Dairy System Reform Accelerates... Prices of 'Drinking Milk and Processed Milk' to Change from Next Year

[Asia Economy Sejong=Reporter Son Seon-hee] Starting next year, a 'differentiated pricing system by usage' will be introduced, setting different prices for drinking milk and processed milk. It is reported that after months of government-led negotiations on dairy system reform, dairy farmers, dairy industry, and consumer groups have reached a broad consensus.

According to the Ministry of Agriculture, Food and Rural Affairs on the 4th, at a meeting held on the 2nd chaired by Deputy Minister Kim In-jung with producers, demanders, and consumers participating, consensus was formed on the government proposals including ▲introduction of differentiated pricing by usage ▲improvement of raw milk price determination method ▲restructuring of the Dairy Promotion Board's decision-making system.

In the initial phase of introduction, opinions converged on applying the drinking milk price to 1.95 million tons based on production volume, and the processed milk price to an additional 100,000 tons produced. Additionally, the price determination structure will be reorganized to reflect supply and demand conditions alongside production costs.

The decision-making structure of the Dairy Promotion Board will also change. The board will convene with a majority of directors present and pass resolutions by majority vote, with amendments to the articles of incorporation to allow a wide range of dairy-related agenda items to be discussed broadly at board meetings. Furthermore, the board is considering expanding the number of neutral members such as consumers and academics from the current 15 to 23.

Producers agreed on introducing the differentiated pricing system by usage from a grand perspective of enhancing the sustainability of the dairy industry, but pointed out that due to the sharp rise in feed prices, the number of farms experiencing deteriorated management conditions has greatly increased, making a raw milk price increase urgent. They requested the dairy companies to start raw milk price negotiations promptly.

Dairy companies agreed with the introduction of the differentiated pricing system by usage but stated that the agreed '1.95 million tons of drinking milk' is more than actual demand, so active government support is necessary for raw milk procurement.

Based on the discussion results of the meeting, the government plans to establish a consultative body within the Dairy Promotion Board after board approval to prepare detailed implementation plans and proceed with raw milk price negotiations through a subcommittee.

Regarding this, Minister Jeong Hwang-geun of the Ministry of Agriculture, Food and Rural Affairs met with Lee Seung-ho, president of the Dairy and Beef Cattle Association, and Maeng Gwang-ryeol, chairman of the Dairy-related Cooperative Chairmen Council, the day before, saying, "It is very meaningful for the dairy industry that producer organizations have broadly agreed on the direction of system reform from a grand perspective," and urged, "Please recognize and work together that the dairy system reform is for the sustainable development of the dairy industry."

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