The crisis hit the production and processing of milk in Latvia
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The Association notes that in early April, the purchase price of milk decreased by 10-15% compared to the beginning of March, and Latvian dairy producers had a significant decline in exports.
"It seems that at the global level, as well as at the level of the EU and Latvia, the crisis is again affecting milk producers, who have already suffered in 2014 as a result of the Russian embargo, and for many years could not recover. Only in the past three years the situation has stabilized a little, and it is becoming unstable again. Milk producers are tormented by fears that the crisis in the dairy industry may repeat, it will be harder than after the Russian embargo", the Association notes.
According to Melnis, it is necessary to develop at the state level a plan that will help to keep Latvian farms afloat, which can provide jobs and contribute to the economy and the state budget. "The crisis is already there, the only question is how severe and long it will be. This is the most appropriate time to reduce the rate of value added tax on milk, meat, bread and eggs", believes Melnis.
Chairman of the Board of the Latvian dairy industry union, Janis Scholks, said that in Latvia, on average, 2680 tons of milk are sold daily. Approximately 900 tons or 33% is used for the production of dairy products for the local market, another 1000 tons is used for the production of export products, and 780 tons of milk are sold outside Latvia.
According to Scholks, it is important to do everything necessary so that the dairy industry survived the crisis with relatively small losses. In this situation, the volume of milk production is practically not reduced, while the demand for dairy products has decreased. As a result, more milk is produced than is consumed. The largest processors in this situation produce more milk powder and butter, which in the EU can be implemented within the framework of the intervention mechanism.
But since the price of milk is too low for interventional purchases (no more than 190 euros per ton), it is necessary to encourage the sale of dairy products on the local market.
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