Corn Goes to the Free Market, Milk and Meat Prices Should Fall?!

The Ministry of Agriculture, Fisheries and Rural Development announced an initiative to amend the law regarding subsidies for corn at a press conference. This is the result of discussions between the Ministry and the Council for Monitoring the State of the Grain Market, which consists of producers, processors, buyers, and experts.

As stated by State Secretary Krešimir Kuterovac, two models of state influence on the corn market were discussed. According to the first model, the state was to retain the right to set minimum corn prices, šro would be 0.73 kuna per kilogram, and provide subsidies of 1,750 kuna per hectare. The second model envisaged total exclusion of the state from price regulation and leaving their formation to the market, but with a subsidy amount of 2,250 kuna per hectare. This model would also mean that only producers would receive subsidies, and import duties would be 8 percent for EU countries and 16 percent for others.

– After analyzing the proposals, the second model was accepted, and I believe that we will thus align the domestic and European corn markets. The amount of subsidies would increase by 250 million kuna. This model will not only benefit farmers through subsidies but also buyers, processors, and consumers through market competition  – said Kuterovac.
This will give the domestic corn market more dynamics, and it should not be forgotten that Croatia currently has about 300 thousand tons of surplus corn. However, since corn is cheaper in Hungary and Serbia than in Croatia, a price drop is expected, especially in light of the fact that these countries have a total of eight million tons of surplus corn.

The President of the Association of Farmers of Slavonia and Baranja, Antun Laslo, stated that they are not satisfied with either model but chose the lesser evil. He proposed that the state set a minimum price of 0.75 kuna per kilogram and subsidies of 2,250 kuna per hectare. He also criticized the Ministry for neglecting the fact of insufficient storage space and added that the 8 percent duty on imports from EU countries is too low.

– I think we will have to stand at the border and defend corn imports ourselves if the Ministry does not take action. Also,  I have been suggesting for years that the Ministry create a balance like other European countries, so we will not have surpluses – said Laslo.

The President of the Croatian Peasant Union, Darko Grivičić, was also not very happy, but he noted that those who sow corn for their livestock’s feed will not feel the changes, only those who market it. He believes there will be a breakdown among them, as some will not survive, and the real question is what will happen to large companies that have invested significant resources in corn sowing.

As Kuterovac concluded, this is just the first step, and the Ministry plans a set of amendments next year that will allow other agricultural crops to enter the free market. The Secretary of the Association of Farmers of Slavonia and Baranja, Stanko Zdravčević, added that this should reduce the prices of meat and milk by up to 50 percent, considering that corn makes up 70 percent of feed in livestock farming, but he remained skeptical about that possibility. (Edis Felić)