Dairy producers in a losing battle with imports

02/08/2012

Over the past three years, 5,000 milk producers in BiH have given up their business because of competition from abroad and lack of support for their industry from politicians.

By Bedrana Kaletovic for Southeast European Times in Tuzla -- 02/08/12

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Dairy farmers in BiH say they’re being shut out of the market by cheaper foreign imports, and the government hasn’t taken action to assist them. [Bedrana Kaletovic/SETimes]

It is easier and less expensive to produce milk and milk products abroad and import them to Bosnia and Herzegovina (BiH) than to do so within the country, a situation that makes farmers increasingly uninterested in breeding cattle and producing milk, according to the Association of BiH Farmers.

"The decision to implement a veterinary tax, which requires BiH producers to pay 256 euros for an examination of [milk and dairy] exports, while foreigners pay only 24 euros to import the same, has not been changed in a year," Vladimir Usorac, the president of Association of Agriculture Producers of Republika Srpska, told SETimes.

As a consequence of the higher cost for domestic producers, BiH loses 13m euros yearly, Usorac said.

Dairy farmers said they are displeased with what they call a lack of attention from BiH politicians as their market is taken over by regional and EU imports.

''I get 21 cents for a litre of milk and 7 cents in government assistance, while a litre sells for 72 cents in the stores. This is too little," Enes Hasanovic, a member of the association, told SETimes.

Hasanovic said that on top of the very small profit margins, BiH politicians have not yet voted to establish a protected minimum price.

"The producers are not protected and many, like me, do not want to sell the milk to the government for next to nothing,'' he said.

“I fully understand the dissatisfaction of farmers due to the delay in the implementation of incentives. The FBiH Ministry of Agriculture and the government are open for talks with producers. We are aware that the costs of incentives are not sufficient, but we can not accept requests for larger price of milk,” FBiH Minister of Agriculture, Water and Forestry Jerko Ivankovic-Lijanovic told SETimes.

Some dairy producers in the region said they face similar problems. The milk repurchasing price in Croatia is the highest in the region, 12% higher than in Serbia or BiH, but is still not enough to earn producers more than minimum profit.

In the past three years, 5,000 milk producers in BiH have given up their business.

''The average repurchasing price of raw milk in the EU is 40 cents per litre. We are supposed to be satisfied with half that and also be happy if the government pays even this low amount, given that payments are always late," Vinko Simic, a farmer from Croatia, said.

BiH imported over 76,000 tonnes of milk and dairy products worth 84m euros last year.

Serbia and Croatia are the main suppliers, but the raw material is often imported to these countries from elsewhere first -- such as from Romania and Poland.

''Our farmers are perishing, many throw the milk out because it is not worth selling it. Nobody seems to care in BiH about this while the trade lobby works hard so that milk is imported and sold here in great quantities," Hasanovic said.

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A lack of awareness on the part of consumers to buy domestic products also fuels the dairy producers' plight.

The relevant ministries claim they are making efforts through an assistance policy to help producers, but the producers said the government has failed them.

''There is no strategy in place to support local production and the producers are too weak to counter the powerful European industry,'' Vjekoslav Jovic, director of a dairy plant in Teslic, told SETimes.

Animal-based food can be exported to the EU only if the country has established food controls according to the EU's 2006 model, and production facilities must be approved by the Office for Food and Veterinary Medicine in Dublin.

This content was commissioned for SETimes.com.
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