The Hungarian milk industry is ready to begin operations within the new system following the EU’s withdrawal of milk quotas from 1 April, and is expected to be one of the winners of the changes, Minister of State for Agricultural Economy György Czerván said.
The Minister of State stressed that although the termination of the milk quota brings about new challenges, it also represents a new opportunity for the Hungarian milk sector. It is important that we have a fundamentally calculable funding system, and such a system is already at our disposal until 2020, he pointed out. There is also a need for a strong inter-disciplinary organisation, which is also already present, and with which the Ministry has a close relationship, he noted.
Mr. Czerván also emphasised that the processing industry requires further development, to which end some 300 billion forints (EUR 1bn) are available from rural development resources within the 2015-2020 period.
The Ministry has also succeeded in increasing the sector’s direct funding from the current level of 26 billion forints to some 50 billion forints per annum. This includes both EU and national funding. Furthermore, following consultations with the Milk Marketing Board, a 420 million forint fund is to be established to finance the promotion of high quality Hungarian milk, he added.
According to Mr. Czerván, with regard to the new system it is important to increase the efficiency of the National Food Chain Safety Authority (NÉBIH) and National Tax and Customs Authority (NAV) monitoring, for instance to prevent VAT fraud within the milk sector and to achieve the further “whitening” of the economy. The introduction of the Electronic Road Freight Monitoring System should also facilitate the latter goal, he noted.
The withdrawal of milk quotas means that there are now no limits to milk production within the European Union. The Minister of State pointed out that the majority of EU member states had so far not used their full milk quotas, and Hungary too has only made use of some 75-80 percent of this opportunity.
Chairman of the Milk Marketing Board Tibor Mélykúti said that a new element of the government reduction of utility charges could be a decrease of the VAT level of milk products to 5 percent, adding that the Board had already recommended such a reduction during the course of the year. Hungarian consumers are extremely price-sensitive, and more than half of Hungarian milk product is consumed in the form of milk itself, he pointed out.
Mr. Mélykúti also mentioned that the Milk Marketing Board had gained strength in recent years, as proven by the fact that the Minister had acknowledged it as a representative inter-disciplinary organisation in 2013.
The Chairman of the Board expressed his hope that some of the 300 billion forints available for the development of the food industry until 2020 will also be put towards further developing the milk sector. The inter-disciplinary organisation also hopes to spend some 150-180 million forints-a-year on milk marketing from its own resources, he indicated.
(Ministry of Agriculture)
