Dairy System Reform Plan Stalemate Between Dairy Farmers and Dairy Industry... Raw Milk Price Still Undecided

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-yoon] Negotiations between dairy farmers and the dairy industry over the reform plan of the dairy system are showing little progress. The raw milk price to be applied from next month has not yet been decided.

According to the industry on the 27th, dairy farmers and the dairy industry have not yet narrowed their differences regarding the introduction of a differential pricing system for raw milk based on its use. The Raw Milk Basic Price Adjustment Negotiation Committee, responsible for negotiating raw milk price adjustments, has not been formed as of this day. The negotiation committee consists of three representatives from milk producers (dairy farmers), three from dairy companies, and one academic member. The dairy companies have not yet recommended their members.

The dairy industry maintains its stance that it will not participate in negotiations unless the dairy system reform, which includes the introduction of the differential pricing system by use, is a prerequisite. The differential pricing system divides raw milk into drinking milk and processed milk, maintaining the current price level for drinking milk while setting a lower price for processed milk. This is a key element of the government’s proposed dairy system reform plan.

On the other hand, dairy farmers oppose the system’s introduction, citing a decrease in farm income. They argue that if the price of the same raw milk is set differently by use, the losses to farms will reach an unmanageable level. Some dairy farmers are even showing signs of refusing to supply raw milk.

According to related regulations, if negotiations ultimately fail, the existing raw milk price will be maintained. In this case, concerns are emerging that farmers demanding price increases may launch a hardline struggle, potentially causing a "milk crisis." With production costs such as feed prices having risen significantly, if raw milk prices remain unchanged, farmers’ opposition is expected to intensify. If the refusal to supply continues, it is anticipated that not only farmers and the dairy industry but also the food service industry and consumers will be directly and indirectly affected.

This content was produced with the assistance of AI translation services.