MINISTRY OF AGRICULTURE AND FORESTRY
MARKETING DEPARTMENT
SITUATION AND OUTLOOK REPORT
OF
MILK AND DAIRY PRODUCTS
During CY 2002 and forecast for the 2003
June 2003
The present Bulletin is published by the Ministry of agriculture and forestry (MAF), Marketing Department at the Economic Policy Directorate.
This Bulletin includes an analysis of the state and prospects of the production and sales of milk and dairy products: number of animals, production and consumption, prices, imports and exports of milk and dairy products in 2002 and a forecast for the development in 2003, as well as the situation on the international milk market.
For the purpose of the analysis, data used was provided by the Agricultural Statistics Department and Animal-Breeding Department at the Ministry of Agriculture and Forestry (MAF), SAPI Ltd., Information Services Shareholding Company, Customs Agency, the information from the Department of Agriculture of the USA – Foreign Agricultural Service, etc.
The publication is aimed at managers in the state and public sectors at all levels, the organs of the system for scientific servicing of agriculture, companies and persons occupied in the field of agribusiness, managers and experts of the production cooperatives, associations and companies, farmers, stock exchanges, etc.
The quoted herein prognoses are based on an experts’ assessment and do not comprise official data. The bulletin is published once per year.
Compiled by:
Elena Karamanova - chief expert at the Marketing Department
Tanya Gaydazhieva - senior expert at the Marketing Department
The Bulletin has been accepted and approved for publication by the Expert Council of the MAF in June 2003.
For remarks and recommendations: Elena Karamanova and Tanya Gaydazhieva – tel.: 981 70 23 and 985 11 536, e-mail: elena@mzp.government.bg and tania.nakova@mzp.government.bg.I. SUPPLY FACTORS
1. Number of animals, average productivity and milk production from cows in milk and buffalo-cows
2. Number of animals, average productivity and milk production from sheep and goat
3. Import of milk and dairy products
II. CONSUMPTOIN FACTORS1. Use of row milk for industry processing
2. Per capita consumption of milk and dairy products
3. Export of milk and dairy products
III. MILK AND DAIRY PRODUCTS PRICES
1. Purchase prices
2. Wholesale and retail prices
3. Export prices
IV. STATE POLICY
1. Regulatory norms
2. Foreign trade regime
2.1. Import.
2.2. Export
3. Agriculture State Fund
4. SAPARD
Annex 1 Import of milk and dairy products
Annex 2 Export of milk and dairy products
SUMMARYMilk production in the country is forecast to grow in 2003 by approximately 9.4%, reaching up to 1650000 tons, as compared to the preceding year, including: cow milk – 1430000 tons, buffalo-cow milk – 6000 tons, sheep milk – 110000 tons and goat milk – 124000 tons. The forecast growth will result from the expected growth of the number of milk animals and of their average productivity.
Due to the forecast higher milk production in 2003, the imports of milk powder, used as a raw material in the processing industry, are expected to amount to approximately 2500 tons, or approximately 24% less, as compared to the year 2002. Thus, for the year 2003, the total supply of raw milk is expected to amount to 1672 000 tons.
In 2003, the total consumption of raw milk is expected to amount to 1672 000 tons, which comprises a growth of 10.6%, as compared to the preceding year. The exports of milk powder are forecast to grow approximately three-fold and to reach 600 tons, taking into consideration the gradual growth of its production in the country.
The share of the purchased quantity of raw milk for processing is expected in 2003 to grow by approximately 7%, up to 860 000 tons, however, the share of milk destined for direct consumption is also expected to remain large.
The seasonal characteristics of the raw milk production also determine the dynamics of its prices during the various seasons throughout the year.
A slight growth of the average annual purchase price is expected in 2003 by approximately 3%, up to 0.34 BGN per liter.
The wholesale and retail prices of dairy products will also grow insignificantly – within the range of 1% and 2% and are expected to vary within the following ranges:
- Wholesale prices: fluid milk – 0.80 BGN/l; yogurt – 0.48 BGN/500 g; cow-milk butter – 4.70 BGN/kg; cow-milk white brine cheese – 3.00 BGN/kg; Vitosha cheese – 5.60 BGN/kg.
- Retail prices: fluid milk – 0.91 BGN/l; yogurt – 0.54 BGN/500 g; cow-milk butter – 0.82 BGN/125 g; cow-milk white brine cheese – 3.35 BGN/kg; sheep-milk white brine cheese – 5.58 BGN/kg, Vitosha cheese – 6.40 BGN/kg.
SITUATION AND OUTLOOK REPORT
OF
MILK AND DAIRY PRODUCTS
during the year 2002 and a forecast for the year 2003
².
Supply factors
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Milk production in the country is forecast to grow in 2003 by approximately 9.4%, reaching up to 1650 000 tons, as compared to the preceding year, including: cow milk – 1430000 tons, buffalo-cow milk – 6000 tons, sheep milk – 110000 tons and goat milk – 124000 tons. The forecast growth will result from the expected growth of the number of milk animals and of their average productivity.
The basis for this forecast is provided by the commenced in July 2003 counting of the agricultural animal heads in Bulgaria. This will provide more comprehensive and precise data on their actual number throughout the country. In this way, probably, a clearer picture of the actual status of the milk sector as a whole will be provided, which, in turn, will provide for a more precise analysis of its current and future development.
Due to the forecast higher milk production in 2003, the imports of milk powder, used as a raw material in the processing industry, are expected to amount to about 2500 tons, or approximately 24% less, as compared to the year 2002. Thus, for the year 2003, the total supply of raw milk is expected to amount to 1672 500 tons.
1. Number of milk cattle, average productivity and milk production from cows in milk and buffalo-cows
The foreseen growth in the number of milked cattle in 2003, as compared to the preceding year, amounts to approximately 6.1%, up to 384200 heads, including: 380000 cows in milk and 4200 buffalo-cows. The average productivity of the milked animals is expected to grow and to reach for the cows in milk approximately 3 760 liters and for the buffalo-cows - 1430 liters. The increased number of milked animals and the higher average milk productivity will lead to a growth in the cow milk production and it is expected to reach 1430 000 tons, which will comprise a growth of 12.8%, as compared to the year 2002. Buffalo-cow milk production is low as a whole and does not comprise economic interest, since it is not purchased separately. Notwithstanding the above, its production is also expected to grow up to 6000 tons.
Cows in milkAccording to data from the Agristatistics Department at the Ministry of Agriculture and Forestry, the number of cows in milk in 2002 amounted to 358178, i.e. 2.5% less, as compared to the preceding year (Table 1). The larger share of the same, i.e. approximately 81% (289636 heads), is bred in small animal farms with an average number of 1 to 2 heads.
The agricultural lands in the country are still very much fractured and difficult for cultivation. On the other hand, the primitive animal breeding methods, the lack of mechanization and automation of the production process, as well as the unbalanced feeding of the animals determine the lower milk productivity in such farms. All of the above restricts to a large degree the efficient production and is a prerequisite of the current status of the sector.
Notwithstanding the fact that 2002 was a favorable year as regards fodder (higher production), the prices of which recorded a considerable drop of 20% to 30% for the various crops, the feeding of the animals remained a difficulty for numerous farmers. This is precisely the reason for the recorded in most regions of the country drop in the number of bred cows in milk. The highest drop in the number of cows was recorded in the Southwestern and the Southeastern regions by, respectively, 39.2% and 32%. Growth was recorded only in the Southern central region and the Northwestern region. As a rule, the largest number of cows are bred in the Southern central region of the country, reaching in 2002 as high as 170990 heads, or a growth of 25.5%, as compared to the preceding year (Table 1). The growth recorded in the Northwestern region was lower at 14.3%, up to 31 238 heads.
