Russian Dairy Industry Still Uncertain with WTO

RUSSIA - On the 23th of July 2012 the State Duma of the Russian Federation will ratify an agreement allowing Russia to ascend to the World Trade Organisation (WTO). With this in mind, the dairy industry is concerned about an influx of dairy product imports that could flood the market.
calendar icon 15 June 2012
clock icon 1 minute read

Members of the National Milk Producers Union (SOUZMOLOKO) have concerns about their businesses, despite the government confirming RUR 26 billion in support for the dairy industry next year.

President of the Russian Manufacturers of Agricultural Machinery Association (RosAgroMash) Konstantin Babkin said: “Farmers complain about the ascension to the WTO because market protection and subsidies are decreasing. Milk producers are working at a loss nowadays, after the ascension to the WTO it will become worse."

Mr Babkin told Dairy News Russia that producers are expecting cheap adulterated milk powder and palm oil products to flood in from Europe.

"Russian milk processors are shortening contracts, in expectations that they can fulfill supply from outside Russia."

In response to farmer's concerns, the Russian government is considering prolonging a zero income tax rate for farmers until 2020 and to exempt breeding cattle, embryos and semen imports from income tax, to suppose cattle rearing. Direct dairy industry support measures have still not been released.

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