Ministry of Rural affairs allocates €15m to establish cooperative dairy production

Minister of Rural Affairs Urmas Kruuse (Reform) (Martin Dremljuga/ERR)
7/21/2016 4:01 PM
Source: BNS
Category: Business

Minister of Rural Affairs Urmas Kruuse (Reform) signed a resolution to earmark up to €15m of funds available under the Rural Development Plan 2014–2020 to create a cooperative dairy industry in Estonia.

“Farmers must be paid a better price for milk on the market, and the only way to achieve this is to start processing milk in a cooperative form and thereby control a bigger part of the value chain,” the minister said.

While emergency support provided to the struggling dairy sector would give the sector time to adjust to the new market situation, a long-time solution was possible through more vigorous selling activity and advancement in the value chain, Kruuse said.

The Rural Development Plan 2014–2020 allocates €18m to large-scale projects of a cooperative nature, of which €15m has now been earmarked to support the cooperative dairy industry.

A dairy plant built within the framework of the measure must be able to receive at least 25% of Estonia’s total raw milk output, and the production volume of the farmers applying for support must likewise equal 25% of total output.

Kruuse said that only projects aiming at building a new processing facility will be eligible for support, and that the money couldn’t be used to buy an existing plant. “The aim is to advance the use of state-of-the-art technology to improve the competitiveness of our products on external markets. Export is the key to solving the present situation of the dairy sector, as Estonia produces twice as much raw milk as it consumes,” the minister said.

According to the ministry’s current plans, a first application round will open in early 2017.

Editor: Dario Cavegn

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