Brussels, 06/12/2011 (Agence Europe) - Agreement was reached between the institutions meeting in trialogue on Tuesday 6 December on the issue of written contracts in the milk and dairy products sector. The agreement must now be formally approved by the European Parliament (EP) and the Council of Ministers of the EU.
The key aim of the proposed regulation is to boost dairy farmers' bargaining power, ensure fairer prices for the raw milk they produce and thus help them to prepare for the end of milk quotas in 2015.
The regulation allows member states: - to make written contracts between farmers and processors compulsory; - to oblige purchasers of milk to offer farmers a minimum contract duration. These contracts should be made in advance of delivery and contain specific elements such as the price, volume, duration, details concerning payment, collection and rules for acts of God. All these elements should be freely negotiated between the parties and farmers may refuse an offer of a minimum duration in a contract. Deliveries by a farmer-member to its cooperative are exempted from this contract obligation if the statutes or rules of the co-op contain provisions that have similar effects as the prescribed contract.
In order to strengthen the bargaining power of milk producers, farmers can join together in producer organisations (POs) that can negotiate collectively the contracts terms. The volume of milk that a PO can negotiate is limited to 3.5% of the EU production and to 33% of the national production of the member states involved (this percentage is increased to 45% for member states with production of less than 500,000 tonnes, that is, Malta, Cyprus and Luxembourg).
To improve the operation of the market for cheeses registered under a protected designation of origin (PDO) or protected geographical indication (PGI) and to improve their quality, MEPs inserted a provision for a supply management system, which member states may establish, provided that it in no way harms competition on the single market or leads to small cheese producers being adversely affected. To ensure that it represents the wishes of enough dairy farmers, any proposal for a supply management system must be backed by at least two thirds of those delivering at least two thirds of the milk destined for the production of such quality cheeses.
To ensure that dairy farmers in less-favoured areas also benefit from the new arrangements, MEPs asked the Commission to produce two reports assessing their situation, one by July 2014 and the other by the end of 2018. The EP plenary session vote is scheduled for February 2012.
Agriculture Commissioner Dacian Ciolos welcomed the agreement: “It will prepare the milk sector for the new economic context and reinforce the position of the dairy producers in the supply chain. Producers' organisations will have all the necessary tools to better promote their work in the food chain”. (LC/transl.rt)