Many small dairy farmers in South-Eastern Estonia face financial hardship following the bankruptcy of a major cooperative.
AS E-Piim, Estonia’s largest cheesmaker, was declared bankrupt earlier this month, leaving many suppliers unpaid and forcing herd reductions.
The Ivaski farm in Antsla, Voru County, is owed nearly EUR 50,000 in milk payments by the cooperative owned by E-Piim. The farm has started sending animals to slaughter to cover operating costs, owner Karmo Poder has said.
“We have been covering these monthly expenses simply by looking at the list of animals and making choices. The easiest way is to sell animals; there’s nothing else to take from,” Poder said.
Meanwhile Klaarika Hirv, owner of the Korgemae farm, in Voru Municipality itself and who attended Monday’s meeting held by the E-Piim-owned milk cooperative, said they are owed even more – EUR 60,000.
E-Piim had been the sole cooperative to buy from smaller suppliers, leaving the latter with little choice on who to sell to, and meaning recovery of funds owed seemed unlikely.
“Our conclusion is that it’s not really going to be viable for us to get that money – that message was clear. Of course, we hope for the better, but that’s the situation. It is tough because we have again sent four animals to slaughter; meat prices are good, and that lets us get through another month. What will happen next month, we don’t yet know,” Hirv noted.
“We have called Finnish dairy concern Valio, we have called Estonian dairy producer Tere, but no one is buying our milk, and that’s why we are stuck. There are about 40 producers like us who are putting their heads together, wondering what will be next,” Hirv added.
Triinu Koor, owner of Metskula Piimamees operating in Polva County, has been part of the E-Piim cooperative for almost 11 years, and the sums the cooperative owes for milk are also significant for the company. Some suggestions have been unhelpful too, Koor has said.
“One thing was downright absurd – they suggested taking out a loan, a working capital loan, or selling our farmland so that at some point, if things get better – if they get better – we could buy it back,” Koor said.
Another farm owner, Ole Musting, of Kulmsoo farm near Polva, said that although they sold their output to Lithuania, E-Piim’s bankruptcy had exerted a downward pressure on milk purchase prices across the Baltic States market.
“Milk processors who use this option are taking advantage, since they don’t need as much milk themselves, allowing them to impose prices on others that are significantly less favorable,” Musting said.
A court declared AS E-Piim Tootmine bankrupt on March 11, a month after filing, and appointed Indrek Lepsoo and Olev Kuklase as trustees. This followed failed negotiations among owners to secure new capital, and the company’s CEO Anti Orav confirmed lack of investment as the key reason for bankruptcy.
The proceedings will assess the company’s finances, creditor recovery, and potential asset sales. Multiple companies have shown interest in acquiring the business through bankruptcy, while E-Piim says its functioning factory, workforce, and milk supply support finding a solution. The company employs nearly 200 people and operates facilities in Paide, Poltsamaa, and Jarva-Jaani. Most of its output is exported. (ERR)