Associations of meat and dairy products processors asked the government to develop a program to support the industry

This was announced by the HEAD of the Union of Dairy Enterprises of Ukraine (SMPU) Vadim Chagarovsky at a press conference at the Interfax-Ukraine agency on Tuesday.

“The level of state support for animal husbandry, and I emphasize that we all cooperate with our partner livestock breeders, at the level of UAH 1.2 billion does not meet the needs of the development of both dairy cattle breeding and the dairy industry,” he said.

According to the head of the SMPU, the crisis in the industry is characterized by a decrease in MILK production by 5.6% in the first half of 2021 compared to the first half of 2020, the number of cows - by 5.8%, to 1.67 million heads, a decrease in milk received for processing milk - by 12%. He clarified that the production of butter, cheese products, skimmed milk powder and casein decreased the most. The negative trend was exacerbated by the growth in the specified period of imports of dairy products from $140 million to $165 million in monetary terms.

Leonid Tulush, head of the expert and analytical service of the SMPU, noted the need to develop policy documents to support the dairy industry, since its share in the food industry of Ukraine has decreased from 17% in 2010 to less than 10% in 2020. He clarified that the theses given in the agrarian block of the current National Economic Strategy until 2030 are correct, but the document does not contain a specific strategy for the development of the dairy industry.

“It should be taken into account that over time, milk from the population will not be present in milk processing at all. Indeed, since 2024, new standards have been coming, when the processing will finally refuse milk from households due to its non-compliance with standards, which, by the way, will be tightened. Accordingly, we need a policy document on how to survive in such conditions,” Tulush noted.

He recalled that 10 years ago, milk from the population was the main raw material for processing enterprises, but after 2024 this source will become inaccessible. According to Tulush, the state does not implement any transformation incentive programs for those households that want to engage in the dairy business, there is no transformation of households into family dairy farms, and the mechanism for cooperation between farms has not been implemented.

Tulush specified that the absence of program documents, first of all, creates some nervousness in the dairy processing market. In addition, an important factor was the increase in prices for dairy raw materials - in June 2021, raw materials of the “extra” class rose in price by more than 20% compared to June 2020, while dairy products, depending on the type, by 10-15%

“After the special subsidies were taken away from us (the preferential special VAT regime that was in effect until January 1, 2015 - IF), no effective tool was offered. In 2017, quasi-accumulation was proposed, but, unfortunately, poultry farmers received the bulk of the money there,” said the representative of the SMPU.

Tulush stressed that this year the state has allocated more than UAH 1 billion to support livestock breeding, but the budget for this area includes such types of animal husbandry as beekeeping and poultry farming, respectively, the dairy industry cannot count on significant state support.

According to him, the amount of the established annual state support for all agricultural enterprises in 2021-2024 is UAH 4 billion, and these funds will not help the dairy industry overcome the ongoing crisis.

“With this press conference, we would like to continue our constructive cooperation with the government, and indeed form the necessary tools. In autumn, the formation of the budget for 2022 begins, so we hope for the support of the authorities in this matter, because otherwise, in two years, support for this industry will no longer be needed,” the representative of the SMPU emphasized.

In addition, the head of the SMPU recalled that earlier the Minister of Agrarian Policy and Food Roman Leshchenko proposed to allocate 1% of Ukraine's GDP to state support for the agricultural sector. Chagarovsky clarified that state support in the specified amount should be planned in the state resolution until 2024, since the dairy industry requires long-term investments, and the support provided in 2022 will give the first results, at least in 2025.

“We appeal to the government: please hear us. We are ready to help, let's create together with you a national program for the development of cattle breeding and the dairy industry,” Chagarovsky summed up.

As reported, the resolution adopted by the Cabinet of Ministers in May 2021 expands and improves state support for the development of animal husbandry and processing of agricultural products for 2021, UAH 1.15 billion is provided for the implementation of the program.

Interfax.com.ua