– Why the initiative of establishing dairy cooperatives for years has been confined just to talks without taking much support from dairy farmers?

In my opinion, there are two main reasons: firstly, the imperfect Law “On Agricultural Cooperation”, which does not include the option of legal entities membership in manufacturing cooperative associations, while just for small and medium-sized enterprises – legal entities – such cooperation makes sense. Another obstacle is our Ukrainian mentality, reluctance to any changes, which is the result of the hard times our peasantry have always had.

The Project “Wholesale purchases of milk”, launched by the Association of Milk Producers (AVM) which I am now managing, in fact, is a preparatory step for the registration of the dairy cooperative, which will comprise both milk producers and processors. Such business operates successfully throughout the world, and I can see no reason why it would not work here, in Ukraine.

Of course, establishing the First Dairy Cooperative – the association of 27 dairy farms, members of AVM, and a processing enterprise – requires a great preparatory work. We make efforts for introducing amendments to the legislation (I mean promoting the appropriate amendments to the Law “On Agricultural Cooperation”), and we also do much of management work. We create the environment that would persuade milk producers in advantages of cooperation. I mean providing calculations, holding meetings and open discussion on important issues. We are also planning visits to successful cooperatives in Poland and Lithuania. The best evidence of the advantages of cooperation is to ensure higher purchase prices for milk.

It’s no secret that when it comes to milk prices, there always happen disputes between milk producers and processors. They often are quite sharp. The core idea of ​​the First Dairy Cooperative is to ensure a proper dairy processing plant, a member of the same cooperative, with sufficient volume of raw milk to further sell not raw materials, but value-added products, get involved into export trade. Now we are considering various options of what entity could be a “member dairy processor”: it’s either an upgraded existing enterprise or construction of a new modern processing plant. We also consider the options for providing supply of quality milk produced by the cooperative to other dairies through long-term contracts.

We are now working out co-operation of 27 farms belonging to AVM organizing wholesale purchase of produced milk and providing the combined volume to dairy processors. At the same time, we are preparing for the formal registration of the cooperative to be held when the legislation will be accordingly amended. We hope that it may happen this spring.

– Do you think the case of the First Dairy Cooperative may become a model for other milk producers in the next 2-3 years?

We have done much with the Project “Wholesale purchases of milk”, and much more is ahead. There are many factors that make impact on our work: general situation in Ukrainian dairy industry, uncertainty in the measures of practical support to dairy farming, legal barriers, need to continuously and earnestly persuade people of the need for cooperation and its benefits, and others. The changes cannot happen quickly, but I hope that successful outcome of our project may become a good model for other farms.