In September, the most popular topic discussed in dairy circles of Ukraine was the rise in milk prices. In general, over the past three months high-quality raw milk price has grown by 18%. Unfortunately, this growth was not due to the growth of the purchasing power of the domestic consumer. Sales of most dairy products are lower than in the same period of last year, not to mention the pre-crisis period. Dairy processors cannot increase the prices of ready-made dairy in proportion to the raw milk rise in price. Therefore, the high cost of milk in Ukraine is formed only due to its low supply and active exports of two commodities – butter and cheese product.

Current situation brings benefits only to milk producers. A number of effective enterprises now gain profitability of milk production business up to 50%. Generally, they mustn’t grumble, even if it is not possible to get subsidies from the state.

Recently government promulgated the draft budget for 2018. The unprecedented large amount of support is planned for farmers support: about 7.3 billion UAH. Of this amount, it is planned to allocate 1 billion UAH to support farmers and cooperatives of small producers; 1 billion UAH – to partially compensate for the acquisition of domestic agricultural machinery and equipment; 2 billion UAH – as a subsidy (cattle breeders, gardeners, etc.); 2.3 billion UAH – for the development of the livestock sector (construction and reconstruction of farms, providing cheaper interest rates on loans).

In general, the largest sum is promised to be paid to animal origin food producers. But for some reason, most of them are dissatisfied with such a decision. Now the direct subsidy (compensation for the abolition of VAT benefits) will become less, and to get money, you need to construct something. At least, the Association of Milk Producers (AVM) is outraged by this approach. Although the proposal is quite logical – current production of milk is very profitable now, but production volumes are small. It is necessary to further stimulate those who want to develop production and not just increase profits at the expense of the state. The truth is that agricultural producers, having bitter experience of the past, simply do not believe that compensation for construction will be paid. This means that officials should offer some new, more transparent mechanism for distributing money.

Granting “carrots” to dairy market operators, the government also intends to use the “stick”, although this concerns more dairy processors. In particular, there are plans to lift the moratorium on the verification of producers of dairy products by the State Service of Ukraine for Food Safety and Consumer Protection. This is the right decision. Nowadays there is a lot of falsification on the market, which does not allow conscientious producers of dairy products work efficiently. It would also be worthwhile to allow inspections by fiscal services, because the topic of selling gray, nowhere accounted products – so, those without paying taxes – in Ukraine has become very topical.