Why some European dairy farmers want supply control in times of crisis
The European Milk Board and the German Dairy Farmers Association (BDM) are to press in Europe for the introduction of their newly developed Market Responsibility Programme (MRP) which includes supply restriction measures.
They say the MRP is designed counteract looming market crises in the milk sector early and properly in future.
The MRP is a programme for the EU milk sector that would be used when there is a risk of a milk market imbalance. The programme includes measures which restrict the farmers supply of milk in crisis circumstances.
Measures of the programme include: If the milk market falls by 15%:
- A restraint on supply is imposed (at least 5 %), bonus for reducing production; and,
- Market responsibility levy from the first kilo for farms increasing production.
Obligatory cutback phase (Market Index falls by 25%)
- Universally applicable reduction in the supply of milk by 2-3 % for a defined period, e.g. six months.
The European Milk Board says 2015 will decide the fate of European dairy farmers.
It says with the abolition of the milk quota at the end of March all the indications are that production will rise.
According to the European Milk Board, supply already exceeds demand, and milk prices are in free fall throughout Europe.
If the milk quotas turn out to be the last limit system, that will inevitably mean the end for many dairy farms, it says.
The European milk producers therefore stress the need for the Market Responsibility Programme (MRP), developed by the European Milk Board and the German Dairy Farmers Association (BDM), to be put into action.
It says the programme creates effective incentives for farmers to adjust their production volumes to the market.