The next steady steps for the dairy sector
September 22, 2009
(9 votes, average: 3 out of 5)
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Last Thursday (17 September), while speaking to the full European Parliament I announced proposals for the next steps to speed up the recovery of the EU dairy sector.
I say “steps” deliberately. These are not dramatic, blind leaps – because a huge amount of support is already on offer to help the sector through the current crisis, and because the action taken is bearing fruit.
Let me first repeat what’s already being done – because in some of the louder comments that come my way about the dairy sector, the silence on this point is deafening.
- In good times and bad, EU dairy farmers get valuable support from our system of direct payments. Worth about € 40 billion a year, this system includes € 5 billion paid out annually as compensation to dairy farmers for cuts to intervention prices, under the 2003 CAP reform. This year, 70 % of direct payments can be made as early as 16 October, instead of 1 December as usual.
- We’re really working our market instruments hard (public intervention, aid for private storage, export refunds) to help pull the market round. We expect to spend an extra € 600 million on these tools over 12 months to ease the crisis.
- Our rural development policy – now worth more than € 14 billion a year following the CAP Health Check and the Economic Recovery Package - offers a long list of measures which national governments can use to make the dairy sector more competitive and help it to restructure.
- We’re reinforcing the School Milk Scheme which Member States can use to distribute dairy products in schools.
- We’ve opened a new round for dairy product promotion programmes.
In view of all this, it defies belief that some people accuse the EU of “doing nothing” for the dairy sector. To say things like this is not just to be short-sighted: it’s to deliberately turn one’s back on facts which are staring everyone in the face.
And the market has started moving the right way. In one month, EU butter prices have risen by 10%. Prices for cheese and skimmed-milk powder are also moving upwards, as is the average EU milk price. And requests to sell products into temporary public storage for public money (through the intervention system) have practically come to a halt.
Of course, a burning issue in the debate is still the end of the milk quota system, scheduled for 2015. Some producers want to keep this system of centrally fixed production limits, but know that they can’t overturn the opposition of a large number of European producers and governments.
Let’s be clear: the quota system will go in 2015 because it is not the true friend that some people claim!
When the EU set it up in 1984, it was intended to be temporary. As it somehow escaped abolition year after year, it held back the dairy sector’s competitiveness. It kept an arm tied behind our backs so that New Zealand pushed us aside to become the leading global exporter of dairy products. It put up barriers to young farmers keen to enter the sector. And it didn’t prevent a loss of labour: since 1984, the first 10 countries to join the EU have lost 80 % of their dairy producers.
This is why EU heads of state and government confirmed the quota system’s future in June.
But I’m not saying that we’ve done enough. Further action is in the pipeline.
In the short term, on the basis of the Commission’s report of last July:
- we will allow Member States to offer farmers up to € 15 000 in state aid under the Temporary Crisis Framework;
- we will give the Commission new powers to take rapid temporary action against market disturbance in the dairy sector through a streamlined procedure; and
- we will temporarily change the rules on certain milk quota buy-up schemes to give them more influence on production and restructuring.
At the same time, we need to put on our thinking-caps and look at some longer-term issues. So I want to put together a group of experts to discuss:
- a possible legal framework for contractual relations between milk farmers and the dairy industry;
- the possible usefulness of an EU dairy futures market;
- ideas for cutting production costs and spreading innovation; and
- the “balance of power” in the dairy sector supply chain (this discussion is already underway and a Commission report due by the end of this year will be the next step).
None of this guarantees an easy future. The current economic crisis has brutally hammered a number of sectors, and future tremors in the global economy will always affect agriculture, whatever we do.
But the EU is already doing a great deal to steady and strengthen the dairy sector, and we’re now taking the next firm steps out of the crisis.
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September 22nd, 2009 at 5:58 pm
Mme Fischer Boel doit démissionner immédiatement
« Ca suffit, il est temps que Bruxelles prenne en compte la dimension exceptionnelle de la crise laitière qui frappe aujourd’hui les éleveurs européens et, plus particulièrement les éleveurs bretons » déclare Marc Le Fur, Député des Côtes d’Armor. « Cette crise est le constat de l’échec absolu de la politique européenne que mène Mariann Fischer Boel, Commissaire européenne à l’Agriculture, depuis 5 ans » poursuit le Vice-président de l’Assemblée nationale. « Nous sommes aujourd’hui dans l’urgence. Mme Fischer Boel doit démissionner immédiatement pour donner un signal positif aux éleveurs européens.
La suite : http://www.marclefur.com/article-36387456.html
October 5th, 2009 at 9:51 pm
dehors la sorciere!!!!!!!!!!
October 19th, 2009 at 10:08 pm
Dear Ms Fischer Boel
As I can understand, the actual milk crisis is due to
A - lower prices paid to the producer
B - less consumption
C - higher raw material prices
These are my thoughts on these issues:
- having in mind that there is a consumption decrease in the EU, it has some logic to think that prices will decrease too (that’s what we learned at school, the old “offer and demand law”…); then why on earth did milk got more expensive to the consumers, and only got cheaper on the producers?
- when we look at a modern dairy, we often take it to be a kind of “factory”; well, it’s a very wrong perception of the reality; the main “capital” of a dairy are living beings: cows! Every day(!) cows need to be fed and taken care of, and every day they produce milk, that has to be taken out, or they´ll get sick and eventually die. It’s a kind of unstoppable machine, that has to be taken care of 24h a day. This characteristic is the main source of problems to the producers: if raw materials get more expensive, and milk gets cheaper, how can they keep the machine working? This is why I support EU helps this sector. Helping these “machines” now gives them the possibility of surviving through these difficult times.
Now: I believe the Commission should take action in the milk commercialization chain. It’s intolerable that the distribution chain of milk (which has no “unstoppable machines” in its structure, which has the whole world as a potential milk supplier, and which has an impressive power over the “in” and “out” price) only thinks about itself and in its benefits. Why are consumer prices rising, when producer’s prices are falling? This is a grave imbalance that should be investigated.
Farmers are very special suppliers. Mostly, they’re very tough people, who work in (aggravating) conditions that no other sector shares. Governments must act to compensate these conditions, or one of these days there will be millions of unemployed people with no future, and massively abandoned land surfaces. Please consider this in your decisions.
Thank you for your attention.
Best regards,
Ana