* - Northwestern Region – Vidin, Vratza, Montana; Northern Central Region – Veliko Turnovo, Gabrovo, Lovech, Pleven, Rousse; Northeastern Region – Varna, Dobrich, Razgrad, Silistra, Turgovishte, Shumen; Southwestern Region – Blagoevgrad, Kyustendil, Pernik, Sofia (the city and the appurtenant region); South Central Region – Kurdjali, Pazardjik, Plovdiv, Smolyan, Stara Zagora, Haskovo; Southeastern Region – Bourgas, Sliven, Yambol
The milk productivity of the cows depends to a large degree on the genetic potential of their breed, as well as on the feeding of the animals. Due to the above, the average productivity varies widely for the various breed, from 3 000 up to 6 000 liters.
According to data from the Agristatistics Department, the average annual milk productivity during the year of 2002 per head for the cows amounted to 3540 liters, averaging in the small animal farms at 3475 liters, and reaching an average of 3813 liters in the professional farms (Table 2).
Table 2
The production of cow milk in Bulgaria is of the highest importance for the milk sector, providing for over 80% of the total raw milk production in the country. In 2002, its share amounted to 86.6%.
A total of 1305 912 tons of cow milk were produced in 2002, which comprises a growth of 6.7%, as compared to the preceding year. The recorded growth as compared to the year 2001 was mainly the result of the improved productivity per cow, since the number of heads bred dropped during the year.
Table 3 shows the data on milk production for the year 2002 according to type, region, and quantity in thousands of liters and in the transformed liters into tons.Table 3
According to data from the Agristatistics Department for the year 2002, the number of buffalo-cows in the country grew by 9%, as compared to the preceding year, and amounted to 3927 (Table 1, page 6). The larger share of the same (71.7%) was bred in small animal farms.
The largest number of buffalo-cows is bred in the Southern central region, amounting to 1496 heads (a growth of 73.5%, as compared to the year 2001), followed by the Southeastern region, where the number of heads bred grew two-fold and reached 976 heads. A large drop in the number of buffalo-cows was recorded in the Northeastern region by 70% and in the Southwestern region by 32%, as compared to the preceding year, down to 256 and 133 heads, respectively.
The average annual milk productivity of a buffalo-cow amounted in 2002 to 1100 liters, while production of buffalo-cow milk reached 4410 tons, providing for an insignificant share (0.3%) of the total milk production (Table 4).
Table 4
The data from the performed in 2001 inquiry by the Agristatistics Department included the production of buffalo-cow milk only by the professional animal farms. The produced milk at the small animal farms is in most cases used for direct consumption by the respective households and only insignificant quantities of the same are offered for sale together with the cow milk. Due to the above, these quantities of milk were not accounted for in the recorded buffalo-cow milk production and do not provide any possibility for comparison with the date for the year 2002.
Buffalos are more resistant to a number of diseases and are not subject to the “mad cow” disease, unlike at the cattle. The higher milk productivity characteristics and the higher nourishment values of the buffalo-cow milk provide for the increased interest in the same. The various products, produced from buffalo-cow milk can find a good market both in the country and abroad.
2. Number of milked animals of the sheep and goats category, average productivity and production of milk from sheep and goatsThe total number of animals in the sheep and goats category is expected to grow in 2003 by approximately 2.6% and to reach 2050000 heads, as compared to the preceding year, including: milked sheep 1400000 and milked goats 650000 heads. A growth of the average milk productivity is also expected, reaching in the case of sheep 86 liters and in the case of goats 192 liters, as a result of which the milk production is also expected to record a growth of approximately 18%, reaching 234000 tons.
Sheep
According to data from the Agristatistics Department for the year 2002, the number of milked sheep amounted to 1379061 heads, which comprises a growth of 5.9%, as compared to the year 2001 (Table 5).
Table 5
The larger part of the same (86.7%) is bred in small animal farms. The largest number of milked sheep are bred in the Southern central region – 346890 heads, and the Northeastern region – 341630 heads. A percentage growth was observed in 2002 in three of the country’s regions, namely the Northwestern, the Southern central, and the Northeastern by, respectively: 48.1%, 17.6%, and 4.7%, as compared to the preceding year. The highest drop in the number of milked sheep was recorded in the Northern central region – by 31.2%, as compared to the year 2001.
The average annual milk productivity from milked sheep in 2002 was recorded at 82 liters, which comprises a growth of 17% as compared to the preceding year (Table 6).
Sheep milk production amounted to 93479 tons and recorded a growth of 29.7%, as compared to the preceding year, which is mainly due to the increased number of milked sheep and their higher average milk productivity. The above was also due to the increased grazing area resulting from the favorable climate conditions and rainfall during the summer months of the year 2002.
Table 6
The produced in 2002 sheep milk comprised 6.2% of the total raw milk production.
The implementation of the separate purchasing and processing of the sheep milk, without mixing the same with cow milk, has resulted in improved economic advantages of sheep milk production. For the first time this year, good quality sheep milk will be subsidized by means of a special-purpose subsidy from the Agriculture State Fund, which comprises another stimulus for the farmers to increase the number of bred milked sheep.
GoatsDuring the last few years, the importance of goat breeding for the economy of the country has continued to grow, especially in the mountainous regions. In addition to being practically the only source of income, for a large part of these farmers the goats are also the only source of milk and meat. The interest in goat breeding grows not only because of their easy and cheap breeding, but also due to their lack of any special requirements and the growing demand for ecologically pure dairy products both within the country and abroad. Goat milk with its specific nourishing and curative properties is suitable for production of diet products and an alternative to cow milk in overcoming the problems with reference to milk allergies.
According to data from the Agristatistics Department, in 2002 the number of milked she-goats grew by 11.8%, as compared to the preceding year and currently amounts to 619465 heads (Table 5, page 9). The most milked she-goats are bred in the Northwestern region – 134592 heads (i.e., a growth of 92.1%) and in the Southern central region – 128980 heads (a growth of 5.8%). A percentage drop in their number was recorded only in two regions of the country by respectively 23.6% and 11.5%, as compared to the preceding year.
The large growth in the number of goats bred in the Northwestern region is due mostly to the fact that there are more mountainous and semi-mountainous areas in this region, in which high unemployment rates are recorded. Goat breeding has become, in practice, an alternative employment for the population of this region, which provides them not only with income, but with food for their own consumption, as well.
The growing number of milked she-goats in the country led to an increased share of the goat milk in the total raw milk consumption, reaching 6.9% of the total in 2002. The production of goat milk in 2002 recorded a growth of 15.9%, as compared to the preceding year and currently amounts to 104820 tons (Table 6, page 9). The reason for the above is not only in the grown number of animals bred, but also in the improved by 3.3% average milk productivity per milked she-goat (189 liters), as compared to the year 2001.
2. Imports of milk and dairy products
A slight drop is foreseen for 2003 in the imports of milk and dairy products by approximately 14.2%, down to 12000 tons. The produced in 2002 higher quantity of raw milk provided for the production of more dairy products, which satisfy the consumer demand, as a result of which the imports are expected to drop. Another restricting factor for the imports is caused by the temporary increase of the customs duty for whey from 15% up to 64% during the second half of 2003.
According to data from the Customs Agency, during the January to July period of 2003, a total of 9 287 tons of milk and dairy products were imported, distributed as follows: milk and cream – 4 440 tons (including 3 805 tons of milk powder), yogurts – 70 tons, whey – 2 517 tons, butter and milk fats – 998 tons, and 1 262 tons of brine cheese, yellow cheese and curds.
According to preliminary data from the “Information Services Shareholding Company” for the year 2002, the registered imports of milk and dairy products amounts to 13989 tons, including: 6503 tons of milk and cream, condensed and non-condensed, sweetened and non-sweetened (including 3277 tons of milk powder), 4138 tons of whey, 2039 tons of brine cheese, yellow cheese and curds, 1194 tons of butter and milk fats, and 115 tons of yogurts (Fig. 1). The performed imports comprise a growth of 41.7%, as compared to the preceding year. A smaller quantity of raw milk was produced in 2001, and, respectively, less dairy products were produced, as well. This necessitated the higher imports in 2002, mainly of milk powder and whey, in order to compensate the shortage of raw milk for processing.
