Ukraine dairy farmers seek state aid

02-10-2020 | |
Photo: Mark Pasveer
Photo: Mark Pasveer

The Ukraine government urgently needs to act to support the domestic dairy industry and prevent a slump in production performance, Vadim Chagarovsky, chairman of the Ukraine dairy enterprises union said in a statement.

The dairy industry is on the brink of a deep crisis and needs to be protected from overwhelming imports, Ukraine farmers claimed during the All-Ukraine Dairy Forum held in Kyiv on 25 September.

Photo: Mark Pasveer

Photo: Mark Pasveer

In 2020, the total number of dairy cows in Ukraine amounted to 1.7 million, which is a record low, Chagarovsky said. The Covid-19 pandemic delivered a hard blow to the country’s dairy companies, hampering the demand for dairy products in the retail segment and reducing the population’s purchasing power. The present situation in the Ukraine dairy industry is critical, Chagarovsky added.

The dairy business lost consumers and resources, which it could have got from sales,” Chagarovsky said.

Chagarovsky called on the government to strengthen measures against counterfeit products on the domestic dairy market and issue subsidies for export supplies. Additionally, Chagarovsky argues that Ukraine retailers should be obliged to pay for dairy products from farmers within 14 days of product delivery.

Due to the Covid-19 pandemic, a fall in consumer demand, and a draught, almost all farmers are currently operating on the brink of profitability, according to research conducted by Kyiv-based think tank Infagro. This situation could lead to a drop in raw milk production and a jump in import supplies, Infagro said.

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Comprehensive industry development programme needed

“We need a comprehensive industry development programme. All officials support this idea. State support shrank by a factor 2 [in 2020], so we currently have UAH 4 billion [US$ 221.5 million]. I hope that a relevant Ministry will be established to deal with the problems our industry faces,” Chagarovsky said.

The programme could oblige all agricultural companies to invest in the dairy industry or pay a certain fee. According to Chagarovsky, the Ukraine dairy enterprises union wants the government to determine a minimal number of dairy cows all agricultural companies must have per 100 ha.

We would like to set it at 24 cows per 100 ha for agricultural holdings. If you don’t want to be engaged in the dairy business – that’s fine,” Chagarovsky said.

He added that a similar policy is currently applied in neighbouring Poland, where the minimum number of dairy cows is set at 26 per 100 ha of agricultural land.

Vladislav Vorotnikov Eastern Europe correspondent