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The Lithuanian parliament, the Seimas, has decided to temporarily set a minimum price for raw milk purchased by processors from dairy farmers. The price controls will remain in effect until 1 January 2017.
Lithuanian parliament sets minimum milk price but processors oppose move
© Komandos nuotr.

Raw milk buyers and processors will now be required to pay raw milk providers no less than €165 for a ton of milk. These middle-men will be required to pay no less than €130 per ton of basic milk to raw milk producers.

However, milk processors are seeking to stop the Seimas adopting the amendments to the regulated price of milk by approaching the Committee on Rural Affairs, asking for the elimination of price regulation.

Lithuania's Competition Council also said that such a decision could be contrary to the Constitution. The law will come into force if it will sign the president.

Agricultural cooperatives for which no less than 50% of their income consists of their members' work will be allowed to set the basic price for 1 ton of basic milk in according to the cooperative council's decision.

The legal amendment also includes sanctions against violators of these rules.

“As the global milk crisis continues, the dairy sector is experiencing tough times. I am glad that the members of the Seimas understand the complexity of the situation and want to help dairy producers. Until now, there were no minimum raw milk purchase prices, so milk processors were able to abuse this situation. With the new law, which will only be active until 1 January 2017, until the dairy sector stabilizes, we will have minimum prices for raw milk. In this way, we will ensure that there won't be any abuse,” said Seimas and Labour Party member Jonas Kondrotas, who spearheaded the legal proposal.

Small dairy producers currently receive an average of 14.7 cents per litre of milk, while others receive about 16 cents.

“Currently, the situation for dairy market participants is difficult not just because of the global milk crisis, but because of the Russian emargo. Therefore, I am glad that Virginija Baltraitienė, the minister of agriculture we appointed, was able to help them significantly. Over the last two years, she has fought for more than €70 million for dairy farms, and worked to compensate their losses from the embargo by opening new markets and increasing the aount of exports. The Labour Party's proposal will also significantly contribute to the solution of this problem,” said Kęstutis Daukšys, the head of the Seimas Labour Party faction.

Bronius Markauskas, deputy chairman of the Chamber of Agriculture, said that the Seimas' decision to set minimum prices for milk will have a negative effect on large dairy producers and may increase their losses.

According to the heads of Vilkyškių Pieninė and Rokiškio Sūris, the new law will hurt both small producers and processors. According to them, the law will hurt small producers because buying milk form them will no longer be worthwhile.

93 members of the Seimas voted for the amendment, none voted against it, and one abstained. The law will be in effect from the day it is ratified until 1 January 2017.

LRT

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