The temporary problem of a surplus of dairy products among producers, processors and traders will be resolved by reducing the prices of domestic products in stores in the coming days, to the detriment of processors and traders, while they will try to export some of it. There is still no long-term solution to increase subsidies and abolish or reduce taxes for farmers, following the example of countries in the region and the EU, so farmers will wait a few more days for answers from the ministries of agriculture and finance and the Prime Minister's office before they start protesting in front of the Government building.
These are the results of negotiations that have been held over the past two days between agricultural producers, dairy processors, retail chains and the Ministry of Agriculture.
President of the Agriculture and Food Industry Committee at the Chamber of Commerce Milutin Đuranović He told "Vijesti" that they concluded that the current surplus of dairy products on the market can be most easily solved through increased sales of fermented milk products, namely yogurt.
"With retail chains, of which 'Voli' has already started to apply, we have agreed that a liter of homemade yogurt will cost 0,99 euros, and a liter package will cost 1,39 euros. Dairies have reduced their share of revenue by 50 percent, and retailers have also reduced their margin by the same amount. These prices should last until the end of October, and I believe that during that period we will solve the current surplus of dairy products and normalize the purchase of milk from farmers," Đuranović told "Vijesti".
Imports of dairy products are constantly growing
He stated that the surplus of dairy products appeared predominantly at one dairy, which suspended the purchase of milk from farmers for several days, while other dairies had a smaller surplus and either reduced their purchases slightly or did not purchase at all.
Đuranović says that the surplus of domestic dairy products on the market appeared for several reasons - increased imports, the inability of domestic products to be competitive against imported ones, but also because there was a seasonal increase in milk production by some farmers.
Monstat data shows that Montenegro imported 72 million euros worth of dairy products in the period January - August, which is six million or 9,4 percent more than in the same period last year.
The total premiums for milk production in the Government's agricultural budget for this year amount to 4,5 million euros, meaning that for the best quality and quantity, a farmer can at best receive a maximum of 20 cents per liter as state support.
Đuranović says that the quantitative import of dairy products is 8,1 percent higher than last year.
Competition from neighboring countries has greater support from their own countries
When asked whether it is true that producers from the region have support from their countries for milk exports, which can make it significantly cheaper for them, Đuraković says that this is difficult to prove, but that it is a fact that some of these imported products are cheaper in Montenegro than in retail in the countries they come from.
"A producer in Montenegro, due to its natural characteristics, cannot compete with a producer from Vojvodina or Šumadija, because it has higher costs due to the more difficult production of animal feed. I believe that farmers' demands for increased subsidies and other types of assistance, which farmers in the region already have, are justified; without that, they cannot be competitive. If there is more state assistance, then the prices of domestic products can be lower and compete with these imported ones. For example, food imports are one billion euros, and direct subsidies to agricultural producers amount to 30 million. The deficit cannot be reduced in this way," said Đuranović.
CEFTA allows for import restrictions
He also stated that CEFTA (a regional free trade agreement) gives countries the opportunity, in the event of extraordinary circumstances, to limit the import of food products, introduce protective tariffs or approve additional support to protect domestic producers through four measures, but that Montenegro has not used these measures once in the past 19 years.
"Recent examples are that Moldova has limited sugar imports to protect domestic producers. Serbia has adopted similar measures several times, and in May it also limited the import of dairy products. So, such possibilities exist when you have such emergency situations and market disruptions, but we do not use them. Everywhere in the region and EU member states, the state is the one that solves problems with surplus agricultural products," Đuranović said.
He says that last year, a significant number of dairy cattle died due to Q fever, which were predominantly in the area of one or two buyers.
"They acquired new dairy cows almost simultaneously, and they have now reached full milk yield, which has influenced the growth of production in this period. Also, due to climatic conditions, some of the cattle on farms are still fed grass, not hay, which affects higher milk production," said Đuranović.
He states that the long-term solution is greater state support if domestic food production is to be maintained.
Data from last year's agricultural census, compared to 2010, show that the number of agricultural holdings decreased from 38 to 26 thousand, or by 31 percent, that the number of cattle decreased by 14 percent, sheep by 26 percent, goats by 18 percent, while the only positive results are in pig and poultry farming.
