Brussels, 10/11/2009 (Agence Europe) - A high-level group of EU experts set up by the European Commission to look into the future of the dairy industry met on Tuesday 10 November 2009 to examine three issues - contracts between dairy farmers and industry (to ensure a better balance between supply and demand); farmers' organisation; and transparency in the food chain. EU agriculture organisations attended the meeting and expressed their views. The high-level group on the future of the dairy industry will publish a report by July 2010 at the latest.
Padraig Walshe, the president of COPA (Committee of EU Professional Agricultural Organisation), said at a press conference that aid mechanisms would need to continue into the future to ensure that prices for milk never again return to the low levels witnessed over the past twelve months. In the future, policy should deal with the whole of the supply chain, he said, because profits in the supermarkets and distribution chain will shoot up this year, whilst profits at farm-level are non-existent.
Henri Brichart, chair of the COPA and COGECA (General Confederation of Agricultural Cooperatives in the EU) Milk and Dairy Products Working Group, stressed the importance of seeing the three issues as a whole because it is pointless to want to extend contracts if one is not able to boost the organization of farmers and increase transparency in the food chain. Making progress on all three issues at once will not solve all the problems though and COPA-COGECA argues that Europe should continue to manage the market by introducing genuine safety-nets, explained Brichart.
On the question of getting farmers organised, COPA-COGECA calls for recognition at EU level of the role of farmers' organisations, cooperative and inter-professional bodies (for which there would need to be changes in EU competition law because inter-professional bodies would need to play a social role as well as a purely commercial role). Such organisations should be recognised in the rules governing the CMO (common organisation of the market) for milk, as is the case for the CMO for fruit and vegetables; the introduction of an EU legal setting for collective bargaining in farm products where possible. Such talks could cover both quantity and pricing.
On contracts, Henri Brichart explained that contracts between farmers and the dairy industry could generate greater price stability, which would enable farmers and buyers alike to predict the amount of milk produced and its price. He pointed out the need to take account of the specific conditions facing dairy cooperatives, whose terms and conditions act as a de facto contract. Hence COPA-COGECA's call for a voluntary approach to contracts with EU rules along the lines of the current system for hops. Henri Brichart added that greater equivalence would be required between the various types of contract in the Member States, which could take the form of good EU practices for contracts with common EU specifications for milk quality and the system to determine milk prices.
On transparency, COPA and COGECA recommend a code of conduct to give dairy farmers greater weight in the food chain; labelling the origin of products and providing honest information to customers about imitation dairy products; and the creation (as recommended by the European Parliament) of an EU monitoring centre on profit margins and prices in the dairy industry.
'Coordination Européenne Via Campesina' (campaigning for fairer farming) believes the EU is making a 'grave mistake' in replacing public regulation of production with private contracts between dairy farmers and dairies. In a press release, the organisation argues that contracts are more beneficial to large farms to the detriment of small and medium-sized farms. It adds that before talking about farmers' negotiating powers, a public policy to guarantee production and control prices is required. The organisation agrees that price transparency along the entire food chain is required, from the dairy farm to the consumer and calls for restrictions to be placed on the profit margins made by supermarket and dairies, which should be related to the actual cost of producing the milk. Banning the sale of milk at less than cost price (loss leaders) should be extended to farmers. Coordination Européenne Via Campesina calls for an improved milk quota system, commenting that COPA-COGECA had 'noted' that politicians had already decided to scrap dairy quotas in 2015. COPA-COGECA says that the quota-free world should be prepared for even though opinion is divided in the organisations represented at COPA-COGECA about the Council of Ministers' decision to scrap quotas. (L.C. trans fl)