Economical aspects of milk processing industry under conditions of dispersed agriculture – study of a chosen region in poland

Low costs of raw material production in comparison with milk production costs in the EU-25 countries are strengths of the Małopolska dairy sector. Low costs of milk production result primarily from the extensive character of production on a majority of dairy farms, dispersion and outdated technologies, lower hygiene and veterinary standards and low remuneration for work in agriculture forced by high unemployment rate and lack of any other sources of income. Simultaneously the same factors are basic causes of low profitability of milk production and lack of funds for its modernization, thus being the main weaknesses of the Małopolska dairy sector. Small farms prevail among milk producers, which makes the structure of milk suppliers for processing greatly dispersed over the whole region. The dispersion most unfavourably affects raw milk quality and competitiveness of final dairy products.