05.04.2022
Today, raw materials for the dairy industry are largely provided by subsidiary farms, small farms and a quota of 5,000 tons of raw milk imports, because the farms of the former USSR that existed in most rural areas of the country no longer exist. Like other areas of agriculture, the dairy sector is underdeveloped, dominated by households that produce more milk for their own consumption and sell surplus milk to collection centers or agri-food markets in the country. We spoke with Karolina Linte, Executive Director of the Dairy Producers and Processors Association "Moloko", who fully analyzed the situation in the industry.
What are the main needs of the livestock sector in Moldova?
Unfortunately, we have a situation inherited from privatization, when farms were limited in ownership of land, and for the livestock sector, it is important to provide either milk or meat with raw materials, at least from a hectare or two, depending on the region, to ensure the procurement of fodder, and those who suddenly became owners or owners of arable land no longer want long-term investments in this area. Every year we see a downward trend in terms of the number of heads of animals, as well as in terms of productivity per animal. Of course, we can increase the number of animals to subsidize this aspect, with a special more intensive program needed, especially at the beginning of the business, but if we have a productivity, like now, of 3656 kg liters per animal, we will not get profitability. Even if we finance this sector, I believe that without modern technologies we will not stimulate the development of new enterprises that will go bankrupt, will not survive, and will further discourage investment in the livestock industry. I believe that it is necessary to apply modern technologies and knowledge in the field of animal breeding and feeding, an activity in which it is necessary to involve not only the farmer, but also state institutions involved in animal husbandry. I believe that the scientific part should be provided by the state, agricultural departments at city halls or, as AXA used to have specialists in this field, because a farmer starts a business, but he needs knowledge, training to ensure the prosperity of the business. Currently, starting a business is difficult, since the farmer does not have financial resources, and the terms of credit and collateral provided by commercial banks are practically unacceptable for starting a business in this area.
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If you were to report to us in quantitative terms, what is the current situation in the livestock sector?
In December 2020, I submitted a letter to ANSA, which, in accordance with Law No. 231 of 2006, maintains an animal registry and received data on the number of dairy cattle kept on authorized farms, and found that we have 12 thousand heads, which is a very a small figure, and the number of dairy cattle on farms is 76,000. We have updated the information, today we have 14 thousand heads in farms or farms authorized by ANSA, and about 71 thousand heads in households. What we see on the statistica.gov.md website is not entirely true, since farms with 3-4 to 21 heads provide data only once a year, so the data for 2021 will only be updated in the first quarter 2022. Therefore, ANSA must post on the official website of the institution the number of authorized farms or enterprises, which, unfortunately, is always discussed, but has not been reached to this day. This detail is important not only for us, the Associations that ensure accountability, traceability, animal health and welfare, but also for donors who want to see what the Republic of Moldova has for the growth and development of the livestock sector, i.e. the actual official number of animals confirmed by the competent authority ANSA.
Although we are an agrarian country, the import of dairy products and raw materials is increasing every year...
As for raw materials, I can say that any liter of milk is bought for sale and a lot of it is actually imported. In the private sector, most of the collected milk is processed into everyday products (lactic acid), part is sold at unfavorable prices. I can tell you that all processors are obliged to look for milk in the villages of Moldova, purchased through collection points, which are partly organized by the processors themselves, partly by intermediaries, and partly located in the area where there are households. y Where dairy cattle are bred. Recently, I spoke with all the directors of milk purchasing institutions, who informed me that in 2020 the price of milk in farms ranged from 5 to 6.50 lei without VAT, to which 8% is added, in households it was 4.25 - 4.75 lei. This year we have an increase, in farms we have 6-6.80 lei, and in households the price has increased between 4.75-5.00 lei. At the same time, the price increased by 5%, with a per capita productivity of 3675 liters, which is quite a bit compared to the productivity of neighboring countries, where it is 7-9 tons of milk per animal. Therefore, our products will still not be competitive, no matter how much the processor raises milk prices, which he really cannot raise much, compared to the competitiveness of the mass imports that currently exist. The share of imported dairy products, which was increased in 2019, is 2 thousand tons excluding taxes, previously the first five years was 1.5 thousand. Almost the indicated amount of dairy products is imported and sold by retail chains, including processors, until March-April. Otherwise, we have imports from neighboring countries, Ukraine, Belarus without any duty that comes from the EU reducing duties on some groups of dairy products, after the quantity is ready, it is imported at a rate of 10-15% in dependence on dairy products. a product such as powdered milk is taxed at 10%, while concentrated cream or UHT milk is taxed at 15%.
