European Commissioner for Agriculture Phil Hogan has come under increasing pressure from MEPs to address ongoing issues in the dairy sector.
Today (Tuesday) MEPs voted in favour of a report by Northern Ireland MEP Jim Nicholson ‘Prospects for the EU dairy sector – review of the implementation of the dairy package’.
The document seeks to assess the support measures of the dairy package and recommends solutions to address market volatility.
Independent MEP Marian Harkin said Commissioner Hogan must implement more responsive and realistic safety net measures for the dairy sector in order to address the collapsing milk price and he must ensure that the intervention price better reflects real production costs.
She said Nicholson’s report recognised that the current safety net measures, such as intervention and aids to private storage alone, are not sufficient to deal with the persistent volatility in the milk sector.
“The intervention price is too low and does not reflect real costs and furthermore the European Parliament agreed that, subject to objective criteria, export refunds should be restored temporarily in the case of a market crisis.”
Harkin also said that with supply outstripping demand, the impact of the Russian embargo and, with China pulling back from world markets, there is an impending crisis in the dairy sector.
“This was clearly signalled by the huge drop in the Global Dairy Index which now stands at 634 points, less than half of what it was in 2014 and just 61 points above its lowest ever point in July 2009. For an Irish dairy farmer with a 75-cow herd this can lead to reduced income of €35,000 per annum.”
Persistent volatility, she said, in the markets is a huge issue for dairy farmers and the EU Commission must be willing to intervene before farmers’ livelihoods are destroyed.
“Unfortunately Commissioner Hogan in his response to the European Parliament gave no indication that the EU Commission was ready to act. Rather he mentioned tools which the Member States already have at their disposal, in particular the possibility of coupled support of up to 13%. He said that such support delivered from €74 per cow in France to €300 per cow in Hungary.”
Harkin said Commissioner Hogan cannot wash his hands and pass the buck entirely to Member States.
“He has tools at his disposal and he needs to use those tools now.”