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Dairy Crisis: Hearing of the EU Group of Experts on milk on November 10th

9 November 2009

Position of the European Coordination Via Campesina at the hearing of the EU Group of Experts on milk

Hearing of the EU Group of Experts on milk – November 10th- 11h15 Position of the European Coordination Via Campesina Preamble Before answering the 3 questions raised by the Group, we want to draw your attention to the fact that the 6 questions the Agricultural Council charged the Group to examine omit several essential points that it is essential to approach: - the regulation of the production : it is a necessary condition for market regulation, which is indispensable for fair prices of milk for producers (which remunerate the costs of production and work) and consumers. The EU Court of Auditors recognized the positive role of the dairy quotas: the European Coordination Via Campesina requires their maintenance and their improvement. When the production is higher than the demand, the EU has to decrease them at the appropriate rate. It is just a question of adapting the production to the market, as the European Commission repeated to producers since 1992. - export refunds : they are expensive for taxpayers, can ruin the local dairy economies in third countries, and do not tackle the roots of the surpluses. To stop the dumping of the EU is one of the requirements for the implementation of food sovereignty. - structures of production and modes of production: The EU should stop to concentrate the dairy production in increasingly larger, more intensive farms, dependent on plant protein imports: these farms are not qualified to face the climatic and energy challenges. That means that the EU should favour milk production on sustainable family farms and therefore better distribute the quotas between producers. - where should milk be produced in Europe? The EU should stop to concentrate the production in some areas close to the ports where soya is imported, neglecting the other areas with agro-climatic dairy vocation. The EU then should change the unfair distribution of the quotas between Member States as it is today, to the detriment in particular of Central and Southern Europe. While asking the Group to make proposals only in June 2010, the Council did not measure the extent of the crisis nor thus the urgency to modify the dairy policy. We ask the Group to meet more often and to make proposals in February 2010. Contractual relations between milk producers and dairies to better balance supply and demand on the dairy market: The EU would make a serious error by replacing the public regulation of production by private contracts between producers and dairies. These contracts will not manage the European supply of milk production. In a contract between the producer and a dairy, the latter is generally in a strong position and the contracts will be more favourable to large producers than to small and medium size producers. Such contracts will be a regression of the producers’ rights, as we can see in Switzerland, where contracts already exist. Contracts would be only possible if there is a public regulation of the production and collective bargains on milk prices, including the farmer’s organizations. What can be done to strengthen the bargaining power of milk producers ? If there is a European political framework, the producers are not alone facing the dairy industry. If there is no suppression of the structural overproduction, as it is the case since 1984 with a too high quota, it is difficult for the producers to negotiate. Now the EU decided to increase this quota and wants to remove the regulation of the production. Within such a framework there will be never good conditions of negotiations between producers and dairies. Thus before discussing how the participation of the producers could be reinforced, it is necessary to guarantee a public policy regulating production and framing prices. The fruit & vegetable sector demonstrates that the producer’s groups exist more for getting EU subsidies than for strengthen their bargaining power. Transparency for the benefit of milk producers , dairy industry and consumers: The EU cannot any longer let milk price drop for producers and increase for consumers. We ask for a transparency of prices along the milk chain, from production to consumption. We ask for a limitation of the margins of industry and for retailing sector, according to their real costs. The prohibition of selling at loss should not be limited to the retailing sector and extended to the production (since 1992, the CAP generalized considerably the sales at loss at production level): a healthy agricultural economics cannot be based on selling at loss: now the difference today between the production costs and the prices of milk is very large.

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