The State Announced Measures to Protect Milk Producers

The Ministry of Agriculture, Fisheries and Rural Development is dissatisfied with the decision of milk processors to reduce purchase prices starting March 1, said State Secretary Krešimir Kuterovac at a briefing today.

Kuterovac announced that if processors do not change their decision, the Ministry will take certain measures to protect milk producers. As he stated, the dairy industry has abandoned the tripartite agreement for the first time, which will result in a disruption of relations between producers, processors, and the Ministry. In response to the remark that processors also stated that the Ministry agreed on the last purchase price through last year’s Regulation without them, Kuterovac asked why they waited eight months to react to that. He also added that tripartite talks had been conducted for a year and a half and that no one was satisfied with the last purchase price, leading to a compromise.

The state invests 800 million kuna annually in this industry, prompting Elvira Sterle, president of the Croatian Milk Producers Association ‘Mliko’, to ask whether all previous investments would be wasted due to this decision. Her colleague Josip Inseković, president of the Association of Holstein Breeders, stated that many milk producers could soon be brought to their knees due to forced loan repayments following the latest move by processors.

Stjepan Bistrović, president of the Croatian Association of Milk Producers, warned that if the situation remains unchanged, investors will disappear, and while processors may gain in the short term, they will lose in the long term. Specifically, there will be less raw milk, which will then become more expensive, making processors uncompetitive again. Additionally, as a consequence, thickets will form in meadows, bringing new problems to producers after the adoption of the Agricultural Land Law.

– I would like to tell Croatian consumers that their problem is not the producers, but the processors and traders – said Bistrović. Here, Bistrović mentioned that the pressure on producers from processors has actually been ongoing for a long time, reducing factory premiums for producers by 10 to 40 lipa.

– Right now, processors are asking to sign annexes to contracts with producers, and I advise them not to sign – said Bistrović, adding that a headquarters has been formed to adequately respond to processors. In this regard, Kuterovac stated that milk prices cannot be adjusted solely at the expense of one party, in this case, the producers.

– When the gentlemen managers and employees in the processing industry reduce their salaries by 10 percent, then we can talk about changing purchase prices. Now that we are restructuring agricultural production, this has come to us like a slap – said Kuterovac. He reminded that the dairy industry has been restructured over the past eight years, reducing the number of milk producers from 65,000 to 25,000, while the quantity and quality of milk have increased (80 percent of the milk produced today meets EU quality standards).

After the briefing at the Ministry of Agriculture, representatives of milk processors and the Ministry met, but as Kuterovac stated, he was not optimistic before that meeting. The meeting ended after 5 PM, and as confirmed by the Ministry, both sides remained in the same positions. However, it was agreed that by the end of the week, milk processors would submit their official position to the Ministry and that negotiations would continue the following week, which again opens the possibility for compromise.

As good news, Sterle noted that it is very important that their requests for state incentives have been acknowledged by the Ministry. Regarding the reform of the support system, a new law is expected to be passed by the end of March. One of the positions is that upon entering the EU, rights to subsidies will not be reduced, only that they will be structured differently. It will be sought that after entering the EU, state subsidies remain for a while. (Edis Felić)