While the prices of imported milk and dairy products are rising day by day, local farmers are unable to sell their products.
What are the reasons that dairy companies face local farmers? What processes underlie the economic factors that motivate milk processors to turn to foreign markets?
Economist Jafar Ibrahimli made a statement on the issue.
The expert said that the main problem in the Azerbaijani milk market is the weak negotiations between producers and farmers: “Supply companies do not conclude long-term milk contracts with farmers. They are also reluctant to buy more milk from local farmers if the imported milk powder is cheaper. If a long-term contract is signed with local farmers and the base prices are determined, farmer also builds its strategy accordingly.
It is claimed that local milk is expensive and cheap abroad.
Ibrahimli drew attention to the problems of farmers:
“One of the biggest problems for farmers is the lack of land and the inability to form their own fodder bases. There are no farms in the country to reduce the cost of milk and ensure the sustainability of farmers. Therefore, farmers are not able to form their own fodder base. For example, a farmer has a total of 500 animals 20-He has 50 hectares of land. If we calculate that an average of 1 hectare is needed for 1 animal, there should be an area of 500 hectares to provide 70-80% of several feed components given to the animal.
In this case farmer takes the bait from the outside. Therefore, the cost of milk automatically rises. When offering expensive milk to companies, it is preferable to go there, given that the foreign market is cheaper. Suppliers say that dairy products enter the country from abroad easily, their advertising is very strong and occupies 70-80% of the shelves in the market. It is also enough to sell foreign goods due to their advertising and attractiveness. That is why they prefer to buy and sell foreign goods rather than domestic ones. ”
According to the expert, 10 For more than a year, our country has had a complex problem with milk and dairy products:
“This problem has not been solved since the establishment of modern dairy farms in Azerbaijan. Supply companies have also been set up with state support. Most of these milk processing plants have been built with state support to ensure sustainability. However, farmers must have access to land and fodder. At the same time, farmers must agree with suppliers to sign long-term, sustainable contracts and determine the base price of milk. For that price farmer and the supplier company must do the work. Farmers have a problem with milk profitability. It can be said that there is no difference in the price of milk from the farm in the domestic market between last year and this year, even a penny or two is cheaper. (Bakupost)