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Do we produce tasty products and, according to statistics, more quantitatively, but do they remain in the country or are they still exported? Recently, the EU gave the go-ahead for the export of dairy products from Moldova, which one?
A major exporter of dairy products is the Soroca plant, which exports to the Russian Federation and CIS countries, especially cheeses. We still have an export product, but listed as a milk-based product, i.e. ice cream exported to the Gulf countries, but because we do not have a direct route through the EU, but through Ukraine, as well as due to the impact of COVID 19, exports decreased both last year and in 2021. That is, the volume of domestic production is increasing by 2.3%, an insignificant figure representing processed products, which were less consumed in schools due to the pandemic, non-purchase auctions were organized, so this increase was received, which is not so big. Unfortunately, we are not producers of value-added products, such as cheese, we are producers of dairy products, where the profit is very low, about 4-5%, practically the sector develops due to the fact that there is a constant exchange. If we look at per capita consumption, we see that it is not growing, being stable for years in a row in the range of 190 -196 kg, in relation to the population, we understand that the processing industry or the consumption of dairy products will decrease if we do not we will replace imports with the diversification of the country's processing portfolios. Consumers will look for imported products because they are more competitive in terms of price, labeling and shelf life. We at the Association have compiled a list of local products that, according to Law no. 225/2021 Amendments to the Law 231/2010 on internal trade must place at least 50% of local products on the shelf and from the data we obtained from the statistics for 2018-2020 we have a decrease in consumption Consumption of fresh cheeses and butter remain stable and fermented milk products, kefir, cream, cheeses and cheeses increase slightly. In numbers, this will mean that in 2018 we had a consumption of 1983 tons of cheese, in 2020 - 2290 tons, that is, consumer preferences for a local product are increasing, although we have always had bulk imports from Ukraine, about 40% of cheese, where there are also counterfeits or brand names of dairy products, such as "cheese product" in which milk fats are replaced with vegetable fats or a combination of dietary fats.
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What Moldovan dairy products are already available in EU stores?
After all, this year Moldova was included in the list of exporters of dairy products. We have European Regulation No. 605 of 2010 in the annex, column 3 (C), (A; B) the first two refer to products that go through the same pasteurization process. The third category includes products for which a double pasteurization process is used, which makes it possible to obtain a product that is safe from a microbiological point of view. UHT milk is also included in this category, a temperature of 146 degrees is applied to it and cooled to a temperature of 20 degrees in a few hours, we are talking about skimmed and dehydrated milk, powdered milk that undergoes pasteurization and dehydration, but also concentrated milk, to which it is applied a more complex sterilization process that is very safe. Thus, Moldova received the right to export dairy products from the colony (C), ice cream, as well as bakery products using powdered milk or condensed milk, when preparing an assortment of bakery products. However, this is an important step for the sector as the assessment of the competent authority agency or country list shows that the ANSA competent authority as well as the CRDV laboratory responsible for food safety and traceability have been assessed. After listing the country, the second stage involves the authorization of a company that has the ability to export products from the specified application, in our case, frozen food and baked goods. We hope that by the end of this year we will have at least two or three companies authorized to export products to the EU.
What are the prospects for livestock farmers in developing their business with international financial support?
