Brussels, 11/07/2012 (Agence Europe) - Farmers, complete with their tractors and mock cattle, demonstrated outside the European Parliament in Brussels on Tuesday 10 July against the fall in the price of milk caused by overproduction in Europe.
“Overproduction on the European milk markets is leading to a dramatic fall in milk prices, and is likely to directly precipitate the next milk crisis”, says the European Milk Board (EMB), the umbrella organisation of dairy farmers' associations in Europe.
Milk is overflowing and prices plummeting
The EMB organised the demonstration “to voice a determined protest against the mismanagement of the European dairy market”. To symbolise the current overproduction that is affecting European milk markets, demonstrators set up a 5,000-litre overflowing “milk lake” outside the European Parliament building. “The excess supply on the market is pushing milk prices to dangerously low levels, threatening the farmers' livelihoods”, the EMB argues.
With supply outstripping demand, farm-gate milk prices are in the region of 25 cents per litre, even though the production cost is almost 40 cents. For some farmers, the prospects are looking more bleak even than in the previous dairy crisis in 2009, which brought sometimes massive demonstrations. The EMB says that the cost of a programme to maintain milk prices above 30 cents per kilo would be relatively limited: “Only €450 million would be needed to reduce production in the EU by 2%”.
As part of the current reform of the common organisation of agricultural markets, dairy farmers in the EMB are calling for concrete measures, such as a voluntary reduction in production and setting up a European monitoring agency in order to rebalance supply and demand on milk markets.
“Members of the European Parliament have to be careful in the light of the CAP reform, and take the steps that are right for the milk market. Otherwise, the European Commission's 'soft landing' leads us to another crash landing in only three years. Virtually the only way to alleviate the situation is to reduce production, preferably by a voluntary supply constraint in the short term. The positive initial steps laid down in the European parliamentary committee's report on agricultural market regulations must be worked on and developed over the coming weeks and months, in collaboration with the politicians - which also means that constructive decisions will have to be taken”, said EMB President Romuald Schaber. The Commission is proposing to end milk production quotas by 2015.
The EMB currently represents 19 organisations from 14 European countries, with a total of 100,000 dairy producers. Approximately 75% of the milk in Europe is produced in EMB member countries.
COPA-COGECA appoints new chairman of its Dairy Working Party. COPA-COGECA elected Mansel Raymond from the UK as the new chairman of its Working Party on Milk and Dairy Products on Tuesday 10 July. He will look at ways to improve the difficult market situation and deal with major challenges, such as the extreme market volatility and rising production costs, and ensure that there is a competitive dairy sector under the future common agricultural policy (CAP). Raymond is currently chairman of the National Farmers' Union (NFU) Dairy Board. He said: “Milk producers help to ensure food security and maintain employment in rural areas, but they are facing a difficult market situation, with reductions in milk prices which are not always driven by consumption changes. In view of the high production costs, which in some countries exceed the price producers receive for their milk, further price drops are driving the sector to a similar situation to that seen in 2009, but for a different reason. Milk producers have not even been able to recover financially from the crisis that took place in 2009. The recent cuts in milk farm-gate prices as seen in the UK, Poland, Lithuania, Slovakia and several other countries are unacceptable and cannot be justified. Milk producers consequently oppose any more cuts in milk prices and call for urgent price increases in order to ensure security of supply”.
COPA-COGECA Secretary General Pekka Pesonen called for CAP reform “which will not cause a production cost increase by putting pressure on EU feed production”.
He also wants the EU intervention price for butter and skimmed milk powder to be updated to take account of the higher production costs farmers face. Private storage should also remain compulsory, not voluntary, he argues. (LC/transl.rt)