‘Market measures needed to limit milk production’

Pressure is growing for measures to limit EU milk production as the crisis in Europe’s dairy sector continues.

French agriculture minister Stephane Le Foll is set to propose a range of market measures at Monday’s EU Agriculture Council in Brussels. 

These are believed to include financial backing for producers who voluntarily reduce output during periods of declining prices, an export credit facility to boost trade and a temporary increase to dairy intervention prices.

It is understood that the Dutch EU presidency wants to delay a formal debate on the French proposals until next month’s council on 14 March.

See also: Hogan should quit over handling of dairy crisis says EMB

Rob Harrison, NFU dairy board chairman, told Farmers Weekly that he could understand the French drive to bring more confidence to the market given that prices were likely to continue to fall over the next four to five months, leading to more EU milk producers going out of business.

France was likely to receive support from many of the southern member states while the UK’s position of staying clear of extra regulations was backed by Denmark, Holland, German and Ireland, he said.

Mr Harrison added he wanted to see processors and co-operatives coming up with ideas to help the market situation, adding that in the medium to long term it would be essential to concentrate on finding new markets and adding value to products.

The NFU said it was interested in the recent decision by Dutch dairy co-op FrieslandCampina to pay an extra 1.5p/litre to its member dairy producers for six weeks to limit production. The co-op processes about three-quarters of milk produced in the Netherlands and has 13,000 Dutch members, 1,000 in Germany and a handful in Belgium.

Richard Potts, NFU Brussels policy adviser, told Farmers Weekly: “This has come about from discussions between members and the co-op and is something new that we can look at in the future. Certainly, this type of initiative can’t be knocked.”

Meanwhile, the European Milk Board (EMB) has criticised the European Commission president Jean-Claude Juncker for failing to support its drive to for a new crisis tool to encourage production cuts at times when prices fall significantly.

The EMB lobbies for milk producers and has members 15 European countries and co-operates with organisations in others, representing about 100,000 milk producers.

Mr Juncker said in a letter to the board that the commission had “adopted a set of measures supported by €500m, with the aim to offer farmers direct help, especially in terms of market management and cashflow problems”. He said that the EMB’s regulatory approach was not shared by the main dairy stakeholders.

The EMB described his response as “meaningless and did not help in any way. The €500m aid package does not provide the slightest solution to the existing problems”. A spokeswoman added however that informal discussions with EU ministers in recent days had been supportive and that the tide was turning in favour of more help for the sector.

Representing EU farming unions and co-operatives, Copa-Cogeca said it did not want to raise the intervention price at the cost of cutting direct payments and was keen to focus on finding new markets and reopening the Russian market.

“We want to help farmers get a better return for their produce by, for example, joining co-operatives and getting better protection from the European Investment Bank (EIB) for farmers investments/loans to combat volatility,” said a spokeswoman.