The European Commission has been urged to monitor the dairy sector closely and if necessary trigger a “voluntary” milk production reduction scheme” by a group of European producers.
In advance of World Milk Day tomorrow (June 1) a number of organisations that represent European producers have said that a “crisis prevention instrument” needs to be put in place for the dairy sector in the European Union.
The organisations have written an open letter to the EU in which they call on the Directorate-General for Agriculture and Rural Development of the European Commission to “immediately collect and carefully analyse EU sectoral data on the drop in demand, production increases and on the development of producer prices”.
The group also want the EU to “compile information on additional price indicators and production costs”.
In the letter the organisations also advocate that, based on this analysis, the EU should activate a voluntary reduction scheme, “in case of a downward trend where prices fall below production costs, as this is an essential instrument in the EU’s toolbox and it is enshrined in the Common Market Organisation.
Rising milk volumes
The European Milk Board (EMB), European Coordination Via Campesina, National Association of Independent Milk Producers, Confédération paysanne, together with OXFAM (France and Belgium), SOS FAIM and the Comité Francais pour la Solidarité Internationale (CFSI), state in the open letter that this would “take the pressure off” the EU market and “thus off producers in the EU and Africa”.
According to the organisations “significant increases in costs, hand in hand with rising producer prices” heavily influenced the situation in the dairy sector over the last year.
The EU producers also claim that “if yet another crisis is not prevented, the number of farms going out of business will break a new record”.
They warn in the open letter to the EU that if a crisis instrument is not activated, “the dairy sector will very soon be severely affected by an overproduction crisis “due to a drop in demand and rising milk volumes and that a surplus on the market has triggered a “race to the bottom”.
The organisations have also identified a number of “essential reforms” which they say are urgently needed these include:
- Put back on the table a real regulation of milk production volumes and prices;
- Milk pricing must be decoupled from global markets and be initially based on 90% of the internal market values;
- Dairy policies must promote human-scale farms that are, by nature, easier to pass on and more sustainable.
The organisations also stated that the sector “must absolutely change the practices and models and adapt them to climate and biodiversity imperatives”.