RIGA - In one of the most unusual protests in recent years approximately 1,000 Riga residents showed up in Dome Square on May 30 to support dairy farmers and load up on free milk.
Four dairy trucks rolled onto the historic cobblestone square as part of a protest against, in the words of organizers, "unregulated appetite of retailers and the inefficiency of milk processors."
The trucks' operators then began pouring out free, non-pasteurized milk to draw a large crowd and win over public sentiment for their cause. Pensioners were particularly prominent, showing up in large numbers and with empty plastic bottles.
Protesters blasted Agriculture Minister Martins Roze and called on the government to intervene in the dairy market lest Latvia lose its milk industry altogether.
Milk cow farmers are angry at the recent decline in the purchase price of milk, which they claim has made milk production unprofitable given higher costs for energy and feed.
Currently dairy farmers get approximately 0.22 lat (0.31 euro) per liter, while the cost on store shelves is 0.55 's 0.61 lats.
One Valmiera dairy farmer was quoted by Bizness & Baltija as saying that she gets only 0.17 lat per liter even though it costs her 0.22 lat to produce it.
When packaging, storage and refrigeration are factored in, both producers of milk and the stores in which the milk is sold receive a profit of about 0.01 lat, according to one report.
Last year dairy farmers received significantly more for milk, but toward the end of 2007 prices started falling precipitously, not just in Latvia but throughout the Baltics. Some have raised suspicions of a cartel agreement among milk producers.
Eurostat, the official EU statistics agency, reported on June 2 that consumer prices for milk, cheese and eggs skyrocketed 34.3 percent from April 2007 to April 2008. This was the second highest result in the 27-member bloc, behind Estonia, where the same prices soared 35.4 percent.
With that kind of inflation, some Baltic dairy products have surpassed western equivalents.
Currently the price of butter in Latvia is over 1 lat for 200 grams, whereas in Germany it is 0.90 lat.
Dairy farmers warned that their only choice may be to export to other markets. However, the EU currently places restrictions on dairy exports to foreign (non-EU) countries.
Janis Stakens, director of Maxima stores in Latvia, pointed to inefficiencies as the cause of the high milk prices.
"We produce milk in Latvia ineffectively. The average size of a dairy farm is barely 20 cows. This kind of production structure is expensive and can't be compared to, let's say, Germany's prices."
In his words, "You have to understand that a 20 cow farm isn't a business. When our farms are as big as Germany's, then milk will be as cheap as in Germany. The smaller the scale, the more expensive the production process will be. This is not only for milk but for any production process."
Still, dairy farmers are being gouged by runaway inflation in Latvia, which in April reached 17.5 percent annually. "You can call this inflation normal but something must be done to stop it," one dairy farmer said at the demonstration.
He went on to say that there is an open dialogue between the farmers and the Greens and Farmers Union, a ruling coalition party, and he hoped that they would be able to find "the light at the end of this tunnel" to allow milk production to go on as before.
