Lithuanian dairy firms have terminated contracts with Latvian dairy farms amid a Russian ban on food imports from the West.
Lithuanian firms now claim there is an overproduction of dairy products and no export market after Russia announced it had placed sanctions on food products crossing its borders.
Sandra Stricka, head of the dairy group Latvian Agricultural Organization Cooperation Council said producers should quickly seek new export markets as the Latvian market is too small for local production.
"Several farmers report that Lithuanian companies are terminating their contracts with Latvian farmers, while prices for milk are falling," Stricka said.
She added that the government and EU institutions should find a solution on how to improve the current situation and seek new export markets for local farmers.
Deputy CEO of the Latvian Agricultural Organization Cooperation Council, Armands Krauze said that the government should lobby farmer interests in an effort to secure compensation payments from EU funds.
"We must prevent another crisis scenario, when farmers were able to receive the EU aid only in two years after the crisis was over. The funds should be requested from Brussels, as it would be wrong to use Latvia's budget funds which are required for other social groups," Krauze said.