Farmers sell their milk quota on internet - September 03th, 2007
Dryness has tripled the prices for fodders, which makes most of the Romanian farmers to sell their milk quota. In order to produce EU conform milk, farmers must make investments they can no longer afford. Some of them went so far as posting ads on the internet. The prices are small for the moment, around one euro/liter, because the offer exceeds the demand but higher prices are expected next year. The market will start "boiling" if Romania doesn't receive the supplementation of quota in 2009, especially since big producers have performed their investments and are waiting now for a green light for purchase.
The lack of fodders and the important amounts necessary for investments assumed at the allocation of the milk quota determine the producers to sell the milk quotas. The prices are still small because the number of sellers exceeds that of buyers.
Farmers have posted ads on the internet to sell their milk quotas, especially those who have been allocated at least 10.000 liters quota. The starting price is around one euro, but the money received doesn't cover the expenses related to animal raise. The price of roughage has tripled and the processors buy a liter of milk for less than 0.7 lei and sell it for over 2 lei. Besides, to get an EU conform production farmers must make important investments and there are few who can afford them. According to the organizations of the sector, the big producers buy quota at prices ranging from 3.5 -5 lei. That is the reason why the selling of milk quota to the big producers can be a profitable solution for Romania. "It is a good thing that quotas are being sold, because that will result in the concentration of milk in bigger exploitations. This is what happens all over the European Union. If the allocated quota is not achieved, it is good because that means Romania will not pay taxes to the EU for exceeding the quota. Milk quota can not be lost, it's transferred to the next year", explained Lucian Elisei, director of the Department for Milk Quota Administration.
Farmers who permanently transfer their milk quota are obliged to give 30% of it to the national reserve. To the national reserve will also go the resulting value from the reduction of quota after it being not achieved. Thus the farmers who haven't succeeded in one (milk quota) year to market at least 70% of the received quota will lose the quantity not used for that year.
Source: Curentul newspaper, September 03th, 2007 |
