Brussels, 23/03/2009 (Agence Europe) - In Brussels on Monday 23 March, the European Agriculture Ministers debated the tricky situation faced by producers of milk and dairy products and split up into two camps. One group, led by Germany, is calling for the increase of 1% in milk quotas to be delayed and for market measures to continue. The other, made up of the "liberal" countries (Denmark, the Netherlands, Sweden and the United Kingdom), plus Spain, takes the view that Europe needs to be more competitive and have a greater presence on the global market and that, as regards restitutions, the wrong signals must not be sent out to their partners. Italy, the only country which is entitled to an increase of 5% of its quota in 2009, said: "we will not touch the quotas". Belgium suggested reactivating the regime of aid for the incorporation of powdered skimmed milk in animal feed (for calves).
Mariann Fischer Boel, the European Commission of Agriculture, told a press conference: there is "no question of going back on the agreement of the 'health check' of the Common agriculture policy (CAP). We need to put an end to this confusion and I hope that the ministers will have the courage to be as clear when they return to their own countries to speak to the farmers' organisations". At the CAP health check, the countries of the EU agreed, after a number of false starts, gradually to increase milk quotas by 1% a year from 2009, before finally removing them altogether in 2015.
Speaking before the ministers, Ms Fischer Boel explained: "While I am happy to discuss with you the management of support measures, I have to stress that I am not ready to discuss a complete re-orientation of EU dairy policy". The idea of suspending quota increases decided upon during the health check of the CAP "will not resolve the current problem", stressed Ms Fischer Boel. The Commission has said that it is "deeply concerned by the deterioration of the market" with a price of around 20 cents per litre. Having increased greatly initially, milk prices then dropped sharply with the economic crisis, losing 50% compared to autumn 2007. However, the Commission has said that it has done all it can with regard to restitutions and intervention. The two measures not yet in use (aid for skimmed milk powder for animal feed and aid for the marketing of casein) "will not be effective under the current circumstances", the Agriculture Minister added. The only small concession was that she said that she was prepared, as requested by a number of countries, to look into extending (to yoghurts, for example) the range of products eligible for the Community programme for the distribution of milk and dairy products in schools.
For the future, Ms Fischer Boel was reassuring. "Our pro-active management measures have stopped the downward spiral of prices" and average prices have stabilised at around the level of the intervention price. Lastly, the Commission has noted a slight drop in European milk production since the beginning of the current marketing campaign (European milk production should be 4 to 5% less than quotas in 2008/2009 and the same in 2009/2010, according to the services of Ms Fischer Boel). This shows that farmers understand that it is market prices, rather than quota levels, which must determine their production decisions. "Quotas are not an obligation to produce, but a possibility", said the Commissioner.
The measures already taken. Between 23 January and 19 March, export restitutions were granted for: (a) 50,000 tonnes of butter and butteroil, (b) 61,000 tonnes of powdered skimmed milk and (c) 60,000 tonnes of cheeses. Furthermore, since 1 May, public purchases (intervention) were made for: 1) butter (the upper limit of 30,000 was reached in three days, but the Commission agreed to continue the intervention by means of a system of tendering, and 6,665 tonnes of butter were accepted last week), 2) powdered skimmed milk (after two weeks, 50% of the upper limit of 109,000 tonnes had been used). Lastly, an advance regime of aid for the private storage of butter began in January. It is open until 15 April and 60,000 tonnes have already been stored.
Memorandum of 5 countries. Austria, Germany, Hungary, Slovenia and Slovakia tabled a memorandum on the situation on the market for milk and dairy products. These countries are calling for the publication of the Commission's report on the situation in this market to be brought forward to 2009 (as against 2010 and 2012) and to look into, if required, postponing the gradual increase in quotas (1% a year starting from 1 April 2009). They also recommended increasing the export restitutions brought back in at the end of January. The memorandum goes on to state that the Member States should also have the option to withdraw certain quantities of milk from the market on a temporary basis. France (where producers are divided over the increase in dairy quotas) believes that a "no holds barred" discussion is required at the two major dates in the milk quota diary, in 2010 and 2012. On developments in the market, an adjustment of the dairy quotas may be decided by the European ministers, France stated.
A number of countries, such as Portugal Belgium and France, called for greater transparency (on the prices paid to farmers by the distribution channels). Hungary and Slovakia, where the situation has been described as dramatic, are starting to talk of needing to slaughter dairy cattle or to use them as suckler cows instead. The Slovakian minister is said to have called for a time machine and recommended a guaranteed price for milk producers of … 40 cents per litre. (L.C./trans.fl)