Brussels, 10/06/2015 (Agence Europe) - The EU must bring more balance into the supply chain, introduce better tools against market disturbances and help farmers find new outlets for their produce, says the agriculture committee in a draft non-binding resolution on the milk and dairy products sector adopted in Strasbourg on Monday 8 June.
“The end of quotas has been part of a longer-term shift towards a more market-oriented policy. The sector has had to face up to new challenges - globally, there remains little appetite for our exports in China at the moment, and there is no end to the Russian embargo (on EU agricultural products) in sight”, said rapporteur James Nicholson (ECR, UK). He added that the greatest single challenge facing our dairy farmers is price volatility. His report will be put to the vote in plenary session in July.
Volatile markets. The high degree of price volatility and recurring crises makes major investments in livestock and the installation of new producers very difficult. MEPs feel that the Commission's capacity to respond rapidly and effectively to market crisis seems to be limited. Existing “safety net” measures such as public intervention and private storage aid alone are neither sufficient enough nor up-to-date to address current challenges in the milk sector, they say. The committee therefore urges the Commission to use new targeted market measures to address the crisis resulting from downwards price pressure, a dip in global demand, price volatility and impacts of Russian embargo on EU food products. The EU should develop more responsive and realistic crisis instruments and possibly use risk management instruments to take advantage of the volatility in the sector to increase its competitiveness, says the text adopted. The dairy sector should also get engaged in developing further insurance tools when the market is strong in order to curb milk price volatility and ensure proper income for dairy farmers, the MEPs say.
Addressing unfair practices. Agriculture MEPs also demand mechanisms that would effectively protect farmers from abuses in the retail market and call on the Commission to come up with a proposal to do away with unfair trading practices as soon as possible.
Better market monitoring. To tackle imbalances and crises, the Commission must monitor more closely the functioning of the milk market and come up with ideas to better mitigate related risks, MEPs say. They welcome the establishment of the milk market observatory (MMO) but urge the Commission to ensure that the MMO will be able to produce accurate data in real time, send earlier and more frequent crisis warnings, and recommend necessary action. MEPs also urge the Commission to closely monitor the evolution of dairy production and to assess the economic impact of the end of quotas on dairy farms.
Milk package. MEPs say that the results so far of implementation by member states of the milk package (negotiated in 2012) are “disappointingly low”. They call for: - stronger rules on recognition of producer organisations (POs) to increase the influence of milk farmers in the negotiation of contracts; - better explanation to farmers of the advantages of POs in tackling imbalances in the supply chain; - additional incentives to be provided to encourage farmers to join POs or set up new ones; - the extension of compulsory contracts on milk delivery to the entire sector and to all EU member states. The Commission should also come up with an in-depth study on ways to ensure an optimal use of tools made available to the member states, say MEPs.
Disadvantaged regions. Milk production must be maintained all across the EU, including in disadvantaged, mountainous, insular and outermost regions, the committee insists. To this end, MEPs want to adapt the support for setting up and functioning of POs to realities on the ground and call for more funds and a transition mechanism to help farmers in outermost regions adapt to the new post-quotas reality.
New markets. The global dairy demand is predicted to grow by 2% per annum. The EU dairy policy after the abolition of milk quotas must, therefore, include means of making the most of expansion opportunities. The MMO should provide closer insight in development of international markets in order to identify any trends and seize export opportunities. Furthermore, the Commission should become more closely engaged in opening new markets for EU milk farmers in third countries and removing trade barriers, the MEPs say. They also call on the Commission to protect EU geographical indications when negotiating bilateral trade deals. (Lionel Changeur)