Farmers: The price of milk on the store shelf must be shared fairly

Since the introduction of the Russian Federation's food embargo in August 2014, milk producers have experienced a sharp drop in prices of approximately 38.5%. A significant part of milk producers is currently continuing their economic activities, selling the produced milk to dairy processing companies below cost, while the prices of milk and dairy products in retail stores have not significantly decreased, as a result of which consumers continue to pay high prices for products. The association "Farmers' Council" calls for the introduction of legal regulation in the near future, as a result of which the selling price of milk would be fairly distributed between farmers, dairy processors and traders.

Juris Lazdins, Chairman of the Association "Farmers' Council": "Fluctuations in the dairy farming sector are recurring regularly and it is not fair to either farmers or taxpayers that every time in such a situation farmers have to turn to the Latvian government and the European Union for financial support." To stabilize the situation, we must jointly seek solutions to improve the situation and build sustainable relationships between farmers, milk processors and traders, as a result of which the beneficiary must be the consumer. Currently, in Latvia, farmers are the most vulnerable link in the chain of production, processing and trade of dairy products and cannot individually fight the dictates of other chain participants. Therefore, a legal framework is needed that would balance the relationships among chain participants. As one of the solutions, we offer a method previously tested in Germany – dividing the price of the store shelf between the parties involved.

It is gratifying that listening ears have finally appeared and a discussion about solutions has begun, but "I believe that the statement by Noras Krūzītis, executive director of the Latvian Food Traders Association, about our alleged proposal to divide the profits between the parties involved is incorrect, because such an option was not raised at all among farmers or the mass media."

Many highly developed countries have chosen to regulate the agricultural sector and thus protect farmers from inadequate price fluctuations, thus demonstrating mutual understanding and maturity among the participants in the food chain. In Great Britain, there is a milk chain code, which stipulates how prices are calculated in different situations and within what period milk producers must notify of changes in milk purchase prices. Similar price regulation methods are also implemented in Belgium, where they exist and are functional. In Germany, on the other hand, since 1951, "Law on the Circulation of Milk, Dairy Products and Fats", Article 20 of which states that milk prices may be regulated.

Similarly, various measures are being implemented in the United States and Canada to address fluctuations in purchase prices in the dairy sector.

Media message: PRes_Farmers_The price of milk on the store shelf must be shared fairly