Brussels, 21/06/2010 (Agence Europe) - The EU High-level Expert Group on Milk (HLG), set up in October 2009 to study lessons to be learnt from the crisis that hit dairy farmers in 2009, has completed its work and published a report (on 15 June 2010) setting out seven recommendations that the European Commission will now study before unveiling new legislative proposals before the end of the year.
The HLG's recommendations to the Commission cover the following:
Contractual relations between dairy farmers and dairy supply chain. The High-Level Expert Group on Milk “considers that there is a need to increase awareness and reinforce the responsibility of the operators in the dairy chain to better take into account the signals of the market and adapt supply to demand. Therefore the HLG invites the Commission to consider the most appropriate manner, whether by guidelines or a legislative proposal, to enhance on a voluntary basis the use of formal written contracts, made in advance, to cover deliveries of raw milk, contracts which should include the following four key aspects: (1) the price payable/ price formula at delivery,( 2) the volume which could and/or must be delivered, (3) the timing of deliveries during the season, and( 4) the duration of the contract (which could be indefinite with a termination clause). Member states could make the use of these contracts compulsory. All the specific aspects of the contract should be freely negotiated between the parties. The special nature of cooperative should be duly taken into account.”
Farmers' bargaining power. “The HLG, while noting the divergent views of a minority of five delegations, invites the Commission to consider a legislative proposal for a provision under agricultural law to allow producer organisations constituted by dairy farmers to negotiate contract terms, including price, jointly for some or all of its members' production with a dairy...and to consider whether such a revision should be permanent or of a sufficiently long but temporary duration, and in either case be subject to review.”
The role of interprofessional/interbranch organisations in the dairy industry. “The HLG suggests that the Commission examine further whether any of the current provisions for interprofessional organisations in the fruit and vegetables sector could also be applicable in the dairy sector. If so, the applicable legal restrictions on anti-competitive activities and the Commission's power to control them, should equally apply, and the proper functioning of the internal market should be safeguarded.”
Transparency in the dairy supply chain. “The HLG invites the Commission to elaborate further on the European Food Price Monitoring Tool, making better use of existing information. The HLG further invites EUROSTAT and the National Statistical Institutes to look for the possibility to communicate more information, subject to a reasonable cost, for example on volumes of milk and milk products.”
Market measures and futures. “The HLG generally regards the existing safety net as appropriate. Nonetheless, the HLG invites the Commission to explore new WTO green box-compatible instruments in the framework of the CAP after 2013, in order to reduce income volatility. It invites the Commission to consider facilitating the use of futures markets as a useful complementary tool, in particularly via targeted training programmes. Supervision and regulation should be dealt with in the framework of the overall approach on derivatives and of the Directive for markets in financial instruments (MiFID).”
Trading standards and origin labelling. “The HLG has taken note of the ongoing activities regarding labelling and invites the Commission to follow developments closely to ensure that imitation dairy products are distinguished properly, thereby avoiding the use of names and terms reserved to dairy products. On place of farming, the HLG invites the Commission to consider the feasibility of different options for obligatory/voluntary place of farming labelling of basic primary dairy products.”
Innovation and research. “The HLG underlines the importance of innovation and research for the competitiveness of the dairy sector. The HLG therefore invites the Commission to propose a reinforcement of innovation in the CAP after 2013, in particular in Rural Development Policy. The HLG further invites the Commission to improve the communication of the current possibilities for innovation and research within the existing framework for rural development and research framework programmes.” “As regards research, the HLG calls upon stakeholders to define clear research priorities for the dairy sector in order to allow the sector to better benefit from national research programmes as well as the EU research framework programme. The dairy sector is invited to intensify its participation in the ongoing developments in the HLG on competitiveness of the food chain, which also addresses the issue of innovation and research.”
The full 50 page report (along with annexes) can be found at http: //ec.europa.eu/agriculture/markets/milk/hlg/index_en.htm.
The committee of EU professional farm organisations (COPA) and the general confederation of EU farm cooperatives (COGECA) invite the European Commission to rapidly come up with practical proposals. COPA-COGECA secretary general Pekka Pesonen said the HLG report “answers some of the demands put forward by COPA-COGECA to the HLG, especially maintenance of current measures to manage the market. Now the Commission must act quickly and make sure these recommendations are turned into concrete proposals so that dairy farmers can be secured a future and employment can be maintained in the rural areas of the EU.' COPA-COGECA explains: “The HLG was also set up by the EU Commission to look at solutions to solve the crisis which badly affected so many dairy farmers last year, with a loss of 14 billion euros in turnover reported. It was also established to help producers adapt to the expiry of EU milk quotas in 2015.”
The HLG report unfortunately does not provide any new solutions to the structural crisis hitting small farmers in many EU countries, explains a press release from the Greens/EFA Group at the European Parliament, pointing out that despite a very slight rise in the consumer price of milk, the price farmers receive for their milk is still well below production costs and therefore ever more dairy farmers are being made bankrupt. José Bové (Greens/EFA, France) said the EU must take urgent measures to introduce genuine market management measures to match supply and demand and ensure farmers receive a guaranteed income. Only EU-level management of dairy farming can provide viable solutions, he argued.
The small farm action group “Coordination européenne Via Campesina” believes that the HLG recommendations do not provide farmers with any future prospects and without public regulation of the milk and dairy chain, there will never be a sustainable solution to the crisis hitting farmers due to the low prices they receive for milk. The organisation argues that the HLG recommendations do not tackle the causes of the crisis in the dairy industry (regulating production, types of farming, farm structures, preventing export dumping and the allocation of dairy farming in the EU). “Coordination européenne Via Campesina” says it would be a grave mistake to replace public regulation of dairy farming by private contracts between farmers and dairies, and it opposes the idea of introducing futures markets (speculation) for milk because this would only favour the dairy and finance industries and do nothing for farmers.
The European Milk Board (EMB) that organised a raft of protests of small dairy farmers last year says that the HLG report does not make any suggestions that might solve the disastrous situation on the dairy market. EMB says that the only positive part of the HLG report was the section on improving labelling of dairy products and the consolidation of the legal basis for producer organisations to boost their negotiating powers with dairies. (L.C./transl.fl)