TALLINN – In order to save the Estonian dairy herd and support farmers, a possibility must be created to produce milk powder, butter and cheese for stockpiling while paying farmers for the milk at once, chairman of the Riigikogu finance committee Aivar Kokk said on Wednesday.
Kokk said that decisions have to be made fast to prevent the sale of dairy cattle abroad like happened during the crisis of 2013-2014.
"Estonia's dairy herd numbers about 80,000 at this point and the daily milk output is approximately 2,000 tons, of which 400 tons is exported to Lithuania and 200 to Latvia," Kokk said in a press release.
The Isamaa MP said that while it's important for farmers that the price of raw milk would not drop below the cost price of 300 euros per ton, the price has declined already to 260-270 euros a ton for the month of May.
"Therefore we need to act fast to prevent a reduction in dairy cattle numbers and a wave of bankruptcies of farmers," he said.
As a potential way out, Kokk put forward a so-called stockpile financing measure whereby the state would create a possibility for the production of milk powder, butter and cheese for stockpiling, while farmers would get paid for their milk. He said that the Estonian agricultural registers and information agency PRIA possesses the capability to start stockpiling of output within 24 hours.
Also the European Commission's Directorate-General for Agriculture and Rural Development is expected to endorse the prices of so-called intervention purchases in the next few weeks.
"The aim is to maintain at last the cost price for milk producers," he said.
The MP added that at the moment the transport capacities of Estonia's dairy industry companies may prove a bottleneck.
"The Chamber of Agriculture and Commerce should take the initiative now to find solutions in collaboration with the Ministry of Rural Affairs, producers, processing companies and transport companies when it comes to the dairy industry's production capacity and transport. Estonian farmers and companies active in rural areas must be supported during the crisis," Kokk said.