European Dairy Farmers Seek Policy Changes to Prevent Crises
The European Milk Board (EMB) says the EU has an opportunity to reshape the framework governing the dairy market. Its proposals coincide with work on the directive covering unfair trading practices, the further development of the Common Market Organisation (CMO) and discussions about future crisis instruments.
EMB president Kjartan Poulsen said the weaknesses of the dairy market had been known for years. The organisation said producers remained in a weak position when negotiating with dairies and retailers, while prices often fell below production costs. It also said action on excess supply was frequently delayed or absent during crises.
The EMB wants the revised unfair-trading-practices rules to prohibit the purchase of agricultural products at prices that do not cover their production costs. It said the calculation should include the full amount of production costs. Company-size requirements, turnover limits and other exemptions should not reduce the scope of the rule, according to the organisation.
The group also called for enforcement mechanisms, sanctions that would deter violations and protection for producers who report infringements. It said these measures were necessary for a ban on below-cost purchasing to operate effectively.
On crisis management, the EMB proposed a permanent early-warning and response system. It cited the EU’s voluntary milk-volume reduction scheme from 2016, saying that the measure allowed direct intervention in supply and had a positive effect on prices. The organisation wants key parts of its Market Responsibility Programme incorporated into EU market policy so that action can be taken when surpluses accumulate and prices decline.
The EMB said amendments submitted by members of the European Parliament already included elements of that programme and the use of full production costs as the threshold for market measures. It said those amendments would need to secure a majority in the Parliament’s agriculture committee before becoming part of the Parliament’s negotiating position with the Council.
The organisation further called for contracts between producers and buyers to include binding terms, meaningful cost and market indicators, and revision clauses that allow prices to change when production costs or market conditions change. It opposed exemptions that could weaken those provisions. The EMB also backed “mirror clauses” requiring goods entering the European market to meet requirements comparable to those applying to products made in the EU. It said European standards should not leave EU producers at an economic disadvantage or lead to parts of domestic production being replaced by imports.
