Prime Minister Algirdas Butkevičius has met with dairy producers and promised to inform them in two weeks how the state could assist the dairy production cooperative Pienas LT, enhance possibilities for cooperation of farmers and boost competitiveness of Lithuania's dairy sector.
© Bendrovės archyvas

"Dairy production organisations are emerging sluggishly in Lithuania, therefore the completion of founding of the company (Pienas LT - ELTA) would be an example to other cooperatives in Lithuania," Prime Minister Butkevičius said at the meeting with milk producers.

The total value of the facility, which exports all of its produce, is EUR 41 million. However, what is hindering the cooperation of farmers is the dairy sector's inefficiency and substantial decline of milk purchase prices. Milk purchase prices in Lithuania fell at the highest rate among all European Union (EU) member states.

Naglis Narauskas, the Chairman of the Board of agricultural cooperative Pienas LT, said that other countries were better prepared for the suspension of milk quotas. According to him, since then Poland increased its dairy production 11 times more than Lithuania, mostly because it had taken care of vertically integrated cooperation, something that Lithuania lacks.

Chairman of the Lithuanian Milk Producers' Association Jonas Vilionis said, "The European Union allocated more than EUR 12 million to cover damages of dairy producers. EUR 12 million more was provided from the state budget. The funds were distributed to farmers and then what? Milk prices are not increasing after all."

Chairman of the Chamber of Agriculutre Andriejus Stancikas emphasised that Pienas LT plant is an unprecedented cooperation project, the plant is capable of processing 650 tonnes of raw milk per day.

"Clearly, the plant will process so much raw milk that it will affect the dairy sector. Other operational milk processing facilities will have to compete with Pienas LT for the raw material and this will be beneficial for dairy producers, because in the near future raw milk output will not increase in Lithuania," said Stancikas.

Chairman of the Lithuanian Farmers' Union Jonas Talmantas stated that if the Government and the Ministry of Agriculture did not support the Pienas LT project, it would clearly demonstrate that the government cares neither about dairy producers nor the added value created by the agricultural sector.

Agricultural cooperative Pienas LT unites over 200 milk producers. They supply the market with approximately 360 tonnes of raw milk daily. In 2014, Pienas LT turnover was EUR 45 million.

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