this compensation,» – said Cimermanis.

He also noted that farmers are not well-versed in support mechanisms, especially for countries that are in a state of crisis.

«So far there has only been support to Latvian dairy producers on a national level, allocating EUR 6 million for animal husbandry, covering 70% of costs related to cow productivity control tests. The government is in the middle of consideration of an additional EUR 7.9 million for covering other expense,» – reminded the head of LLKC.

Farming organization had noted at the beginning of September that declining procurement prices and the unclear situation regarding the cancellation of quotas makes the current situation quite difficult.

Farmers have noted that the crisis in the dairy industry needs to be resolved immediately, so that there would not be a sudden wave of 1,000 unemployed persons and bankrupt companies. This has to be done before the situation reaches its peak. Payments for September will be carried out. With that, the real impact on the industry will be felt in the near future.

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