Milk processing companies have announced that from mid-April, all milk by-products will see increases of 10 to 15%. The reason is related to the cost…
Milk processing companies have announced that from mid-April, all milk by-products will see increases of 10 to 15%.
The reason is related to the price of plastic, the price of energy and gas, the increase in costs from the removal of the refundable VAT scheme, but also the departure of small farmers.
Processors claim that they are in more difficulty than in 2019, when VAT was reduced from 20% to 6%, as with last year’s fiscal changes, from January 1, farmers were charged an additional 10% of VAT on the prices of import agricultural inputs, which were not taxed since 2018.
Processors say that market supply is lower than demand, which they say has led them to face daily pressure from farmers to raise prices.
Removal of small farmers
Halit Bana, a dairy farmer for more than 15 years, today owns only 2 cows from 15 last year.
According to him, the tightening of prices for cattle feed and the imposition of taxes have made it unprofitable to keep cows.
“The cost of the food base increased by almost 10% and it was impossible for me to continue to keep the animals on the farm. Milk started to be traded 25% more expensive. Until a while ago, when I continued to keep them, the cultivation of the land I owned helped me, but now the costs have become unaffordable”, he says to Gazetasi.al, while adding that in such a situation, it is more beneficial for him to work abroad in immigration, in different factories.
The amount of milk collected by farmers in 2020 was 14.8% less than in 2019, according to INSTAT data.
He then emphasizes that the support for livestock through the national scheme is very low and does not come close to the support measures offered by the region. The costs for the farmer are becoming unaffordable, leading not only him but also other farmers to sell their livestock and close their activities.
The head of the Farmers’ Association, Eduart Sharka, affirms for Gazetasi.al that such a departure of farmers who are no longer choosing to work in animal husbandry, who adds that due to the fact that the factories are not able to balance the market, we can face with the lack of local milk.
“The whole world is suffering from a lack of milk supply. Europe has such a shortage mainly because of the weather and a bad year for agriculture. This greatly increased costs and put farmers in trouble.
Due to the increase in costs last year and the lack of demand, many farmers were demotivated and had to slaughter their cows or animals and reduce the amount of milk produced”, the farmer further tells Gazetasi.al Haliti of milk.
The increase in price makes them competitive with imported products
For 2021, milk imports are 8% higher than the period before the Covid-19 crisis. During January of this year, milk imports decreased slightly by 3% compared to the same period last year.
56% of the total milk abroad is imported from Italy, 16% of the milk comes from Serbia, 14% from Bosnia-Herzegovina and the rest from Kosovo, North Macedonia and other European countries. For 2021, the highest increase in milk imports was from Serbia, with 71% more than in 2020.
For processing companies, fiscal changes have created uncertainty in the milk collection and processing market, favoring the import of regional products.
The upward trend of imports started in 2019, when the amended VAT refund scheme was implemented, from the rate of 20% down to 6%.
Milk processors claim that such a move has a negative impact on them as farmers’ interest is increasingly declining. They claim that they are being supplied by farmers with milk at 50 cents per liter, when currently in Italy, the price of milk from farms is 20-30 lek per liter.
