Brussels, 27/05/2016 (Agence Europe) - The European Parliament's agriculture committee held a hearing of experts on Wednesday evening 25 May on the situation on the milk market. This meeting concluded that current measures were insufficient to resolve the crisis (see EUROPE 11559) but few new ideas were brought forward to alleviate the situation.
Committee chair Czeslaw Siekierski (EPP, Poland) spoke of the trying situation in which EU milk producers find themselves.
Hans Hoogeveen, Dutch Deputy Agriculture Minister representing the Dutch Presidency, conceded that the situation on the European milk market was still “very difficult”. He argued that the crisis was due to an imbalance between supply and demand. Thus, he said, adjustment on the supply side had to be made easier but “I'm not asking for a change of direction of the common agricultural policy or a return, in one form or another, to milk quotas”. Time will tell if the two aid packages that have been adopted (in September 2015 and March 2016) will be enough, he said. He confirmed that the Agriculture Council of 27 June would discuss whether new measures were needed to address the crisis, not only in milk sector but in the pig meat and fruit and vegetables sectors. The minister made a call for more structural measures, in particular to strengthen the power of farmers in the food supply chain.
Jooste Korte, Deputy Director General at the Commission's DG Agriculture, again set put the causes of the crisis: falling prices worldwide, the impact of the Russian embargo and the ending of quotas. The situation is not good, he acknowledged: the average price is somewhere around 28 cents (11% lower than last year's already poor prices). He noted some more encouraging signs: demand seems to be picking up and exports are higher than last year (though prices are lower). The safety net cannot be opened wider (intervention ceilings have been reached). Turning to budgetary matters, he highlighted that the fact that only 56% of September's €420 million aid package had been spend by the member states did not make the Commission's task easier in trying to find additional funding. He encouraged countries and producers to make use of the Article 222 of the common organisation of the market measure (voluntary reduction in milk production), stressing that the Commission could do no more given the tools at its disposal.
Mansel Raymond from Copa (Committee of Professional Agricultural Associations in the EU) expressed concern that no improvement in the situation was forecast before 2020. He called for: - a common rules to tackle fraud and unfair practices; - measures that would give farmers a larger share of the final price paid by consumers; - fresh funds so that the Article 222 measure can work properly (currently, professional organisations do not feel the scheme offers a big enough incentive).
Tommaso Mario Abrate from Cogeca (General Confederation of Agricultural Cooperatives in the EU) said that he did not want to go back to milk quotas which have been abolished since April 2015 but he pointed out that the system had worked well for 25 years. He, too, advocated a temporary reduction in production.
Romuald Schaber, President of the European Milk Board (EMB), suggested an adjustment in production. He felt the situation was dramatic in Germany (with prices between 18 and 28 cents) and especially in some of the Baltic States (10 cents!). Losses for Europe's farmers amount to almost €30 billion, according to EMB figures. “Compulsory measures to reduce production will have to be brought in if voluntary measures are not effective”, he said. He called for the superlevy money (fines paid for exceeding milk quotas) to be paid back to farmers.
Michel Nalet, President of the European Dairy Association (EDA), said that, in 2014, prices were high and there had been no European meetings to speak about the sector. He pointed out that quotas had not prevented the crisis in 2009. He acknowledged that, within the EDA, there was no clear understanding of Article 222 but suggested that it would perhaps be better to wait a little before putting this measure to reduce production in place. Nalet warned of the potential negative impact of a trade agreement with New Zealand, “our main competitor”.
Isabel Vilalba for Via Campesina suggested, like many other representatives of the agricultural sector, a “general, compulsory” reduction in milk production. She noted, too, that the safety net had not had the hoped-for effects.
Parliament agriculture committee reiterates its usual demands. Albert Dess (EPP, Germany) called for a system that would make it possible to withdraw quantities of milk rapidly before a crisis develops. Paolo De Castro (S&D, Italy) regretted the ineffectiveness of the September package and called for EU supply management instruments. He called on the Commission to open “a legislative initiative on milk”. “We cannot continue to over-produce”, started James Nicholson (ECR, UK). Jan Huitema (ALDE, Netherlands) asked why the Article 222 measure was not attracting farmers, other than, it would seem, in Portugal. Martin Häusling (Greens/EFA, Germany) noted that, a few years ago, Copa-Cogeca had called for everything to be liberalised. He castigated the Commission for not providing effective measures. He argued that intervention was needed to reduce quantities. Europe is engaging in dumping on the global market, that is why exports have risen, he said. (Original version in French by Lionel Changeur)