Brussels, 13/07/2010 (Agence Europe) - As Belgium picks up the baton on the dairy sector crisis, Copa-Cogeca has called for long-term measures to reduce extreme market volatility. The move came at the EU Commission Milk Advisory Group meeting at which the future of the dairy sector in Europe was discussed. The Copa-Cogeca opinion relates to the first legislative package of measures which the Commission hopes to bring forward by December of this year. The package can be divided into three areas: producers' negotiating power, contractual relations and the role of joint-trade organisations.
On the first area, and reacting to the recommendations made by the High Level Group on Milk, Henri Brichart, chairman of the Copa-Cogeca milk working party, emphasised, in a press release, the need to maintain existing measures to manage the market, particularly storage and promotion of dairy products. He said EU safety nets “play a crucial role” in EU dairy policy and must be the baseline for future policy. “EU buyers need to pay market prices for EU intervention products which contribute to a sustained increase in milk prices for farmers. The current market situation fully justifies further milk prices increases in the coming months, to enable farmers to pay a few of their many outstanding bills,” he argued. The rise in demand only slowly filters down to the prices paid to producers.
On the second area, Copa-Cogeca says the High Level Group “was right” to take the issue of contracts seriously. Mansel Raymond, deputy chairman of the working party, said that “serious attention must also be given to the way milk is priced in the long term as dairy producers have not got a fair return in the past months compared to the price consumers pay for their produce. Immediate and substantial increases in farm-gate prices are urgently needed. We consequently call for greater transparency in margins, profits and pricing arrangements throughout the supply chain”. For example, the organisation stresses the need to clarify the review clauses and to resist retrospective price setting, so that a more balanced partnership between producers and business.
Finally, on the role of joint-trade organisations, Copa-Cogeca says that the High Level Group confirmed the important role of dairy cooperatives in view of their specific role in the production chain. Tommaso Mario Abrate, also deputy chairman of the working party, said that “the specific nature of farmers' cooperatives must be taken into account when it comes to strengthening contractual relations and milk producers bargaining power in the food chain”. He went on: “I believe that the long-term sustainability of EU milk production will be better achieved through farmer-owned cooperatives”.
Copa-Cogeca urges the European Commission to act on these recommendations. (J.I./transl.rt)