Brussels, 19/06/2012 (Agence Europe) - On Monday 18 June, Poland and Lithuania, supported by several other countries (Spain, Latvia, Bulgaria and Portugal), called on the European Commission to introduce market measures as a response to low milk and milk product prices. Poland and Lithuania also called for the reference and intervention prices for butter and skimmed milk powder to be revised upwards. The Commission said that it was following the situation very closely and was prepared to intervene if necessary.
Over the past few months, the trend has been the opposite and milk prices have been going down. That said, the most recent EU average price for milk paid at the farm still stood at 32 cents per kilogram in April, which is significantly higher than the level observed in 2009 during the milk crisis, explained the staff of Commissioner Dacian Ciolos. The commissioner admits that the situation involving butter is more complicated. Exports fell by 29% during the first few months of 2012. This imbalance on the butter market followed a countervailing trend where there was more of a shortage of butter than a surplus. This fall enabled butter to regain some competitiveness on the world market and generated hope that exports could begin again without refunds, explained the Commission.
There are three safety net instruments: - public intervention (operators can supply butter and skimmed milk powder to public stocks); - private storage (producers can obtain aid for the private storage of butter); - export refunds (producers can also bid every month to obtain export refunds for butter and milk powder). Operators have until now chosen not to use private storage for butter. Nonetheless, the quantities stored in the first week of June have begun to diminish in comparison with the week beforehand. The Commission considers that conditions for reactivating export refunds are not in place.
With regard to the request for revising reference and intervention prices upwards for butter and skimmed milk powder, the commissioner explained: “We do not consider intervention instruments as an outlet that is equal to the market.” Pricing problems are probably due to poor production structures. There are too many small producers with weak individual negotiating power. In order to improve the situation and obtain a fairer share in the food chain, better co-operation between producers is necessary, the Commission says. The milk package addresses this problem but it is up to the EU countries and producers to make the appropriate approaches if they are to benefit from new instruments available to them. (LC/transl.fl)