No ‘silver bullet’ solution for dairy sector

There is no easy fix to the challenges that will face Europe’s dairy sector throughout 2015 and beyond, according to MEP Jim Nicholson, who is currently preparing a report on the future of Europe’s milk industry on behalf of the EU Parliament’s agriculture committee.

Speaking at the parliamentary hearing in Brussels on the future of the EU dairy sector this week, he referenced the broad basket of market support tools that will be required to future proof  European milk production while, at the same time castigating, the European Commission for its lack of action on this matter over recent weeks.

“The Commission is living in denial if it thinks that the dairy sector is not in crisis,” he said.

“I am deeply concerned that we are now looking at a re-run of 2009, when the Commission failed to act in preventing a disaster impacting on the dairy sector.

“In the short term, intervention prices must be increased. But beyond that we are looking at a range of measures which can be used to reduce the impact of volatility on dairy producer incomes.”

Nicholson referenced the potential role of contracts, fixed in term of both volume and price, as a fundamentally important dairy support tool moving forward.

“But, for this approach to work, there must be buy-in at all levels within the agri-food chain, including retailers and input suppliers,” he said.

“And farmers will also be required to take a degree of control over their own affairs. Milk producers in the US can now buy into an insurance scheme, designed to protect their incomes during those periods when market returns do not over their costs of production. There may well be merit in taking a similar approach here in Europe.”

Nicholson ruled out the re-introduction of milk quotas by the back door.

“Quotas did not prevent the crisis that engulfed the milk sector back in 2009,” he said.

“We have to move on and identify new ways of delivering a degree of certainty for Europe’s dairy sector at farmgate level.”

The MEP’s report will be published in draft form at the end of February. It will be debated by the membership of the European parliament’s agriculture committee during March, which should allow for its formal publication in April.

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