Farmers are waiting for the Ministry of Finance
President of the Agricultural Cluster of Montenegro Boško Miličić He told "Vijesti" that they had spoken with representatives of the Ministry of Agriculture about the main request for increasing agricultural premiums, abolishing excise taxes on fuel used in agriculture, increasing VAT refunds, and exempting or reducing various other duties.
"All of this is what farmers have in neighboring or EU countries. How can our products be competitive with theirs? That's why we organized a warning protest in Nikšić and announced a protest in front of the Government. The response from the Ministry of Agriculture is that they support our demands in principle, but that they cannot respond to them because the amount of money for the agricultural budget depends on the Ministry of Finance. We also wrote to the Minister of Finance, but we have not received any answers for two days. We have been requesting a meeting with the Prime Minister since last year, and they have not responded to us," said Miličić.
He states that the statistics on agriculture - increasing imports, decreasing production - are devastating, and that they will be even worse if there is no significant state support.
"Nothing we are asking for is unrealistic, everyone in the area has it. For example, for the needs of my farm I pay over four thousand euros just for VAT, while subsidies are significantly less. Montenegrin agriculture is at a turning point and we simply need a decision from the state whether they want us to have domestic food production or not. We are not using the CEFTA measures that we can have to support our production. The budget proposal for next year is being prepared now. If nothing happens in the next few days regarding the fulfillment of our demands, we will certainly not give up our protest in front of the Government building," said Miličić.
Councilor of the Civic Movement URA in the Capital City Assembly, Miodrag Đuranović, who is also professionally involved in dairy farming, said that the solution offered by the Ministry is only temporary.
"The ministry must have known that in this autumn period there is always a surplus of milk and that it is necessary to plan what to do with it. The problem of placing domestic products is easily solved, only if the Government has the will to do so. A strategic solution would be cooperation between producers, processors, the Government and the largest retail chains in the country. Today, domestic dairy products occupy at best 20 to 30 percent of the space on the shelves of retail chains, if we provide them with half of the shelf, that is already another matter. Another good solution is secondary display in the form of special refrigerated shelves/display cases, where "let's buy domestic" and the like could be promoted. So, the most important thing is whether the Government has the will to solve this or not," said Đuranović.
"Vijesti" has been expecting answers from this Ministry since last week to questions about whether the expected increase in subsidies for agriculture and other requests is realistic.
The amount of direct subsidies to agriculture in Montenegro amounts to around 0,8 percent of the state budget, while in neighboring countries and the EU it is a minimum of five percent.
Farmers face a choice - giving up or radical struggle
President of the Union of Cattle Breeders of Northern Montenegro Milko Zivkovic He told "Vijesti" that the situation in livestock farming in the north is very bad and that the torture has been going on for 30 years.
"If this continues, we will be left without the little production we have now and without Montenegrin villages. Import lobbies are suffocating us and without significant state support we cannot be competitive with these prices. Support of less than one percent of the budget cannot cope with support of five percent of the budget. We have joined together in an agricultural cluster and we will wait for a response from the Government to our demands in a few more days. We are left with the choice of giving up this business or radically fighting for our rights to survive," said Živković.
Producers cannot put raw milk on the market, they must throw away the excess
Three days ago, a farmer from Kličevo near Nikšić had to spill three tons of milk because his buyer informed him that he was suspending milk purchases. Some members of the public criticized the farmer for spilling the milk and not donating it.
Đuranović states that the law prohibits the marketing of fresh milk due to health risks as it is a perishable commodity.
"A farmer has to milk his cows twice a day, even though he has no one to sell the milk to at that moment. If the buyer cancels the purchase due to excess milk in his stock, the farmer has little choice, especially if it is a large quantity. Most farmers do not have the ability to store or process such a large amount of milk for a long period of time, and they have to free up the containers in which they keep it for the next milking. He can use some of it to feed the calves if he has any, but he has to destroy most of it due to the risk of spoilage," said Đuranović.
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