Agriculture, Baltic States – CIS, Latvia, Legislation, Markets and Companies

"Unfortunately, we are beginning to feel the consequences of Russia's embargo – although indirectly, they are strong enough. Farmers' solvency has decreased steeply, and they cannot afford to buy enough fodder for cattle. We are holding individual talks, trying to solve the problem via advance payments, but overall this has become quite a pressing problem," said Amsils.

Farmers' solvency has fallen in dairy and pig farming sectors, explained Amsils.

"Dairy farmers' solvency has suffered due to the low prices for milk set by dairy companies, which in turn are having problems with selling their products due to the embargo. Pig farmers, on the other hand, have slaughtered their livestock due to African swine fever. As a result, the number of fodder buyers has decreased, and the remaining ones are struggling," said Amsils.

Asked to comment on this year's grain harvest, Amsils notes that harvest is good in terms of amount, but the quality is not as good as anticipated, which means extra cost for farmers as they have to dry the grain.

"At the start of the harvest period, grain was of very good quality, but then the rains set in and now about 80% of grain is at best good for cattle fodder. The higher moisture content means additional costs, for us and farmers alike, because grain has to be dried to be good to be stored," said Amsils.

Dobeles dzirnavnieks closed 2013 with EUR 84.8 million in turnover and EUR 2.8 million in profit. The company processed about 150,000 tons of grain last year, whereas investments in the company's production lines amounted to EUR 10 million in 2013.

Dobeles dzirnavnieks was established in 1994. Estonian flour producer Tartu mill acquired 90% of the company's shares in 2008.