Fig. 1
A growth of the imports was recorded in 2002 for al types of dairy products and the same varied within a wide range between 3% and 75%. The highest growth was recorded for the imports of milk and cream (condensed and non-condensed, sweetened and non-sweetened) – by 75%, as compared to the year 2001, reaching 6503 tons and comprising 46.5% of the total imports of milk products (Fig. 2). The established during the last few years trend for imports of large quantities of milk and cream from the Ukraine continued in 2002, as well, with the performed imports amounting to 3 726 tons (including 1350 tons of milk powder). The share of the imports from the Ukraine comprises approximately 63% of the total imports of milk and cream (Annex 1, page 45).
Fig. 2
Another product destined for processing is the whey, the imports of which in 2002 amounted to 4138 tons, i.e. a growth of 30.8%, as compared to the preceding year. Large quantities of whey are imported from the Czech Republic (1652 tons), Croatia (664 tons), France (394 tons), and Germany (299 tons).
The performed imports of brine cheese and yellow cheese during the year amounted to 2039 tons, which comprises a growth of 19.4%, as compared to the year 2001. Bulgaria is a traditional producer and is known for its quality white brine cheese from cow and sheep milk. The good taste of the Bulgarian brine cheese makes it popular both on the domestic and the foreign markets. Notwithstanding the above, in order to improve the assortment on the market, non-typical for our country types of cheese are being imported, such as: Emmental, Cheddar, Camembert, Brie, Edam etc. These types of cheese find a good market in our country and many consumers buy them, notwithstanding their high prices. The larger quantities of these types of cheese are imported from Germany (738 tons or 36% of the imports) and France (360 tons or17.6%).
According to data from the Customs Agency, Table 7 shows the operational accounting of the imports of the individual types of dairy products according to the undertaken by Bulgaria obligations towards the WTO, ÅU and CEFTA for the year 2002 and for the period prior to 12.06.2003 (the latest operational data available). For some of the products the preferential import quotas have not been fulfilled, e.g. from Slovakia, Slovenia, and partially from Poland (milk powder and yogurt).
As regards the fulfillment of the quotas for imports of dairy products with preferential customs duties from other countries, with which Bulgaria has executed bilateral trade agreements (Turkey, Macedonia, Estonia, Croatia, and Lithuania – see page 27 – preferential imports), it has to be noted that the specified quotas were not fulfilled neither in 2002, nor till date.
As the reason for the failure to fulfill the quotas can be quoted the fact that the dairy products of these countries are not competitive enough on the domestic market. The Bulgarian consumer prefers the traditional brine cheese, which, in addition to its good taste qualities, was affordable for most consumers in 2002 due to the drop of its prices. Certain types of cheese, mostly of European origin, which are not produced in Bulgaria, are being imported in order to provide for the tastes of certain more demanding customers, notwithstanding their higher prices.
Table 7
Remark: For all dairy products, except for tariff item 0406 (brine cheese and yellow cheese), the quota is opened on 01.01. and remains valid until 31.12., while for the brine cheese and yellow cheese the validity of the quota is for the period from 01.07. until 30.06.
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Consumption factors
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In 2003, the total consumption of milk is expected to amount to 1672 500 tons, which comprises a growth of 10.6%, as compared to the preceding year. The export of milk powder is forecast to grow approximately 3-fold, reaching 600 tons as a result of the gradual growth of its production in the country. The share of purchased raw milk for processing is also forecast to grow by approximately 7% and to reach 860 000 tons, however, the share of milk destined for direct consumption is also expected to remain high.
Table 8 shows the supply and demand of raw milk in 2001 and 2002 and the forecast for 2003.
The total consumption of raw milk in 2002 grew by 8.5%, as compared to the preceding year, reaching 1511 898 tons. This growth is due mainly to the higher average productivity of the milked animals recorded during the year. The exports of milk powder from Bulgaria are insignificant, since its production in the country as a whole is minimum. In 2002, a total of approximately 200 tons of milk powder were exported, which practically equaled the level of the preceding year.
Table 8
The data on industrial processing of milk quoted in Table 8 is based on the conducted by the Agristatistics Department inquiry at approximately 400 operational milk-processing plants and probably does not include all the purchased quantities of raw milk. A considerable share of the produced milk remains with the milk producers to satisfy their own needs (fresh or processed). Very often the milk is offered directly to the final consumers, without being recorded and without passing through the processing plants or the retail networks, as a result of which the direct consumption retains a large share of the total supply. In 2002, the milk destined for industrial processing comprised 53.3% of the total produced quantity for the country.
At a large number of farms, it is difficult to assess what part of the milk remains for consumption by the animals themselves, since prior to being started on feed during the rising period, the young animals suck from their mothers.
Due to the above, the quoted data on direct consumption and animal consumption is based on experts’ assessment.
1. Use of raw milk for industrial processing
According to data from the Agricultural Statistics Department, the purchased raw milk for industrial processing in 2002 amounted to 803993 tons, including: cow milk – 750621 tons, sheep milk – 46701 tons, goat milk – 5909 tons, buffalo milk and mixed milk – 762 tons. The quantities of purchased raw milk for industrial processing grew by 7%, as compared to the year 2001.
Table 9
The information on industrial production of milk products for the years 2000 and 2001 is shown in Table 9. A comparison of the data provides the conclusion that in 2002 production of certain milk products dropped, as compared to the preceding year. The drop concerns mostly the milk products with a short term life.
The largest drops have been recorded for the production of packed fresh milk at 25.9%, followed by milk fats at 17% and natural yogurts at 13.9%.
A growth in the production of curds by more than 2-fold, cheese by 23.1%, white brine cheese and melted cheese by, respectively, 7.4% and 10.6% was recorded for the year 2002.
2. Per capita consumption of dairy products
The average annual per capita consumption of the basic dairy products is quoted in Table 10.
Table 10
As can be deduced from the quoted in the table data, a growth was recorded in 2002 in the consumption of most types of dairy products. According to data from the National Institute of Statistics, the highest growth is in the consumption of flavored milks and desserts with milk contents – with or without fruits – by 18.2%, reaching 1.3 kg/person. The consumption of cheese and yogurt has also grown by, respectively, 14.3% and 12.8%. The consumption of fresh milk has dropped slightly by approximately 2.9%, while the consumption of milk fats has remained constant throughout the last few years.
The quoted data on the consumption of dairy products does not include the consumption at canteens, restaurants, and other public catering facilities; therefore it is probably not comprehensive.
3. Exports of milk and dairy products
The exports of milk and dairy products are expected to grow in 2003 by approximately 21.7%, as compared to the preceding year, and to reach 14000 tons. During the last few years, the exports of dairy products to the EU member-countries were limited due to their unsatisfactory quality. Until recently, the number of the licensed for export milk-processing plants was very small, but eleven more milk-processing plants were awarded licenses for exports of dairy products to the EU only in 2002, thus their number grew to sixteen*. This proves that the problems with the quality of the raw materials for the products have been almost overcome. This improves the possibilities for realization of a larger quantity of dairy products on the exacting European markets.
During the first seven months of 2003, the recorded exports amounted to 7596 tons of milk and dairy products, including: 334 tons of milk and cream, condensed and non-condensed, sweetened and non-sweetened, 74 tons of yogurts, 13 tons of butter and milk fats, and 7 175 tons of brine cheese, yellow cheese, and curds.
