Has the crisis in the dairy industry been resolved? Readers of this column will probably have spotted recent news items about spectacular hikes in the price of butter and skimmed milk powder. This didn't happen overnight but has been building up over the past two months. The price of skimmed milk powder has risen 60% since February 2009 and butter prices have doubled and are close to the record highs of January 2008. Demand has increased due to global demand rising in places like India in particular (where demand is described as “enormous” due to drought and the late monsoon), China (where some of the people responsible for the melamine-contaminated milk scandal have been executed), Mexico, North Africa and the Middle East. I am not aware of any official expressions of relief and optimism by European dairy farmers and one can only hope that large-scale dairy product purchasers and big supermarket chains are allowing them to benefit from the current rising prices.
Farming is different. The importance of the rising prices extends far beyond dairy farmers because it confirms the special nature of farming in general and the fact that it is a nonsense to try and apply the rules governing other types of industry to food production. Take the example of the car industry. It is possible to slow down the production line or put it on hold for a few weeks in times of low demand. Cars that are not selling very well can be altered or dropped, and it is possible to plan ahead for holidays. Far-reaching negotiations are possible between the car manufacturers and the workers in the car plants. Things are just not like that when it comes to cows - there is no alternative to feeding and milking them every day, short of slaughtering them. If farming is ever stopped, it is stopped for good. It cannot be stopped and started at a whim. Farmers leaving farms means the land gets gobbled up by housing developpers, leading to the end of a way of life and sometimes an entire civilisation. If there is widescale abandonning of several types of farming, then an entire country can lose its ability to grow food and will have to rely on food imports, which also removes its ability to help fight famine in the world.
The recent dairy crisis in the EU has not had such a disastrous impact because it was restricted to the dairy industry and because of the existence of the common agricultural policy (CAP), but it is significant nevertheless. Without the CAP mechanisms and a handful of special measures for the dairy industry introduced by the EU institutions, some dairy farmers would have been forced out of business and the EU would have lost some of its farming capacity. Certain aspects of the industry needed to be sorted out, of course, and we can learn from crises as long as we solve them without forcing farmers off the land. We can learn lessons and correct problem areas, create direct trading links between farmers and consumers, and impose restrictions on the way the milk processing industry and big supermarket chains operate. I believe that the recent dairy crisis reinforces the general arguments I have been making for a while (most recently in issues 9997, 9998 and 9999) about the importance of farming in Europe and in the world at large.
Extremes to be ironed out and gaps to be filled. Work is continuing apace to fill gaps and iron out some of the extremes of farming in the EU, which still generates too much greenhouse gas through the abuse and over-use of chemical fertilisers, pesticides and fuel for farm machinery. Trying to produce as much food as possible using artificial means is gas-guzzling and poisons the earth by contaminating it with chemicals. Other farming methods that might seem less efficient at first sight actually safeguard the planet, enrich the earth and do not pollute the air we breathe. As the European Parliament recently pointed out, if farmers cannot get a fair price, they stop farming, and what alternative do they have? Farewell to any prospect of making famine history!
Two-pronged approach. The upcoming negotiations on the future of the CAP will be decisive. The farm ministers who backed the EU's dairy farmers are said to be building on their veto minority at the Council of Ministers with the aim of forming a “qualified majority”. There are suggestions that they may meet in the run-up to Christmas to consolidate this pro-farming alliance and are likely to succeed because there are reports that the pro-farming lobby includes 21 of the 27 member states.
The second way of saving farming is not in EU farm ministers' hands because it means banning speculation on farm commodities. There has been an influx of derivatives and other forms of financial speculation on the food market since 2006, particularly in New York, and this has had a truly disastrous impact on world farming. Experts say that banning derivatives and futures speculation from farming would in itself have a radical impact and slash the numbers of people starving in the world. This is not in the hands of farm ministers - it is finance ministers who hold the reins here. Will they take action, I wonder?
(F.R./transl.fl)