In the heart of Europe, a quiet revolution is brewing, one that could reshape the dairy industry and have significant commercial impacts across the continent. A recent study published in the German Journal of Agricultural Economics, titled “Dairy chain competitiveness in EU’s new member states, candidate and potential candidate countries,” sheds light on the current state and future potential of the dairy sector in 20 south-eastern and eastern European countries. The research, led by Siemen van Berkum, offers a compelling narrative of structural change, challenges, and opportunities.
The dairy industry in these regions has long been dominated by small-scale and subsistence farming, a legacy that has hindered vertical integration and modernization. However, the tide is turning, albeit at different paces. “Even after many years of structural change, the sector is still dominated by small-scale and subsistence farming,” notes van Berkum. This dominance results in weak vertical integration in most countries, except for the Czech Republic, Slovakia, Cyprus, and Malta.
The study highlights positive tendencies in the Baltic States and Poland, where industry performances indicate a promising future. These countries are beginning to see the fruits of investment and modernization, with productivity and product quality on the rise. However, the sector faces serious difficulties elsewhere. In Romania, Bulgaria, and all candidate and potential candidate countries, the industry struggles to comply with food quality and safety standards. This non-compliance poses significant barriers to market access and competitiveness.
The research underscores the need for vast investments across the supply chain to boost productivity and enhance product quality. “A major restructuring of the supply chain is expected in the upcoming years,” van Berkum predicts. This restructuring could pave the way for increased competitiveness, improved market access, and enhanced commercial opportunities.
The findings have profound implications for the energy sector as well. As the dairy industry modernizes, it will require more efficient and sustainable energy solutions. This presents an opportunity for energy providers to innovate and offer tailored solutions that meet the unique needs of the dairy sector. From renewable energy sources to energy-efficient technologies, the potential for collaboration and mutual growth is immense.
The study, published in the German Journal of Agricultural Economics, which is known in English as the Journal of Agricultural Economics, serves as a call to action for policymakers, industry stakeholders, and investors. It highlights the need for targeted investments, policy support, and strategic planning to drive the dairy sector’s transformation. As van Berkum aptly puts it, “The future of the dairy industry in these regions is not just about milk and cheese; it’s about economic growth, job creation, and sustainable development.”
The research by van Berkum and his team offers a roadmap for the future, one that could see the dairy sector in south-eastern and eastern Europe become a powerhouse of competitiveness and innovation. As the industry undergoes its major restructuring, the opportunities for commercial growth and collaboration are vast. The question is, who will seize them?