The idea for the interventions of powder milk is fundamentally incorrect - Arkadiy Ponomarev

In late October, the Russian Government expanded the list of dairy products in respect of which they plan purchase and commodity interventions. In addition to butter, dry whole and skimmed milk powder the range of purchases includes drinking sterilized milk, three kinds of cheese: hard, semi-hard and super-hard with no taste fillers. New types of powder milk with different fat content were added.

According to the plan of the Ministry of agriculture, the expansion of the list of dairy products that can be procured will provide access to alternative distribution channel, not only to farmers but also to processors. With the help of procurement the Department expects to reduce seasonal price fluctuations for raw milk. In some regions they reach 20-25%. It is projected that the implementation of the mechanism will support the profitability of the industry workers in their difficult periods and stabilizes retail prices in the consumer market.

Milk interventions have never been conducted in Russia, although the discussion is very long and the government came close to start the mechanism in 2010. At this time, the start of milk interventions is scheduled for the beginning of 2017. They will be carried out in nine regions, where the indices of seasonality of milk are most represented: in summer there is a lot of milk and it is cheap, in winter there is little milk and it is expensive. In addition, the regions should have free drying facilities, and there are not many of those in Russia.

Despite the enthusiasm of the Ministry of agriculture, industry community perceives the initiative ambiguously, as it is noted in a press-service of the MP Ponomarev. The closer the starting date of the interventions, the livelier the discussion is. And while some see an effective mechanism to support the dairy industry in them, others believe that interventions will result in "wasted" funds from already meager budget.

– The idea of dairy interventions is fundamentally wrong. How is it possible to talk about interventions, if even according to official data, the shortage of raw milk is estimated at 30% – said a member of the agricultural Committee of the State Duma Arkadiy Ponomarev. – The government spends billions of subsidies for the construction of farms, breeding of cattle, because we have a shortage of raw materials and finished products; there is no surplus yet... But it has been already approved, how to distribute them. And it also costs the budget a lot to compensate the enterprises the production of sterilized milk, production of cheese, to provide storage facilities. What is the feasibility of all this? And, in fact, what milk should enter the fund? Produced in Belarus? After all, its share on the Russian market is dominant. More than 60% ... The Interventions will be performed on Belarusian milk. So Russia will support not domestic, but foreign, albeit friendly, producers and processors.

When talking about the support of milk processors, there is already a thoughtful, efficient mechanism, elaborates the MP.

– Compensation of negotiable percentage for the purchase of raw milk really works. These funds just go to stimulate production of milk-consuming products such as butter, powder milk, cheese, – says the expert.

He focuses the attention on the fact that due to the lack of milk in the country there is a huge amount of milk substitute and counterfeit.

- What kind of cheese is the Ministry of agriculture going to take for intervention? The one that contains palm oil? asked the expert. It's not a flavor, which according to the idea of the government is forbidden to "log in" to the intervention Fund, but an integral part of the product, the most popular MFS (milk fat substitute).

The Deputy is surprised by the introduction of freeze-dried milk to the list of goods for intervention.

– In Russia, as far as I know, no one is involved in freeze-dried milk production. Obviously, it is foreign milk that is going to be innervated. Then where is the support of domestic industry? I think there are too many contradictions to start the mechanism, – says Arkadiy Ponomarev.

The problem of seasonality, which the Ministry of agriculture refers to, is primarily the matter of competent management, technological solutions, states Arkady Ponomarev.

– It is necessary to work on it, change the outdated structure of production. It is clear that this is not a fast process, but domestic producers need to survive today. So why not forward the seasonal surplus on social programs as an alternative? After all, our primary goal is not preserving for any case, but the stimulation of consumer demand. It is the stable demand that will keep the sustainability of production, processing and trade. It will maintain the level of consumption and increase tax revenues to the budget. The options of these programs are grocery cards or purchases for budget purposes. It is the same intervention, but with a guarantee on the outcome, – concludes the expert.

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