MILK IS CHEAPER THAN WATER: "ASHTARAK MILK" PAYS VILLAGERS 80-85 AMD PER LITER
Voskan Sargsyan
2009/08/2 4 | 16:07
Feature Stories marzes
Of the four districts in Tavush Marz, Berd is the most remote. One
could say the district is cut off; a no man’s land. Local villagers
have a hard time selling their crops and dairy products in the
large markets. It’s 62 kilometers from the town of Berd, the former
administrative district center, to the present regional center of
Ijevan, and 199 kilometers to Yerevan.
The highway linking Yerevan with Berd is in pretty decent shape except
for the pot-holed stretch through the village of Vazashen. Once you
leave Berd, however, the 20-25 kilometer stretch of road linking
outlying villages to the former district center is almost impassable.
Villagers in these remote communities have no possibility of selling
their agricultural goods in the capital, Yerevan. They simply cannot
compete with the farmers in the Ararat valley, for whom the Yerevan
markets are merely minutes away. Thus, what are sorely needed in
the Berd area are centers to collect the locally grown crops. If
such centers were built it would greatly reduce the unemployment now
afflicting the border regions of Tavush and other marzes. Then too,
the exodus of people from these sensitive border regions would also
be slowed.
With the assistance of CARD (Center for Rural and Agro-Business
Development) a milk collection units were set up in the villages of
Tavush, Varagavan, Navour and Nerkin Garmiraghbyur. A similar unit
was launched in the village of Norashen. This unit was established
in the framework of the Small Commercial Agricultural Development
Program. Pavel Tsutsoulyan, who heads the program’s support team in
Tavush, says that this milk collection unit was put into operation
last year at the cost of 15 million AMD. The Norashen unit was
envisaged to serve the communities of Norashen, Tchoratan and Verin
Garmiraghbyur. It was established in collaboration with the firm
Ashtarak Milk. The company supplied the unit with the necessary
technical equipment. For the most part, all the units in the area
supply Ashtarak Milk with the raw milk they’ve collected.
On August 7, during a speech at a session of the Tavush Regional
Council, Vahan Karapetyan, Director of the Tavush Regional Center for
Agricultural Assistance, directed the attention of Tavush Regional
Administrator Armen Ghularyan and regional community leaders to an
issue of major concern – that the milk collection units in the Berd
district have basically ceased to operate due to low milk prices. It
turns out that villagers aren’t willing to sell their product at such
ridiculously low prices.
Pavel Tsutsoulyan says that Ashtarak Milk pays 80-85 AMD on average for
one liter of milk produced in the Berd district. The company only buys
milk at this price if the fat content meets its standard of 3.8%. For
milk with a higher fat content, the company pays 90-95 AMD per liter.
Hratzin Grigoryan, a Tavush village resident and agro-advisor to
the Tavush Agricultural Assistance Center has an explanation for the
local milk collection unit’s practices. He says that Ashtarak Milk
imports inexpensive dried milk from overseas which it uses to produce
its liquid milk, thus having no need to collect milk in Tavush. When
demand exists, villagers can sell their milk at a higher price to
fellow residents or turn the milk into fat or cheese. The number of
those buying milk in the villages isn’t great, however, and the milk
collection units built with credit or other means along the border
areas are doomed to stand idle.
On August 12, Prime Minister Tigran Sargsyan met with editors of
regional papers in the Government Building. Taking advantage of the
opportunity we asked PM Sargsyan to speak about the low prices paid
by Ashtarak Milk and the fact that the collection units are going idle.
"The milk issue is of major concern today. One of the theories
making the rounds is that milk prices have dropped because fried
milk powder is being imported in great quantities to Armenia. During
the first six months of this year, twice as much dried milk has been
imported to Armenia than last year. Naturally, many plants prefer to
use the powered milk since it’s cheaper. Now we have decided to keep
the same customs value on powdered milk as last year. This can only
have a positive impact on the conditions faced by our domestic milk
producers. I hope that we can feel the effects of this decision in
the next few months," answered PM Sargsyan.
When we asked Tatevik Ghabazyan, Ashtarak Milk’s Public Relations
Director, why the company was paying such low prices for milk produced
in the Berd district and whether it was due to the cheap milk powder
being imported, she answered that the company has never imported
milk or milk powder from overseas. Ashtarak Milk has its own plant
to produce milk powder. During the summer, some of the fresh milk is
made into powder.
Director Ghabazyan assured us that prices paid at the collection
units were based on market conditions.
Director Ghabazyan also informed us that on average the company
sells every liter of milk it produces for 300-350 AMD. After being
reprocessed, milk can be sold at 4x the price. But isn’t it true that
the by-products of reprocessing, such as whey, which is a good way to
fatten pigs, also has a certain price and can bring in supplemental
revenue to the reprocessing plants?
Presently, a half liter of regular spring water is sold in stores
for about 100 AMD. In bigger plastic containers, a half liter of
non-carbonated spring water sells for 120 AMD. The container itself
has a cost attached to it, which includes the wages paid to workers,
production costs and taxes. If we deduct these costs from the price
it turns out that regular spring water isn’t cheaper than the milk
being collected.
At the above mentioned Tavush Regional Council session, Regional
Administrator Armen Ghularyan promised that he’d meet with the
executive director of Ashtarak Milk in the near future and that they’d
discuss the issue of low milk prices in the district.