* - List of the licensed for exports to the EU milk-processing plants:
“Kondov Ecoprodukzia” EOOD (Sole-Owned Limited Liability Company), “Filipopolis RK” AD (Shareholding Company), “Mevgal Bulgaria” AD, “BG Fabrika 12” EOOD, “Zorov – 97” ET (Private Company), “Markeli” AD, “Buldex” LLC, “Bulgarian yogurt” AD, “Vanela” LLC, “Shipka – 99”, “Meggle – MJ” EOOD, “Vemas” LLC, “Yotovi” LLC, “Darko – Serdika” AD, “Delta Bulgaria” AD, “Eco-F” EOOD.
The observed during the last few years trend for growth of the exports of milk and dairy products continued throughout the year 2002.
According to preliminary data from “Information Services” AD, the realized in 2002 exports of milk and dairy products amounted to 11501 tons, which comprised a growth of 22.4%, as compared to the preceding year (Fig. 3).
Fig. 3
The provided to our country duty-free quota for imports into the EU for brine cheese and yellow cheese for the period from 01.07.2002 till 30.06.2003 amounted to 6100 tons, with a growth rate of 300 tons per annum (this will be valid for the consequent periods and the quota will amount to 6400 tons). Till date, the achievement of the quota is only partial, however, due to the increasingly high requirements on high quality for the exported to the European market dairy products. Another restricting the exports factor is the requirement for the importer company to apply for an import license for dairy products before the European Commission and to have performed similar trade during not less than the preceding 12 months, in accordance with the provisions of R 2508/97 of the EU.
The largest share in the export composition of the dairy products is occupied by the exported brine cheese and yellow cheese at more than 90% (Fig. 4). Exports of 10688 tons of brine cheese and yellow cheese were realized in 2002, which comprises a growth of 24.6%, as compared to the preceding year.
Fig. 4
The most popular and, therefore, most demanded on both the domestic market and on the foreign markets, are the Bulgarian white brine cheese and yellow cheese from sheep milk and cow milk. As a result, their exports continue to grow every year. The traditional importers of these products are mainly the USA, Australia, certain countries of the Middle East, Macedonia and Yugoslavia, but the exports to the EU also grew considerably in 2002 (Annex 2, page 46).
Fig. 5 shows the distribution of the exports of brine cheese and yellow cheese according to the various countries and exported quantities in 2002.
Fig. 5
Even though small in quantity overall, the exports of milk and cream (condensed and non-condensed, sweetened and non-sweetened) also recorded a growth of 44.5%, amounting in 2002 to 623 tons, as compared to the 431 tons exported in 2001. The exports of these products were destined mainly to the neighboring Macedonia, Yugoslavia, and Albania.
At the same time, the exports of butter and milk fats have dropped by more than 50%, down to 27 tons. The production of butter in the country is minimum as a rule, amounting only to approximately 1000 tons, for which reason the exported quantities are also very small.
As a result, the achievement of the provided quota for import to the EU of milk spreads with fat contents within the range of 39% to 60% as of 10.06.2003 was only partial at approximately 76%. This amounted to 484 tons (out of a quota of 637 tons).
Yugoslavia remains the main foreign-trade partner of the country for these products during the last few years and in 2002 provided for approximately 60% (16 tons) of the total exports.
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Prices of milk and dairy products
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The seasonal characteristics of the production of raw milk determine the dynamics of its prices during the various seasons of the year.
A slight growth of the average annual purchase price of raw cow milk is expected in 2003 of approximately 3%, up to 0.34 BGN per 1 liter.
The wholesale and retail prices of the dairy products are also expected to grow slightly by 1% to 2% and are expected to vary within the following ranges:
- Wholesale prices: fresh cow milk – 0.80 BGN/liter; yogurt – 0.48 BGN/500 g; cow butter – 4.70 BGN/kg; cow brine cheese – 3.0 BGN/kg; Vitosha yellow cheese – 5.60 BGN/kg;
- Retail prices: fresh cow milk – 0.91 BGN/liter; yogurt – 0.54 BGN/500 g; cow butter – 0.82 BGN/125 g; cow brine cheese – 3.35 BGN/kg; sheep brine cheese – 5.58 BGN/kg; Vitosha yellow cheese – 6.40 BGN/kg.
1. Purchase prices
The seasonal characteristics of raw milk production influence to a high degree the formation of the prices of both milk and of dairy products. The highest supply of raw milk is during the second and third quarters of the year, during which period the prices are lower as a result of the lower production costs of animal breeding (pasture period). During the winter season, the milking productivity and the supply of raw milk drop, as a result of which the prices grow gradually.
The main factor influencing the formation of the raw milk purchase price is the price of fodder grain. Approximately 70% of the costs for feed comprise the production costs of raw milk, as a result of which they play a significant role in the formation of the production costs of raw milk. The high crop of 2002 provided sufficient quantities of fodder crops, which resulted in a sharp drop of the fodder grains, with the drop varying within the range of 20% to 30% for the various crops. The largest price drop was that for the fodder wheat, which dropped by 30%, as compared to the year 2001, followed by the prices for the fodder barley, which dropped by 21.1%, and the fodder maize, which dropped by 20.8% (Table 11).
Table 11
The average annual purchase price of cow milk in 2002 amounted to 0.33 BGN/liter, which comprises a drop of 5.7%, as compared to the preceding year (Table 12). This price drop is due mainly to the higher production and supply of raw milk during the year.
Table 12
The accounted production costs per liter of cow milk in the various regions of the country varied during and outside of the active production period within a wide range – from 0.20 up to 0.30 BGN/liter.
In order for the milk production to be profitable, the ratio between the purchase price of the milk and the price of fodder grain must be within the range of 1:2.5 to 1:3. As can be deduced from the data quoted in Table 13, due to the drop of fodder prices in 2002, this ratio was more favorable for the milk producers, as compared to the preceding year. The data for the individual quarters indicates that this ratio was maintained for certain fodder crops at more than 2 throughout the year. The highest growth was recorded in the ratio of the price of milk to the price of wheat. This was due to the fact that the purchase price drop was highest for the fodder wheat, as compared to the year 2001. Notwithstanding the growth of the above ratio, the same remains at the lowest limits of its values, this means that milk production is still not sufficiently profitable.
Table 13
2. Wholesale and retail prices
Table 14 and Table 15 show the wholesale and retail prices of milk and dairy products for the 2001 – 2002 period.
Table 14
In 2002, the wholesale and retail prices of most dairy products recorded a slight drop, as compared to the preceding year. The price drop is due to the higher production of raw milk during this year, which provided for an increased supply of these products on the market.
In the case of the wholesale prices, the recorded drop in 2002 varied within the range of 2% to 7%, with the highest drop being recorded for the prices of the cow brine cheese by 7%. The wholesale price of yogurt remained constant throughout the period, while the price of fresh milk was the only one to maintain its high level and a growth of 2.6%.
The retail prices of dairy products recorded practically the same drop, as the wholesale prices, the recorded drop varying within the range of 2% to 7.6%. The highest drop was again recorded for the prices of the cow brine cheese at 7.6%. Again the exception was the price of fresh milk, which grew by 3.4%, as compared to the year 2001.
Table 15
Fig. 6 shows the variations of the purchase prices of raw milk and of the wholesale and retail prices of cow brine cheese for the various quarters of the years 2001 and 2002. The data in the figure clearly shows the high drop of the purchase price during the active production season (2nd and 3rd quarters), and, respectively, of the wholesale and retail prices of cow brine cheese. As a whole, it can be noted that the drop in the wholesale and retail prices in 2002 exceeded the drop in the purchase prices.
Fig. 6
Table 16 shows the relative share (%) of the farmer’s income from the market price of the final product. As can be deduced from the quoted in the table data, the share of the farmer’s income in the retail price of the main milk products has continued to drop since 2000. In the countries with a developed market economy and agriculture, this share varies within the range of 55% to 60%. For the year 2002, the share of the farmer’s income in the retail price of yogurt was the only one, which exceeded the optimum percentage (62.3%), which means that the farmer’s share in the market price of this product is growing.
