'EU Voluntary Milk Reduction Scheme likely to become permanent policy tool'

The European Parliament’s Committee on Agriculture has voted in favour of a voluntary volume reduction programme. This is said to be a positive announcement for the dairy sector, promising much-needed stability.

Such a voluntary reduction programme has been proven to work in the dairy sector in recent times. At the end of last year, the programme was introduced by the EU as a one-off measure and resulted in a high participation rate of producers in the EU.

This included the main producer countries such as France, Germany, the UK and Ireland.

The voluntary reduction programme allowed for the rapid decline in milk prices, to a level of sometimes less than 20c, to be halted and for prices to start recovering, according to the European Milk Board (EMB).

The President of the Irish Creamery Milk Suppliers Association (ICMSA), John Comer, has welcomed the vote of the European Parliament’s Agricultural Committee to support the introduction of a voluntary milk reduction scheme.

Comer said that the introduction of the scheme late last year had been a decisive factor in bringing the 2015/2016 milk price collapse to an end and initiating the ongoing process of returning farmer milk prices to a sustainable level.

“Given the very volatile situation on the dairy market and missing adequate alternatives, the EU institutions now carry a responsibility towards milk producers and consumers in the EU to finally put in place a functioning solution,” said EMB President Romuald Schaber.

He hopes that the proposed volume reduction programme “goes in the right direction”. It is now in the hands of two other parliamentary committees, as well as the EU Parliament’s plenary vote on the proposal, before it will be presented to the council and the commission.

In order for the measure to become an effective and sustainable instrument, the proposed article would, however, also need to provide for a cap on production during the reduction period, the EMB stated.

The ICMSA is aware that there is still some resistance to the idea of voluntary reduction schemes. The association pointed out that it was the “only group in Ireland that identified and advocated this type of solution for the 2015/2016 milk price collapse”.

The prompt take-up of the scheme showed both the need for this type of ‘tool’ and also the ongoing requirement for this type of effective, emergency volume control mechanism, the ICMSA said.

“We know that this works and the vote by the parliament’s Agricultural Committee shows that the MEPs understand that too.

“What we need now is the formalisation of this ‘tool’ and adaptation as a legal policy so that the next time markets come under pressure, farmers can opt to reduce production voluntarily and bring the market back into balance,” the ICMSA President concluded.