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EU agreement on dairy reform : The EU is heading straight for disaster

8 December 2011

The problems having led to the crisis in 2009 are not solved.The agreement on December 6th will fail to provide the EU with a dairy policy allowing European producers to get fair prices.

EU agreement on dairy reform: The problems having led to the crisis in 2009 are not solved. The EU is heading straight for disaster. The agreement of the trilogue Council-Parliament-Commission on December 6th will fail to provide the EU with a dairy policy allowing European producers to get fair prices, which pay the costs of production, including farmer’s work. The European Institutions did recognize the imbalance inside the dairy chain and the market power disparity between producers and industry. Nevertheless they did not decide any European governance which maintains dairy farms in whole Europe and the jobs and economic activity they produce around. Once more the EU leaves industry the power to impose its conditions. It is surprising to see producer’s organisations limited in their dimension, when big dairy companies like Lactalis or big cooperatives like Arla or Campina, multi-national, impose their prices and conditions in several Member States. A reform against producers Whereas thousands producers disappear in the EU, at the same time the production increases and concentrates in ever more industrialized farms, with often serious environmental problems for water and soil and with a worsening in quality. On the day of agreement, the Commission informed the Milk Advisory Group that more than 25.000 persons die each year in the EU because of bacteria resistant to antibiotics over used in intensive animal production and in human medicine. To persist in that industrialized model undermines producers and citizens. A contrac tualization which serves dairy industry Indeed it does not force the industry to take in account the costs of production in the price and to fairly remunerate producers. In other respects it is not acceptable to leave the cooperatives outside the contractualization, whereas they are processing the most part of milk in many Member States (more than 90% in Belgium) and impose the same aggressive conditions for producers than private industry (the lowest price in 2009 -0,12€/litre- was from a Belgian cooperative). By mixing up the interests of producers and cooperatives, the Copa-Cogeca does not defend producers. Without supply management, the producer’s market power will not be strengthened Without a supply management system which adapts supply to demand, the producers will face a high price volatility, which ruins the farms. It is not acceptable that the Commission does not have an updated study on the impact of the end of quotas in 2015. The fruits & vegetables reform, which the Commission likes to present as an example, shows that the development of producer’s organisations, unique beneficiaries of EU subsidies, did not strengthen producer’s market power facing industry and supermarkets. This sector, without regulation upstream of the problems, is facing recurrent crises: the production is shifted outside the EU and is disappearing from certain regions. We evaluate positively the relaxing of certain competition rules to negotiate milk price and ask for the recognition of the importance of milk as a basic food product, which cannot be abandoned to market volatility, nor be replaced by palm oil, harmful for health, in the agro-industry. We think that the supply management which is maintained for A.O.P and I.G.P should be extended to the whole dairy production in Europe. Transparency: The transparency for milk volumes is not the only one necessary. The transparency of prices and margins is also needed. Dumping is going on By maintaining large surpluses, the EU maintains the producers in a dangerous dependence with respect to the demand of international market, uncertain in times of global crises. The EU prefers to sacrifice thousands of dairy farms in Europe and to ruin the dairy production capacity in third countries, by exporting butter and milk powder surpluses, through export subsidies and direct payments. It is not bearable economically to sell and export at a loss: however that is what dairy producers do, forced to sell at prices below their production costs. The European Coordination Via Campesina asks the MEPs and the Agriculture Ministers not to ratify this agreement, and to work on a policy and instruments which guarantee fair and stable prices for dairy producers, and maintain a sustainable milk production which produces quality food in all European regions. Contacts : Isabel Vilalba : + 34 608905444 (ES-PT-EN) Gérard Durand +33 680723274 (FR) Xavier Delwarte : +32 (0) 476 42 39 02 (FR-EN) Gérard Choplin +32 (0) 473257378 (FR-EN-DE)

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