Table 16
3. Export prices
The export prices of the most traded dairy products, i.e. white brine cheese from sheep milk and cow milk, according to the various delivery terms (as per INCOTERMS)* are shown on Tables 17 and 18. The prices of the quoted products depend on the transport costs, the provision of insurance (transport costs), the agreed upon destination, etc.
Table 17
Every year the exported quantities of brine cheese (from cow milk, sheep milk or buffalo-cow milk) from Bulgaria amount to more than 70% of the total exported quantities of dairy products.
For the year 2002, the largest share of the exports was occupied by the white brine cheese from sheep milk at 4359 tons, at an average export price of 2467 US$/ton. The largest exports of sheep milk brine cheese were destined for the USA at 1918 tons at an average export price of 2403 US$/ton, Australia at 771 tons at an average export price of 2335 US$/ton, Canada at 155 tons at the price of 2447 US$/ton. The exports to the EU member-countries included predominantly exports to Greece at 551 tons (average price of 2336 US$/ton), Germany at 382 tons (3058 US$/ton), and Denmark at 100 tons (2361 US$/ton).
* Delivery terms (as per INCOTERMS):
CIF delivery terms, which include the price for the goods, insurance, and transport costs up to the indicated location of the delivery;
DDU includes the price and delivery of the goods up to the indicated location, without paid customs duties;
EXW includes the price of the goods delivered ex-works of the producer;
FOB includes the price of the goods, the transport and other costs, incurred up to the loading of the goods onto a ship at the exporting port;
CIP includes the transport costs, the price and the insurance of the goods;
CPT includes the price of the goods and the transport costs up to the location of the delivery;
CFR includes the price of the goods and the insurance costs up to the location of the delivery;
FCA includes the transport costs, the price and the insurance of the goods up to the location of the delivery.
Table 18
The exports of white brine cheese from cow milk in 2002 amounted to 2899 tons at an average export price of 1422 US$/ton. The main countries, to which Bulgaria exports this product, include Lebanon at 700 tons at the average export price of 1320 US$/ton, the neighboring Macedonia and Yugoslavia, for which were destined, respectively 498 tons (1227 US$/ton) and 476 tons (1129 US$/ton), Germany at 225 tons (2126 US$/ton), Russia at 218 tons (1349 US$/ton), Australia at 197 tons (1526 US$/ton), Greece at 182 tons (1569 US$/ton), etc. The exported quantities to the USA were low at approximately 50 tons, while the export price, due to the large distance for shipping, amounted to 1776 US$/ton.
The exports of yellow cheese comprise a smaller share of the exports according to tariff item 0406 (brine cheese and yellow cheese). For the year 2002, the performed exports amounted to 606 tons of yellow cheese îò sheep milk at an average export price of 3496 US$/ton. The main importers include the USA and Lebanon, for which were destined, respectively, 234 tons (average price of 3562 US$/ton) and 207 tons (3 433 US$/ton).
Yellow cheese from cow milk was exported in smaller quantities and at lower prices. During the year 2002, the realized exports amounted to 351 tons at an average export price of 2227 US$/ton. The larger quantities were destined for Macedonia at 139 tons (average price of 2128 US$/ton), Yugoslavia at 35 tons (1870 US$/ton), Germany at 31 tons (3078 US$/ton), Lebanon at 29 tons (2003 US$/ton), Canada at 28 tons (1600 US$/ton), Jordan at 25 tons (2551 US$/ton), etc.
²V.
Policy on the production and sales of milk and milk products
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In order to improve the hygiene in milk production and the quality of the milk as the main prerequisites for the production of high quality and competitive dairy products, a number of regulatory documents were elaborated during the last year or two in accordance with the provisions of the European legislation in this field.
In 2002, Regulation No. 30 (published in State Gazette No. 1 dated 02.10.2001, modified and amended in No. 111 dated 26.11.2002) on the veterinary, sanitary, and hygiene requirements in the production of raw milk, construction and operation of milk-processing facilities, production and sales of thermally processed milk and dairy products was modified and amended. The compliance with the provisions of this Regulation with reference to the produced raw milk is compulsory for the applicants for subsidies.
Regulation No. 3 (published in State Gazette No. 5 dated 17.01.2003) on the veterinary and sanitary requirements for the milk production facilities, which determines the veterinary and sanitary requirements for the cow milk production facilities with reference to the maintenance of the facilities, appliances, and equipment for milking and to the storage of the milk and the milking of the animals.
Regulation No. 7 (published in State Gazette No. 40 dated 19.04.2002) on the hygiene requirements for the facilities, which produce or sell foodstuffs, and on the required conditions for the production and sales of quality and safe foodstuffs.
The following regulations were voted in order to guarantee the health of the animals and the safety of the products, obtained from the same, the control of diseases, the presence of hormones and technological contaminants, and the implementation of the state prophylactics program:
Regulation No. 6 (published in State Gazette No. 7 dated 24.01.2003) on the identification of the animals and registration of the animal breeding farms, in which they are bred. The Regulation determines the terms and conditions for the identification of the cattle, sheep and goats, and pigs of all age categories, the type of the ear tags and the marking code system, the exchange of information, and the terms and conditions for registration of the animal breeding farms, in which they are bred.
Regulation No. 26 (published in State Gazette No. 62 dated 25.06.2002) on the prophylactics and fight against the enzootic leukemia among cattle.
Regulation No. 34 (published in State Gazette No. 85 dated 5.09.2002) on the prophylactics and fight against certain contagious spongiform encephalopatia among animals.
Regulation No. 36 (published in State Gazette No. 95 dated 08.10.2002) on the prophylactics and fight against the foot and mouth disease among the cloven-hoofed animals.
Regulation No. 33 (published in State Gazette No. 82 dated 27.08.2002) on the prophylactics and fight against the blue-tongue disease among the ruminant animals.
Regulation No. 6 (published in State Gazette No. 32 dated 29.03.2002) on the measures for control over the remainders of veterinary medical substances and contaminants of the environment in live animals and products of animal origin.
Regulation No. 25 (published in State Gazette No. 94 dated 4.10.2002) on the determination of the maximum admissible contents of residual pharmacological substances from the contents of the veterinary medical substances in raw materials and products of animal origin, destined for human consumption.
Regulation No. 1 (published in State Gazette No. 6 dated 21.01.2003) on the health requirements on animals in cases of imports of cattle, sheep, goats, and pigs and the veterinary sanitary requirements in cases of imports of products of animal origin for human consumption.
Regulation No. 4 (published in State Gazette No. 30 dated 22.03.2002, modified and amended in No. 24 dated 14.03.2003) on the border veterinary medical control.
Regulation No. 11 (published in State Gazette No. 21 dated 7.03.2003) on the requirements for issue of veterinary medical documents for live animals and raw materials of animal origin.
The following regulations were voted in consideration of the importance of the performed activities with reference to the selection and reproduction of animals, in order to maintain and improve the productivity characteristics of the farm animals:
Regulation No. 12 (published in State Gazette No. 48. dated 14.05.2002) on the control of the productive capabilities and determination of the reproduction value of sheep and goats.
Regulation No. 29 (published in State Gazette No. 67 dated 31.07.2001) on the control of the productive capabilities and determination of the reproduction value of the pure-bred cattle and buffalo.
At its regular session, held in the beginning of June 2003, the Consultative Council on Milk approved a new system for determining the quality of the raw milk. The basic parameters, according to which the raw milk is to be evaluated, are the following: 3.6% fat contents and 3.2% proteins. 30% butter to 70% protein shall determine the structure of the basic price of the milk. This new system will replace the used till date system for purchasing of the raw milk on the basis of the dry fatless residue.
In order to protect the Bulgarian producers, the Council of Ministers issued a resolution in June 2003 to raise temporarily the autonomous customs duties on certain agricultural products. For this purpose, the Cabinet approved a Draft Resolution for modification and amendment of Resolution No. 289 of the Council of Ministers dated 2001 for approving the customs duty tariffs for the Republic of Bulgaria. According to the same, the customs duty for imported in the country whey powder was increased from 15% up to 64%.
