BAKU, November 22, 2016. The Round Table on the theme of the "Milk processing sector, problems, and perspectives" was held by support for Economic Initiatives Public Union (SEI) and Entrepreneurship Development Foundation (EDF) within the framework of the Micro-Enterprise Support Project financed by USAID.
Businessmen and farmers representing different regions of the country, who are engaged in milk production and processing, attended the event.
Sabit Bagirov - President of the Entrepreneurship Development Foundation greeted the participants and gave brief information about the Micro-Enterprise Support Project activities carried out during the implementation of the project. In his speech, he noted that the potential of the milk processing sector is big and the aim of the conducted research is to define problems of the sector and to present recommendations to the government for their solution.
Faig Samadov – the representative of the National Confederation of Entrepreneurs (Employers) Organizations of Azerbaijan Republic, noted the importance of the development of the milk processing sector, spoke about the activities of the Confederation in this field. Rovshan Agayev – the expert of the Support for Economic Initiatives Public Union presented the research report on "Evaluation of the economic potential of the milk processing sector".
Speaker noted that, taking into consideration the fact that dairy production is one of the leading factors for food safety. According to this speech, the self-sufficiency of the country in this field is very important. However, the international statistical sources show that the volume of import of dairy products in Azerbaijan is 2.5 times higher than the official statistics revealed by the State Customs Committee.
There are good opportunities for increasing the potential of the dairy processing sector in order to meet domestic demand.
Speaker noted some issues that hinder the development of the dairy processing sector, encountered during the research. He said that the dairy processing sector is import-dependent in terms of technical, technological, and packaging.
He said that the milk processing industry, products in terms of import-dependent condition. There is a steady rise in foreign exchange the national currency of the economic environment, equipment, spare parts, raw materials, increases in the prices, which will ultimately increase the cost of automatically processed, causing an increase in the price of refined products.
According to his speech, low productivity, lack of production to meet demand are among serious problems for the dairy processing sector. At present, the production of milk is provided mainly by family farms that own 2-3 cattle.
At the end of the round table, Rovshan Agayev presented his proposal for the development of the milk processing sector. The study authors consider that expansion of the network of milk collection stations to reduce losses in milk collection and carriage, promotion of the establishment of large dairy farms, implementation milk analysis in accordance with EU standards, the introduction of guaranteed prices for producers, ensuring the transition of all operating enterprises to ISO standards should be the main priorities.
Then, discussions were held on the report. Farmers think that the main challenge is the low profitability of milk processing due to the high cost of its production and low prices for milk. As a result of it, interest in milk production and processing is declining and milk processing enterprises also suffer from it. Milk producers proposed the introduction of guaranteed prices by the government for the purchase price of milk. They consider that tax incentives and VAT exemption should also be applied for milk producers.
