Brussels, 26/03/2010 (Agence Europe) - Dacian Cioloº, European Agriculture Commissioner, who took part at a large scale conference on the future of the dairy sector and milk products in Brussels on Friday 26 March, called for a move to be made towards a reasoned market. He supported bringing production quotas to an end in 2015 and keeping “effective and reactive” safety nets.
The European agriculture commissioner said he was ready to envisage Commission initiatives for the dairy sector without waiting for the major negotiating meeting for the CAP (common agricultural policy) in post-2013. He made the point that last year's dairy crisis had resulted in the use of most of the tools available for intervention (intervention purchases of butter and skimmed milk powder, extended butter private storage, export refunds, advance payment of direct aid and an exceptional allocation of €300 million). All such measures have allowed the situation to be stabilised and for things to be improved little by little, Cioloº said. Since December, there have been more usual price fluctuations. A slight fall has been recorded. The commissioner also stressed that “the relevance of direct aid has been demonstrated”. This does not mean that direct aid should “stay forever what it is today” but, Cioloº said, he really believes that it does have a “very real future”.
Market orientation must be “reasoned”. The commissioner said that this market-oriented trend “must be accompanied by a form of renewed framework and renewed relations between the different players in the sector”. The increased exposure of farms to price volatility must be brought under control. To achieve this, Cioloº said, it is necessary to safeguard effective market tools. It is no doubt necessary to adjust certain existing tools and perhaps create new tools. Above all, it is necessary to “enhance solidarity between producers”. This points to a heightened role being granted to producer organisations.
Today, the power of collective producer negotiation is limited by competition rules. This is a tricky subject and Dacian Cioloº plans to work with his colleague for competition policy to “find adequate solutions without bringing into question the rules that guarantee the market works as it should”. They must look at how producers' negotiation capacity can be increased to place producers in a position where they can hold discussions on an equal footing with their industrial and commercial partners. Should derogations be granted to producers with regard to competition rules? And should these be temporary or lasting derogations? Should one allow producers to group together in broader organisations than what is generally admitted at the scale of their market? What is the market perimeter that should be taken into account with regards to competition? In response to these questions, the commissioner said: “I have heard all these options. These questions remain unanswered. We must take reflection forward”. He also recommended strengthening the soundness and the transparency of the milk sector, working on the subject of relations between producers and the other stakeholders in the sector, processors and retailers. This no doubt requires closer relations between partners within inter-professions or through clarified contractual relations. Should measures applied to the fruit and vegetable sector be applied to the dairy sector? Should the scope of inter-professions be extended to cover the dairy sector? These questions must be answered, the commissioner said. “While respecting the rules of competition and the need for confidentiality of certain information, it must be possible to improve the way the dairy food chain works”, Cioloº concluded.
In response to questions on EU export policy, Jean-Luc Demarty, Director General at the Commission's DG Agriculture, said that the EU restored export aid between January 2009 and October 2009 at the height of the crisis, “by upholding our international commitments and our regulations” (no export subsidies beyond the difference between domestic price and world price).
Martin Van Driel from DG Agriculture specified that, for the very first time, Italy will not exceed its dairy quota this year, thanks to a fall in production in that country and a 5% rise in its quota gained during the CAP “healthcheck”. (L.C./transl.jl)