2. Foreign trade regime
2.1. Imports of milk and dairy products
The Customs Duty Tariffs of the Republic of Bulgaria dated 01.01.2003 determines the following autonomous and preferential customs duties on imports of milk and dairy products according to the respective tariff items, as follows:
Tariffs for autonomous customs duties:
0401 milk and cream - non-condensed, non-sweetened
- with fats contents of 1% to 6%, in packages of up to 2 liters – conventional customs duty of 64%, autonomous customs duty of 25%;
- with fats contents of between 6% and over 45%, in packages of up to 2 liters –conventional customs duty of 90%, autonomous customs duty of 25%
0402 milk and cream – condensed, sweetened
- with fats contents of up to 1.5%, in packages of up to 2.5 liters – conventional and autonomous customs duty of 64%;
- with fats contents of between 1.5% and 27%, in packages of up to 2.5 liters – conventional customs duty of 96%, autonomous customs duty of 68%;
- special milk for suckling babies – conventional customs duty of 96%, autonomous customs duty of 0%;
- with fats contents of between 8% and over 45%, in packages of up to 2.5 liters – conventional customs duty of 96%, autonomous customs duty of 15%;
0403 butter-milk, yogurt and fermented milk – conventional customs duty of 64%, autonomous customs duty of 40%;
0404 concentrated or powder whey, sweetened - conventional customs duty of 64%, autonomous customs duty of 15%;
0405 butter and milk fats
- natural, restored butter, butter from whey, with fats contents of up to 85%, in packages of up to 1 kg – conventional customs duty of 60 max 1547 EURO/ton, autonomous customs duty of 68% (according to the agreement with the WTO);
Milk spreads
- with fats contents of between 39% and 60% - conventional customs duty of 60 max 1547 EURO/ton, autonomous customs duty of 40 min 800 EURO/ton;
- with fats contents of between 60% and 80% - conventional customs duty of 60 max 1547 EURO/ton, autonomous customs duty of 25%;
- with fats contents of equal to or more than 99.3% and moisture contents of up to 0.5%, etc. - conventional customs duty of 60 max 1547 EURO/ton, autonomous customs duty of 40 min 800 EURO/ton (according to the agreement with the WTO);
0406 brine cheese and yellow cheese, curds
- fresh cheese, curds, brine cheese from whey with fats contents of up to 40% – conventional customs duty of 65%, autonomous customs duty of 25%;
- cheese, in the production of which other types of cheese have been used, such as Emmental, Gruyere, Appenzell etc., with fats contents of between 36% and 56% – conventional customs duty of 85%, autonomous customs duty of 25%;
- cheese with green spots – conventional customs duty of 75%, autonomous of 25%;
- cheese for processing – conventional customs duty of 96%, autonomous of 25%;
- cheese Emmental, Gruyere, Sbrinz, Bergase, Cheddar, Edam, Tilist, etc. – conventional customs duty of 96%, autonomous customs duty of 30%;
- brine cheese and yellow cheese from sheep milk, cow, or buffalo-cow milk, cheese Feta, Kefalotyri, etc. – conventional customs duty of 96%, autonomous customs duty of 74%.
The autonomous customs duty is the current customs duty, while the conventional customs duties comprise the customs duties, with reference to which Bulgaria has undertaken to comply with certain conventions as a member of the WTO. The conventional customs duties are the maximum values of the tariffs, up to which the national ”autonomous” customs duties may be raised.
Current preferential customs duties for the year 2003:
The preferential customs duties and the respective quotas for imports of milk products are specified in the Annex to the Customs Tariffs in accordance with the provisions of the General Agreement on Customs Duties and Trade (WTO), as follows:
- milk and cream powder, granules or other solid forms, with milk fats contents of up to 1.5% - for a quota of 200 tons - customs duty of 15%;
- butter and milk fats – a quota of 1500 tons at 30% customs duty;
- brine cheese and curds – 17.5% customs duty for a quota of 3000 tons, which is distributed for the various countries, as follows: EU – 2000 tons, other countries – 1000 tons;
- cheese, destined for processing, etc. – a quota of 400 tons at 25% customs duty.
The preferential tariffs for the customs duties in accordance with the provisions of the executed Trade Agreement between Bulgaria and the EU member countries are specified in Annex No. 1.2 to the Customs Tariffs, as follows:
- yogurt and fermented milk with contents of milk fats between 1.5% and over 27% – customs duty of 32%;
- milk spreads with fats contents of between 39% and 75% - customs duty of 8%;
The sizes of the quotas and the customs duties for the various dairy products are specified in Annex No. 1.3 of the Customs Tariffs for imports from the EU:
- milk and cream powder, granules or other solid forms, with fats contents of up to 1.5% - a quota of 2400 tons at a customs duty of 12.8%;
- milk and cream powder, granules or other solid forms, with fats contents of between 1.5% and over 27% - a quota of 554 tons at a customs duty of 12.8%;
- natural, restored butter, butter from whey, etc. – a quota of 73 tons at 28% customs duty;
- brine cheese and yellow cheese, curds – zero customs duty for a quota of 2700 tons.
The quoted in Annex No. 2.2 of the Customs Tariffs customs duties for the following dairy products apply in cases of imports from the CEFTA member countries:
- milk and cream powder, granules or other solid forms, with fats contents of between 1.5% and over 45%, sweetened or non-sweetened, etc. – customs duty of 37%;
- whey, condensed or powder, with fats contents of between 1.5% and over 27%, and other types of whey – 14% customs duty;
Annex No. 2.3 of the Customs Tariffs applies for goods of origin from the Czech Republic and Slovakia:
- milk and cream, non-condensed, non-sweetened – 20% customs duty for a quota of 110 tons for imports from the Czech Republic and a quota of 210 tons for imports from Slovakia;
- milk and cream with fats contents of up to and more than 27%, in packages of up to 2.5 kg – 15% customs duty for a quota of 100 tons for imports from the Czech Republic and Slovakia;
- whey, condensed or powder, with fats contents of between 1.5% and over 27% - customs duty of 10% for a quota of 100 tons for the Czech Republic and Slovakia, other types of whey, non-sweetened, with fats contents of between 1.5% and over 27% - for an unlimited quantity of imports from the Czech Republic and Slovakia – 20% customs duty;
- brine cheese, yellow cheese and curds – for imports of 100 tons from the Czech Republic and Slovakia – 5% customs duty.
For goods of origin from Hungary:
- whey, condensed or powder, with fats contents of between 1.5% and over 27% - a customs duty of 20% for a quota of 50 tons;
- cheese, fresh and other types – zero customs duty for a quota of 150 tons.
For goods of origin from Poland:
- milk and cream, non-condensed, non-sweetened – for a quota of 50 tons – 50% reduction of the customs duty;
- milk and cream with fats contents of up to and over 27%, in packages of up to 2.5 kg – a quota of 50 tons with 50% reduced customs duty;
- whey – 50% reduction of the customs duty for a quota of 50 tons;
- cheese, grated or powdered, melted, etc. – a quota of 100 tons at 5% customs duty.
For goods of origin from Slovenia:
- milk and cream, non-condensed, non-sweetened, with fats contents of between 6% and over 45% - 50% reduction of the customs duty for a quota of 50 tons;
- cheese, destined for processing, brine cheese and yellow cheese from sheep milk and cow milk and other types – a quota of 50 tons with 50% reduction of the customs duty.
According to the provisions of the executed bilateral trade agreements, in cases of imports from Turkey of cheese for processing, with the exception of brine cheese and yellow cheese from sheep milk and cow milk, a quota has been provided for 100 tons at 21% customs duty (Annex No. 3 of the Customs Tariffs).
