Currently, milk buyers are once again "crushing" cooperatives

Last week, on April 1, Latvian agricultural experts participated in the forum “Cooperation and Rural Development” in Estonia. At the forum, farmers from all three Baltic countries agreed to jointly seek solutions to strengthen milk producer cooperatives in a crisis situation and prevent milk buyers from “crumbling” them.

In the world of dairy farming, there has always been a “fluctuation” in milk prices. In most European Union countries, there are stable farmers’ cooperatives, which allow them to dictate their own rules in the market and survive difficult periods. In Latvia, Lithuania and Estonia, cooperation has a history of only about 15 years. In the Baltic countries, the market share of milk cooperatives is one of the lowest in Europe. On average in Europe it is over 40%, in Latvia around 30%, but in Lithuania only slightly over 10%. Currently, the situation in the Baltics is particularly unfavorable for milk producers, and various mechanisms are being used to undermine the unity of farmers and stifle the relatively new form of cooperation – cooperation. Individual milk buyers, by random order, offering a higher milk purchase price, conclude contracts with farmers, offering short-term bonuses. This negatively affects milk cooperatives. Currently, it seems that many milk producers have forgotten the 2009 milk crisis, when the difficult situation was carried on their shoulders by milk cooperatives. When making decisions, dairy producers need to think long-term, remembering that the foundation of the global dairy industry is precisely farmer cooperatives, which today hold a large market share.

Edgars Ruža, General Director of LPKS “LATRAPS”, said: "The conference, which brought together the leaders of cooperatives from the Baltic States, was very necessary right now, because the dairy industry needs common solutions. Cooperatives need to start thinking nationally and regionally, they need to optimize milk procurement and processing. If we don't do it in this crisis, we will soon experience the next one."

Silvija Dreijere, head of the livestock department of the Latvian Rural Consulting and Education Centre: "The dairy industry in Latvia will be able to exist stably and hope for growth only if we have developed a strong cooperation. A cooperative is an enterprise created by farmers themselves, which should also be treated as one's own - with responsibility and honesty. Not only should active and open communication with members be maintained within cooperatives, but cooperative leaders and boards should come together to create a strategy for strengthening and developing milk producer cooperation. As a result, milk producers will be strong market participants."

The Deputy Chairwoman of the Association "Farmers' Council" participated in the forum in Estonia Maira Dzelzkalėja, General Director of LPKS "LATRAPS" Edgars Ruza, Chairman of the Board of Trikāta KS Uldis Krievārs, Head of the Livestock Department of the Latvian Rural Consulting and Education Centre Sylvia Dreyer,Expert of the Latvian Farmers' Federation Agnese Hauk and Head of the EU Agriculture and Rural Development Office of the Latvian Rural Consulting and Education Centre Ilva Berzin.

Press release: PRES_Currently, milk buyers are "crushing" cooperatives again