In Ukraine, the beginning of the new year for dairy producers has been marked with decrease in milk prices. Milk processors explain the fact by the changes in the mechanism of state subsidies to dairy and meat producers in the context of the new Tax Code.

Accordingly, starting from January 1, 2011, dairy and meat producers will be paid state subsidies for the head kept on the farm on January 1, 2011, and not for the kilo of milk and meat delivered for processing.

Due to the changes in the state subsidy mechanism, milk prices are down by 15-20% depending on the milk processing companies. On January 11, 2011 average milk prices were fixed at the following level: for corporate sector – 3.0 UAH/kg and for individual producers – 2.0 UAH/L.

*milk prices in UAH/L

Figure 1. Milk prices in Ukraine in 2010 (according to the info from processing companies)

*milk prices in UAH/L

Figure 2. Milk prices in Ukraine (according to the info from processing companies)

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