In cases of imports of brine cheese, yellow cheese, curds from Macedonia – 21% customs duty for a quota of 100 tons (Annex No. 4 of the Customs Tariffs).
According to Annex No. 6 of the Customs Tariffs, the preferential imports from Estonia include the following:
- milk and cream condensed, powder, granules or other solid forms, with fats contents of up to and over 1.5%, in packages of up to 2.5 kg – a quota of 200 tons with 50% reduction of the customs duty;
- milk and cream with fats contents of up to and over 27%, in packages of up to 2.5 kg – a quota of 150 tons at 13% customs duty;
- butter and milk spreads – 28% customs duty for a quota of 150 tons;
- brine cheese and yellow cheese – a quota of 300 tons with 60% reduction of the customs duty.
Milk and dairy products of origin from Croatia, for which customs duties are applied, are not higher than those specified in Annex No. 7.2 of the Customs Tariffs, which means that the lowest tariff of the quoted in the Annex customs duties in the columns for “conventional” and “autonomous” customs duties are to apply, i.e.:
- milk and cream condensed, sweetened – 37% customs duty;
- whey condensed or powder, other whey – 14% customs duty;
According to Annex No. 7.3 of the Customs Tariffs, in cases of imports from Croatia, a quota has been provided for 100 tons with a 50% reduction of the customs duty for butter-milk, yogurt and fermented milk, milk spreads.
The imports from Lithuania, specified in Annex No. 8 of the Customs Tariffs, include:
- milk and cream, condensed, sweetened – 30% reduction of the customs duty for a quota of 400 tons;
- butter and milk fats – 40% reduction of the customs duty for a quota of 100 tons;
- melted cheese – 40% reduction of the customs duty for a quota of 200 tons.
2.2. Exports of milk and dairy products
The current preferential customs duties for exports of milk and dairy products from Bulgaria include the following:
- milk and cream powder, granulated, or in other solid forms, with fats contents of up to and over 1.5%, without sweeteners – for the CEFTA member-countries – 37% customs duty for an unlimited quantity;
- yogurt – for exports to the Czech Republic and Slovakia: a quota of 100 tons at 10% customs duty; other types of milk and cream – 20% customs duty for an unlimited quantity;
- whey, condensed or sweetened – for CEFTA: 14% customs duty for an unlimited quantity;
- brine cheese, yellow cheese, curds - for the EU member-countries: duty-free exports within the framework of a quota of 6100 tons for the period from 01.07.2002 till 30.06.2003;
CEFTA: the Czech Republic and Slovakia - 5% customs duty for a quota of 100 tons;
Hungary – a quota of 150 tons for fresh and other types of cheese at zero customs duty;
Poland and Slovenia – 50% reduction of the customs duty for a quota of 50 tons;
For exports of dairy products to Macedonia: a quota of 300 tons of white brine cheese and 150 tons of yellow cheese at zero customs duty;
Turkey: a quota of 150 tons of cheese for processing and other types of cheese with a 50% reduction of the customs duty;
Israel: a quota of 80 tons of brine cheese and yellow cheese with 50% reduction of the customs duty;
Estonia: unlimited quantities of brine cheese and yellow cheese from sheep milk, cow milk or buffalo-cow milk at zero customs duty;
Lithuania: 200 tons of yellow cheese with a 40% reduction of the customs duty.
According to the new round of agreements with the EU concerning the trade in agricultural products, the following additional agreements were reached, to become valid as of 01.06.2003:
For imports into the EU:
- yogurt – a quota of 250 tons for the period from 01.07.2002 till 30.06.2003 and 500 tons for the period from 01.07.2003 till 30.06.2004 at zero customs duty, with no export subsidies to be provided for the product;
- brine cheese, yellow cheese, curds – a quota of 6100 tons for the period from 01.07.2002 till 30.06.2003 and 6400 tons for the period from 01.07.2003 till 30.06.2004 at zero customs duty, with an annual increase of the quota by 300 tons after the 01.07.2004, without provision of export subsidies.
For imports into Bulgaria:
- milk and cream powder, granulated, or in other solid forms, with fats contents of up to and over 1.5% - 10% customs duty for a quota of 2977 tons for the period from 01.07.2002 till 30.06.2003 and 3 000 tons for the period from 01.07.2003 till 30.06.2004;
- butter and milk fats – 20% customs duty for a quota of 87 tons for the period from 01.07.2002 till 30.06.2003 and 100 tons for the period from 01.07.2003 till 30.06.2004;
- brine cheese, yellow cheese, curds – zero customs duty for a quota of 2700 tons for the period from 01.07.2002 till 30.06.2003 and 3 000 tons for the period from 01.07.2003 till 30.06.2004, with an annual increase of the quota by 300 tons after the 01.07.2004, without provision of export subsidies.
3. Agriculture State Fund
The Agriculture State Fund provides financial aid to agricultural producers by providing subsidies, special-purpose credits, covers fully or partially the expenses for interests on bank credits, provides guarantees and provides collateral before the financial institutions, provides the funds for joint financing of special purpose projects according to the EU programs with reference to the development of agriculture and the rural areas.
In accordance with the provisions of Art. 12, clause 1, item 2 and clause 2, item 1, letter ”a” of the Aid for Agricultural Producers Act and Resolution of the Board of Directors/Minutes of Meeting No.2 dated 28.01.2003/, the Agriculture State Fund established a special-purpose subsidy to the amount of 5000000 BGN for produced and sold cow milk, buffalo-cow milk and sheep milk of Extra and First quality, according to the requirements of Regulation No. 30 on veterinary and sanitary requirements for the production of raw milk /as per Annex No. 3 to the Regulation/.
The agricultural producers are subsidized for produced and sold cow milk, buffalo-cow milk and sheep milkof Extra and First quality during the period from 01.02.2003 till 31.10.2003, up to the expiry of the limit value of the subsidy.
The value of the subsidy is, as follows:
- For extra quality cow milk - 0.06 BGN per liter
- For first quality cow milk - 0.05 BGN per liter
- For first quality buffalo-cow milk - 0.07 BGN per liter
- For first quality sheep milk - 0.07 BGN per liter
For the Rhodope Mountain region, the subsidy is increased according to the type and quality of the product by 0.01 BGN/liter of milk, with the required funds being provided by the “Rhodope” Program.
². Requirements on entitlement to the subsidy1. Any agricultural producers, who have non-performed contractual obligations with reference to the Agriculture State Fund according to financing lines and programs with due payments, are not entitled to this special-purpose subsidy.
2. Agricultural producers are entitled to the special purpose subsidy, if they:
- Are registered as “agricultural producers” at the respective “Agriculture and Forestry” Regional Department;
- Have executed a contract with a milk-collection facility or a milk-processing facility, which has obtained an operational license from the State Veterinary and Sanitary Control;
- Submit a certificate for lack of unpaid taxes in accordance with the provisions of Art. 182, clause 1 of the tax Procedural Code /original or certified by a public notary copy/;
- Enclose a certificate from the Regional Social Security Department for lack of unpaid social security installments.
3. Agricultural producers shall be entitled to the special-purpose subsidy against presentation of:
- Expense account documents /original invoice and two copies of the same or 2 cash expense orders for real persons, certified by the wet seal of the milk-processing facility/;
- Certificate of quality /according to the form/ from the laboratory of the State Veterinary and Sanitary Control for the analyzed raw cow milk, buffalo-cow milk and sheep milk, sampled from the milk-collection facility twice every month;
- Receipt for the paid tax for the analyzed sample according to the price list of the State Veterinary and Sanitary Control.