We had discussions in 2019 with MADRM, which develops policies and is the guarantor of their implementation, with representatives of the World Bank, which, based on studies, including a study conducted jointly with the Investment Agency, showed that the areas of livestock production, the primary sector to have a credit line guaranteed by the state, to develop at least 50% of the consumption of dairy products, which must be provided by the domestic market. We have calculated that it is necessary to produce 164 thousand tons of raw milk raw materials for dairy products for local consumption, without export. It was assumed that the program would be available directly to farmers, and the scientific component would be involved in the academic environment for the modernization of the livestock sector in Moldova. We have also presented business plan models on the basis of which these loans can be obtained to start a business. The subsidy fund is often mentioned, but it is used after investing and discussing with our association members, I realized that the procedure is long, because if a farmer applies and files at the end of October, only at the end of the next year he will receive a subsidy, so not will be able to reinvest money in business development. It is important to note that if we go back to discussions with donors, the Ministry of Finance and MAFI, for this calculated $35 million, I believe that the profitability of the business and the amount of milk received, the productivity of animals should be emphasized. . We will incentivize start-up businesses with this money, we will forward our approach to the legislature and MAFI leadership, as well as to the Ministry of Finance to reopen discussions with the World Bank.
What is the relationship between dairy associations and ANSA, a relationship of cooperation or subordination to measures that are sometimes (not) justified?
We have adopted best practices in food control and compliance testing from the EU, with a diametrically opposed history from the USSR, the Soviet system, which was based more on finished product testing than on fork-to-fork testing of products. We must start with animal feed testing to ensure the safety of the product, i.e. animal feed, animal health, residue testing for pharmaceutical use in the production of raw materials, milk or meat of any kind, the technological process used is at a very high level - hygiene, sanitation in production, and then we have a guarantee that we get a safe, harmless and high-quality product, intended both for local consumers and for export. It is also difficult for us, but also for ANSA we believe that it is sometimes difficult to agree and implement everything necessary when it comes to phytosanitary and sanitary and veterinary requirements. We have a lot of work to do in this regard, since ANSA has posted on the official website Food Safety Monitoring Reports with a number of 740 tests, which is very small, since in EU Regulation 853/2004 or Government Decree 435/2010 transposed into national law, it is envisaged that the test for the total number of embryos and somatic cells will be carried out twice a month in each authorized farm, the costs of these tests are estimated at about 2500 lei per month. Most farms, households and a very limited number of competent authorities do not carry out these tests. And since we have a shortage of milk in our country, milk is bought, and the processor is forced, due to the quality of the purchased milk, to apply several actions and processes, such as filtering, baking, milk pasteurization, to ensure the safety of products placed on the shelf. They are safe, but all of the above steps entail costs, ranging from collection, equipment and arrangement of collection / inspection points, transportation, cooling, storage, filtration, baking, pasteurization of milk, in conditions of shortage of raw materials, both quantitatively and quantitatively. and quality. ANSA should provide for corrective action for authorized holdings, households, rather than closing them, the health care provider should provide solutions, and not persecute producers and breeders of animals. I hope that the amendments to Government Decree No. 600 on the management of ANSA, which is supposed to employ more than 200 veterinarians, will help farmers ensure the necessary sanitary conditions for obtaining a safe product, will change the situation for the better. livestock sector.
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This year we have a forecast that the grain harvest will be plentiful, unlike last year, is it possible that this will become a real help to livestock?
That's right, the results of this harvest are pleasing. The impact of the 2019-2020 drought was severe, I don’t know how they coped, because the animal’s diet is 3-4 kg of corn, we know that the price of corn has increased from 3.80 lei and reached 5. While corn provides the amount of fat in milk, its price is higher if we have a base of 3.5%, so farmers have suffered very large losses without government support. Thanks to the rich harvest this year, we hope that the slaughterhouse will be reduced and not only the number of animals will increase, but also productivity and milk quality will improve. If the price of compound feed is lower this year, then the diet will be more varied, which means that we will get milk of higher quality, with a higher percentage of fat content and a higher price per liter. We will send a letter to the Government and ask to subsidize milk depending on quality indicators, so that we have an increase in productivity both quantitatively and qualitatively.