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40-50% of cow's milk is grown by farmers, very soon local production will not cover the needs of factories

2022-08-24 08:38:15Biznes SHKRUAR NGA REDAKSIA VOX

40-50% of cow's milk is grown by farmers, very soon local production will

The price of cow's milk for processing factories is increased by 40 to 50%.

The Association of Milk Processors told Monitor that currently the factories are being supplied by the farmer with milk at a price of 60 to 70 Lek without VAT, from 40 to 50 Lek that was before.

The Executive Director of the Association of Milk Processors, Donjaldo Hoxha, claims that in addition to high prices, factories are having difficulties finding fresh milk, due to the high drop in production. According to him, measures will not be taken and interventions will be made to help livestock, local production will soon not cover the needs of processors.

Hoxha emphasizes that the main reasons for this situation are the decrease in the number of heads, the excessive increase in the costs of farmers to produce a liter of milk and the increasing informality that is making the processing sector more and more difficult every day.

"The situation in our milk processing sector is getting more difficult day by day. Costs have increased in all directions. Specifically, the raw material of milk is more expensive, electricity is more expensive, the price of gas has increased and will be even more expensive after the imposition of the excise tax on July 1, the price of oil and packaging materials has increased. All these added costs have put the milk processing sector in dire straits and a bleak future. The sector risks not being competitive in the market, especially with imported products.

Meanwhile, livestock continues to decline and the number of heads decreases daily. According to INSTAT data for 2021, the number of goats in the country decreased by 3% compared to 2020, the number of sheep decreased by 5% and the number of sheep decreased by 7%.

The representative of the Association of Milk Processors said that intervention by the relevant authorities is necessary, but so far there has been no measure and no help has been given.

"Alone, animal husbandry and milk processing will go towards a dark situation and a certain bankruptcy. Our requests and suggestions remain the same:

Support 10 ALL/liter of milk produced by livestock farmers that is delivered to licensed collection and processing points

6% VAT on sales in the milk processing sector
Direct support scheme in agriculture aligned with the region".

According to INSTAT data, in 2021 the accumulated amount of cow's milk decreased by 7.4% compared to 2020, while the accumulated amount of sheep's and goat's milk increased by 26.3% and 8%, respectively.

While imports and imports of milk for 2021 appear with an increase of about 43% more than 2020. 56% of the total milk abroad is taken up by imports from Italy, 16% of milk comes from Serbia, 14% from Bosnia-Herzegovina and the rest from Kosovo, Macedonia and other European countries. For 2021, the highest increase in milk imports was from Serbia, 71% more than in 2020.

Representatives of the sector have often raised concerns about the increase in production costs due to the removal of the creditable VAT scheme. In 2017, the VAT refund was 20%. Then from 2018 onwards it became 6%, then from 2022 it became 0%.

The VAT on agricultural inputs was 20%, then it became 0% in 2018 and went to 10% in 2022. The new fiscal package of 2022 also added an excise tax of 6 lek per liter for gas, from July 1, exactly at the moment when gas prices are higher in recent years.

Donjaldo Hoxha from the Association of Milk Processors points out that agriculture and the processing sector are a concrete example of how it can be extremely damaged and risked by the frequent changes in the fiscal package.

"Frequent changes to the fiscal package are never a help, but a constant disorientation regarding business activity. It is even more difficult and disorienting for the farmer and the agricultural business, because as soon as they adapt to a certain fiscal policy, it is immediately changed, not giving them the opportunity to develop or plan long-term steps, because the fiscal parameters move from year to year." 


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