Republic

Rise in purchasing milk prices not to lead to rise in prices for socially important foodstuffs

The March 1 five-per cent rise in the prices for milk, purchased for the state needs, will not lead to the rise in prices for socially important foodstuffs, first deputy minister of agriculture and foodstuffs of this republic Nadezhda Kotkovets told reporters today. Prices for milk, sour cream and fat-free cottage cheese will be still fixed and companies do not have the right to increase them, even within the inflation framework, she explained. Boosting milk production by 15-16 per cent a year agricultural companies suffer considerable financial losses because of the rise in prices for energy resources, mixed fodder and transport expenses. According to the first deputy minister, the rise in the purchasing milk prices will let partially compensate these expenses – agricultural companies will get Br30 billion, individual subsidiary farms – Br20 billion. It is especially important for the owners of household farms who sell milk for the state needs. According to Nadezhda Kotkovets, the measure would encourage household farms to build up milk production. Nadezhda Kotkovets also added that milk produced by household farms will be purchased for the state needs at the price of first-class milk independently of its fat content. The expenses related to the increase in milk price will be compensated by processing companies. “There is no speaking about government subsidies”, Nadezhda Kotkovets stressed. In line with the government’s resolution #235 of February 18, 2006 the purchasing price for extra-class milk (not considering VAT) has been increased from Br367 thousand to Br387 thousand per 1 ton, first-class milk – from Br346 thousand to Br366 thousand, second-class milk – from Br230 thousand to Br240 thousand. The price for off-grade milk remains unchanged – Br140 thousand per 1 ton. Last year milk processing companies were supplied with 3,9 million tons of milk, including 575 thousand tons from household farms.