October 23, 2007

Bulgarian dairy exports to EU to drop by 25 percent this year

Sales of Bulgaria's dairy products in the European Union is seen to drop by at least 25 percent to 14,000 tonnes in 2007 from 17,000 tonnes last year due to insufficient quality milk, said Dimitar Zorov, chair of the country's association of milk processing companies.

The industry problems are getting more complicated due to lack of coordination between the milk processing companies and the state administration. Although the agriculture ministry has earmarked 800,000 Bulgarian levs (US$586,000/409,000 euros) for the national milk board, which was established to protect the interests of milk producers and traders and to ease the administrative hurdles in quota distribution, the board has not received any funds and lives on donations by European foundations.

The crisis in the sector may get worse unless the ministry approves the board-sponsored plan for restructuring of small dairies. Under the proposal, small dairy farms can apply for EU funds of 5,000 euros (US$7,000) to replace dairy cattle with cattle bred for meat. Experts' estimates show that Bulgaria could halve its current 300,000 dairy cows to fulfil its milk quota and local dairy farmers demands the ministry should increase the subsidy for quality milk to 0.20 levs (US$0.15/0.10 euros) per litre from 0.08 levs (US$0.06/0.04 euros).