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The European Commission asks Serbia to abolish import taxes on milk

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On February 17, the Government of Serbia introduced surcharges – import taxes of 15 dinars per liter of milk and 30 dinars per kilogram for seven types of cheese, in order to stabilize the situation and stop the fall in prices of purchased milk on the market and protect Serbian producers. 

However, a few weeks later, the European Commission asked Serbia to withdraw the levies introduced.

The Minister of Agriculture, Jelena Tanasković, told Euronews that Serbia did receive a letter from the European Commission, to which it responded and explained the reasons. 

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The minister explained that the state introduced levies, because there was a big disturbance in our market, since the import of milk increased by more than 37 percent in the previous few months.

She added that this was done to protect primary agricultural producers and that she hopes that it will be for a very short, temporary period, in case there is no stabilization in the market. On the other hand, farmers are asking for higher taxes on cheese.

“These are our people. Every day I hear – the levies were wrong, and then three days later they say that they should be higher. 

I agree that they should be higher, but there are some other measures that can balance those imports “At this moment, it is not an option to go with the increase in the levy for cheese. Let’s see what we can do,” Tanasković told Euronews Serbia.

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The representative of milk producers from Banat, Vukašin Baćina, says that the situation with the purchase price of milk in Banat is excellent. He said that he does not see the point in spilling milk and added that currently everyone who worked according to the regulations has someone to sell it to. He added that the payment for milk was regular and that every liter of milk was used. 

However, he adds that dairies lower prices, because they cannot sell products due to the low prices of imported products. That is why, as he says, he welcomes the Government’s decision on the levies.

“This 15 dinars per liter of milk is very good, but 30 dinars per kilogram is too little for cheese and it should be raised to at least 330 dinars per kilogram, so that the price of imported cheese is equal to the price of cheese produced by our dairies, which we sell milk,” Baćina said.

He said that the EU has no right to protest, because Serbia has signed the Stabilization and Association Agreement, which states that the introduction of a levy is allowed, when some product is imported at a dumping price.

“Cheese is at a dumping price and it is simply impossible to import cheese from the EU for 320 or 330 dinars per kilogram, while the production price for dairies in Serbia is 700-750 dinars. In that case, the state has the right to introduce a levy on the import of cheese only he must inform the EU about that,” Baćina said.

Galetin: Dairy cattle in a serious crisis

Agroeconomic analyst Žarko Galetin explains that levies are taxes, i.e. the difference between the lower import price and the domestic price, which is covered according to a precisely determined methodology. 

He believes that it is good that they were introduced, but that the European Commission should have been given a reason for it before that. He points out that all this is of a short-term nature and that we can’t even keep the fee forever.  

“It’s good that levies were introduced, they somewhat protected domestic milk producers from disloyal imports, and that was resolved ad hoc. But, in the long term, one must sit down and have a serious discussion with producers, the profession, genetic centers, how to systematically solve milk production , that is, dairy cattle breeding, which is currently in a serious crisis,” Galetin points out.

He says that when it comes to buyback, it depends on the producer and that some of them are satisfied, while some spill the milk for several days in a row.

“All the measures that have been adopted as they were adopted have taken a step forward towards improving the situation in dairy cattle and increasing the premium from 10 to 15 dinars, although 20 dinars was requested. 

The subsidy for a dairy cow was increased from 25,000 to 30,000 dinars, although it was requested 40,000 dinars. Every measure that contributes as much as possible to the status of our producers is basically good. It could have been more and better, but I think the most important thing now is to extinguish the acute fire,” Galetin believes.

He points out that, since the state can no longer impose and determine the lowest purchase price for milk, the only instrument we have at the moment to solve this problem is for the Republican Directorate for Commodity Reserves to intervene.

“Nowadays, when you produce milk, it cannot last long and if it is not sold, the milk is literally unusable. That is why I think that a transparent and clear role is needed for the Directorate for Commodity Reserves, scientific research centers, producers and the state to make a proper schedule of subsidies and we should consider whether the premium should also go through the buyer,” Galetin said.

He stated that the synchronized system implies a solution that will result in the fact that today we do not have between 180,000 and 200,000 dairy cows, because he believes that this is absolutely unacceptable.

“That number of dairy cows puts us in a problem as to whether we will even manage to close the domestic balance of milk production,” Galetin points out.

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