New Minister of Finance Sven Sester has rejected a request by Ivari Padar, the previous agriculture minister, for 2.8 million euros from the government's reserve fund for dairy farmers.
Padar had asked the government for the funds after the industry was hit by the Russian food import ban, but Sester said the request does not show how and to whom the money will go, adding that there is little in the request about how the money will increase the competitiveness of the sector and pull it out of the current crisis.
Sester said the industry has received EU emergency funding and will receive funds from the 2014-2020 EU financial period.
He also said contracts in new markets, namely Japan, have already been signed.
The decision is part of a larger debate on the exact condition of the industry, with companies saying they are on the verge on bankruptcy but politicians saying the sector is healthy. Figures show a mixed picture with many farms downsizing cattle herds and herd numbers could be down 10 percent by the end of 2015.
Milk producers could also face a three-million-euro fine for over producing in 2014, although the fine could have been as high as 13 million euros if the import ban had not forced cuts. The industry has also received 6.9 million euros in additional EU emergency funding to offset effects of the food import ban.
Government ministers have traveled far in the past 8 months, in an attempt to find new markets.
The dairy industry on the whole recorded a 393-million-euro turnover last year, slightly more than in 2013, but profits jumped by 78.5 percent to 18.8 million. Exports decreased by 1.1 percent in 2014, mainly due to a strong first half and new export markets.
Editor: J.M. Laats