Experts warn that plans to regulate the milk market in Lithuania could negatively impact farmers due to the volatile nature of global raw milk prices.
In recent discussions across Europe, the rising prices for raw milk purchasing have raised concerns about the impact of market regulation in Lithuania. Economists point out that in Lithuania, the price of raw milk primarily depends on fluctuations in global dairy product markets, hence attempts to regulate local prices may have limited effectiveness. They emphasize that any regulated market is inherently riskier for businesses, particularly when raw material prices can change rapidly.
Alexandras Izgorodinas, an economist from Citadele bank, argues that while it's vital to protect vulnerable participants in the food supply chain, such as farmers and livestock businesses, the interests of the dairy processing sector should not be overlooked. This balance is necessary to ensure that while protecting farmers, the wider market does not collapse under stringent regulations that could hinder operational viability.
The context of this discussion is particularly relevant given recent geopolitical tensions, such as conflicts in Iran, which have created uncertainty in agricultural raw materials and food production markets globally. The swiftly changing costs pose serious challenges, highlighting the need for careful consideration before implementing any regulatory measures that could inadvertently exacerbate the situation for farmers rather than aid them.
