Pridnestrovie to levy special customs duties on import dairy product

05/21/15 15:15

Pridnestrovie to levy special customs duties on import dairy product

This measure aims at protecting local producers
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The situation in the livestock and, in particular, dairy stock farming was discussed at the Ministry of Agriculture with the participation of MPs, representatives from processing industry and manufacturers.

The critical situation in the industry has led to this meeting: because of the devaluation of hryvnia and leu, Moldovan and Ukrainian dairy products imported to Pridnestrovie have fallen in price so much that local product has become quite uncompetitive. Accordingly, both sales and production volumes have also dropped.

«This January we produced by 48,000 tonnes less milk product, in February by 65,000 tonnes, and in March by 125,000 tonnes. And in April the decline amounted to 203,000 tonnes or in terms of money 3.318 million roubles. As a result, since 20 April we had to reduce the procurement price for milk (raw material)," said the director of the Tiraspol milk factory, Stanislav Panasyuk.

In the end, local farmers are paid from 2 to 3.5 roubles per litre (instead of former 4 — 5). It does not yield any profit, making the production quite unprofitable. «We are paid 1.5 rouble per litre instead of 2 roubles, in other words I have to sell a few litres of milk to buy a loaf of bread. And I have three children," said Yuri Tvilenev, a farmer.

«If selling milk at 2 roubles per litre, I don't have enough money to repay the credits and pay for electric power, let alone something else. Even if I sell all my cows for meat, I will be able to repay just one credit, because now a cow costs $300 — 400, and I bought them on credit at $800 each," added his colleague Ivan Butuk.

The manufacturers underscored: just a little longer and the milk production would drastically decrease right up to complete halt. The ministry said that, even before the reduction in prices took place, the manufacturers provided just 30−40% of the population's needs in milk production. If the corresponding measures were not taken and the control of the situation was lost, Pridnestrovie might run short of its own milk products.

To avoid that, the decision has been taken to levy special customs duties for import milk production. «According to preliminary estimates, extra charges will make $0.15 per litre. It will be higher for more fatty products such as sour cream, cottage cheese and butter. For instance, the charge for butter may amount to $1.5 per kg. These are not final figures. They may change in the process of final decision-making," remarked Dmitri Boltrushko, a deputy minister of economic development.

According to him, the corresponding draft of the government's decree has been agreed upon with all the ministries and agencies concerned and before long will be submitted for consideration to the government. The decree is supposed to come into force within the following several weeks.

«Because of the duty, the price of import milk product will rise to the local level, that is, we will secure the price competitiveness of Pridnestrovie's goods. Above all, it will help to support local manufacturers and keep means of subsistence for nearly 20,000 people engaged in this industry across the republic," said the minister of agriculture and natural resources, Andrei Kirsta.

The government, in turn, will demand certain commitments from all those who are engaged in milk production and processing. «For example, we will expect processing factories to cut expenses (where possible) and increase the procurement price for milk supplied by local manufacturers," said Dmitri Boltrushko.


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