After Montenegrin farmers again poured milk last week because some dairies were unable to purchase it due to surpluses, the same scenario of emergency meetings and temporary solutions is repeating itself.
At the suggestion of the Ministry of Agriculture, Forestry, and Water Management (MAFWM), retail chains have expressed willingness to support domestic producers, announcing plans to withdraw stocks from dairies so that they can continue purchasing from farmers. Urgent exports of surpluses to neighboring countries have also been proposed. However, experience has shown that once the crisis subsides, domestic production is once again left without a clear plan or adequate protection.
Temporary solution
Although a temporary measure has been found to prevent greater losses for farmers, it has not resolved their dissatisfaction. They argue that the government only responds “when the water reaches the floor” and that the systemic problem is not being addressed in the long term.
According to the Association of Milk Processors of Montenegro, the three largest dairies in the country purchase around 56% of total milk production, reaching nearly 50 tons per day. Milk production is perishable, and occasional surpluses are expected due to mismatches between production, processing, and consumption, as well as the lack of a long-term strategy for marketing domestic products. Additionally, both European and regional markets are currently saturated with surpluses.
“A temporary solution has been found, and we are grateful that Voli was the first company to initiate an agreement and express readiness to help domestic producers. Farmers are in the greatest difficulty because dairies cannot purchase all quantities. However, this can only be a temporary measure. Long-term, we need systemic solutions,” the Association said. They added that surpluses are expected in the coming months as well, and although the number of farms and yields is increasing, challenges remain in product distribution.
Ranko Bogavac, Head of the Directorate for Agriculture at the Ministry of Agriculture, emphasized after last week’s meeting with farmers and processors that the ministry cannot meet their requests regarding import restrictions, as Montenegro is a signatory of the CEFTA agreement, which obliges free movement of goods. However, the Association notes that CEFTA allows for temporary measures in crisis situations.
“Although Montenegro is a CEFTA member, the state has the right in times of crisis to limit imports for up to two years. This is not just a matter for the Ministry of Agriculture, but also for the Ministries of Finance and Economic Development. We must work together to protect domestic production,” the Association stressed.
Protecting the domestic market
The Association points out that many countries in the region and the EU have protected their markets in similar situations. For example, Hungary completely halted food imports during the pandemic, while Serbia repeatedly introduced temporary bans and import duties.
“In previous years, to handle surpluses, we exported them at lower prices, usually to Bosnia and Herzegovina, to maintain production continuity. This year it is more difficult because the region also has surpluses,” the Association explained. They also highlight mismatches with the public procurement system.
“There hasn’t been a single meeting at the Ministry of Agriculture or the Chamber of Commerce where we didn’t emphasize that domestic products should be supplied to public institutions. Yet, some institutions continue to use imported products,” milk processors noted.
In November, they expect more non-working days, followed by the period of religious holidays and fasting, which will again lead to stock accumulation. They stress the need to establish an expert team to permanently resolve this situation. They conclude that milk market stability cannot rely on one-time interventions but requires a clear strategy and support for domestic processing to reduce dependence on imports and ensure the security of local production.
The CEFTA agreement aims to facilitate trade among member states by removing barriers. Members include Montenegro, Serbia, Albania, Bosnia and Herzegovina, Kosovo, Moldova, and North Macedonia. While the agreement is often cited as a limitation when intervention is needed, the Association notes that if the state considers the market seriously threatened by increased imports from another member, it can temporarily deviate from free trade obligations.
“Measures can be introduced if there is serious harm or a threat to domestic industry, if the disruption affects sensitive sectors such as agriculture, and if imports significantly destabilize the market,” the Association explained. To implement such measures, statistical data on imports, prices, and production must demonstrate the disruption. All CEFTA members must be notified, and emergency temporary measures can last up to 200 days, or permanent protective measures can be applied for up to two years, extendable for another two.
Regional examples
If conditions are met, the state could raise tariffs on certain products, impose quotas, restrict imports, temporarily ban the import of certain goods, or subsidize domestic production, provided competition is not disrupted. CEFTA members have used these options in the past. In Serbia, import duties were applied to dairy products and cheese, temporary export bans were imposed on flour and oil, and similar measures occurred in Albania for pharmaceuticals and in Bosnia and Herzegovina and Kosovo for milk, dairy products, and fruits and vegetables.