²². Terms for receiving the subsidy1. The Regional Departments shall provide assistance to the agricultural producers in the preparation of the documents in accordance with the provisions of hereof;
2. The Regional Department of the Agriculture State Fund shall send once to the Central Headquarters a complete file to be signed (i.e., approved). The Regional Department shall send to the Headquarters an application for the payment of the due subsidies to the entitled agricultural producers for the consequent periods with enclosed therewith copy of the invoice of expense cash order, certificate of quality, sworn statement on the number of animals bred, and 3 /three/ copies of applications to be signed;
3. The documents must be submitted to the Regional Department every two months not later than the 20th of the consequent month up to the expiry of the funds;
4.The subsidy shall be transferred directly to the agricultural producers through the Regional Directorate not later than the 05.12.2003;
5. Prior to sending the file to the Central Headquarters, the data on the agricultural producer and the parameters of the requested subsidy shall be input into a LOTUS database. No files shall be submitted for approval, if the same have not been input into the database, of a mistake has been made;
6. The file on each agricultural producer, which shall be kept on record at the Regional Department of the Agriculture State Fund, must contain the following:
6.1. Application according to form – 3 copies /a single application must be submitted within the specified payment period/;
6.2. Court resolution for the registration /for the legal entities and private companies/;
6.3. Certificate of the current legal status of the legal entity or private company, issued once, at the start of the special-purpose line;
6.4. Copy of the original invoice or expense cash order for the real persons, certified by the wet seal of the milk-processing facilities;
6.5 Certificate of quality;
6.6 Sworn statement with indicated bank account and code of the servicing bank;
6.7. Sworn statement on the number of animals bred;
6. 8. The documents specified in item 2 of Section II;
7. The agricultural producers, who are real persons (not legal entities), shall not submit the documents specified in items 6.2 and 6.3;
8. In case of submission of documents with untrue data, including falsified data, the subsidy shall be subject to reimbursement and the persons, who have received the same, shall be obliged to reimburse the same to the Agriculture State Fund, complete with the legal interest from the day of its receipt and shall be subject to prosecution in accordance with the provisions of Art. 313 of the Penal Code.
Within the first two months as of the starting of the subsidy (February and March), a total of 3 056 agricultural producers have applied for the subsidy for quality milk and 26% of the foreseen funds have been paid out. Subsidies have been provided for 22302658 liters of milk, including 14656663 liters of extra quality milk and 7645995 liters of first quality milk. The distribution according to the various types of produced and subsidized milk is the following: 22059110 liters of cow milk; 176860 liters of sheep milk; 66688 liters of buffalo-cow milk.
For the year 2003, the “Animal Breeding” Program of the Agriculture State Fund has planned to provide financial aid to the amount of 11000000 BGN. The funds according to the program shall be used for the realization of investment projects in the following fields with the quoted terms for repayment:
1. Purchase of parent stock and reproductive animals:
- Pregnant cows and cows with a second calf (minimum 10 heads/ with a term for repayment of the credit within 48 ìåñåöà, including a gratis period of up to 18 months;
- Pregnant buffalo-cows and buffalo-cows with first buffalo-calf /minimum 10 heads/ with a term for repayment of the credit within 48 ìåñåöà, including a gratis period of up to 18 months;
- Pregnant sheep, sheep with second lamb, and young sheep prior to pregnancy /minimum 50 heads/ with a term for repayment of the credit within 30 ìåñåöà, including a gratis period of up to 12 months;
- Pregnant she-goats and she-goats with second lamb /minimum 50 heads/ with a term for repayment of the credit within 30 ìåñåöà, including a gratis period of up to 12 months;
2. Purchase of agricultural equipment /machinery, equipment, and appliances/ for animal breeding – term for repayment of the credit up to 36 months, including a 9-month gratis period;
Means of financing of the investment projects according to items 1 and 2:
- The Agriculture State Fund finances directly investment projects to the value of 50000 BGN;
- Investment projects to the value of over 50000 BGN shall be financed by means of refinancing through the commercial banks.
3. New construction of agricultural buildings for animal breeding and feed plants for providing feed for the farmer’s own farm – term for repayment of the credit up to 42 months, including a 12-month gratis period;
4. Purchase of agricultural buildings for animal breeding, feed-mill plants for the farmers’ own needs, and milk collection facilities, including their appurtenant lands – term for repayment of the credit up to 36 months, including a 9-month gratis period;
5. Reconstruction and repairs of agricultural buildings and facilities for animal breeding feed-mill plants for the farmers’ own needs, and milk collection facilities – term for repayment of the credit up to 36 months, including a 9-month gratis period;
The personal participation of the agricultural producer must amount to 30% of the total value of the investment, including V.A.T., customs duties and taxes.
The method of financing is by refinancing through the commercial banks, with which the Agriculture State Fund has executed the required contracts.
The final term for implementation of the program is 31.12.2003.
A special-purpose subsidy has been established by the Agriculture State Fund for aiding the process of selection and reproduction in the field of animal breeding, as of 18.02.2003 to the amount of 4000000 BGN. The provided funds shall aid the feeding of valuable from genetic point of view agricultural animals and birds, the processes of selection and reproduction, and the veterinary prophylactics, disinfection, and sanitation of the animal farms. The funds shall be distributed, as follows:
- For aiding the maintenance of valuable breeds of animals and birds from the national genetic fund – 2178902 BGN;
- For aiding the maintenance of the elite part of the population – 1318044 BGN;
- For import and purchase of elite animals for restoration of the genetic fund and their partial maintenance – 433035 BGN;
- 80% of the subsidy shall be used for feeding /grain, combined feed, groats, and other components/ the animals;
- 20% for sanitation of the facilities, prophylactics, and selection activities /fencing, disinfection, construction of sanitary filters, and disinfection sites, purchasing of sexing appliances, selection nests, and installation of notice boards with the name, origin, characteristics, etc./.
The following shall be provided by the Agriculture State Fund upon approval of the subsidy for each animal:
². Aid for the maintenance of the parent stock from the national genetic fund – 2178902 BGN;
1. Cattle – BGN per head
Cows
- Breeds, endangered by disappearance 120 BGN
- Breeds with dropping population 140 BGN
- Breeds of constant and growing importance: milked breeds 111 BGN
Buffalo-cows- Breeds of constant and growing importance 120 BGN
2. Goats and sheep – BGN çà åäèí áðîé
Mother sheep- Breeds, endangered by disappearance 30 BGN
- Breeds with dropping population 29 BGN
- Breeds of constant and growing importance: milked breeds 25 BGN
She-goats- Breeds of constant and growing importance 21 BGN
²². Imports and purchasing of elite animals for restoration of the genetic fund and their partial maintenance – 433035 BGN
1. sheep and goats – 235 200 BGN
Sheep breeding: milked breeds – 72000 BGN
- Of the
Asaf breed:
Rams 10 heads õ 1200 BGN = 12000 BGN
- Of the
Romanov breed:
Rams 5 heads õ 1200 BGN = 6000 BGN
Young sheep prior to pregnancy 50 heads õ 600 BGN = 30000 BGN
- Of the
Eastern Fresian breed:
Rams 20 heads x 1200 BGN = 24 000 BGN
Goats breeding: 12000 BGN
- Male
reproductive animals of the Togenburg breed – 10 heads and Saan breed
– 10 heads
Total: 20 heads õ 600 BGN = 12000 BGN
The final term for the imports and purchasing of the elite animals for restoration of the genetic fund and their partial maintenance is 31.05.2003.
²²². Aiding the maintenance of animals and birds of the elite part of the population - 1318044 BGN
1. Cattle
- Bull producers 120 BGN
- Pregnant cows and buffalo-cows 52 BGN
- Daughters of tested bulls 60 BGN
- Male calves and buffalo-calves 60 BGN
2. Sheep and goats
- Ram producers 20 BGN
- Young rams in ram producing stock 20 BGN
- Young lambs and she-goats of proven origin 10 BGN
The final term for contracting the special-purpose subsidy is 15.07.2003, and for its expenditure 25.08.2003.
4 . SAPARDWith reference to the improvement of the processing and marketing of the milk and of the dairy products, the SAPARD Program plans to provide financial aid according to Measure 2 for the following: