The deal on the Common Agricultural Policy (CAP) reform, which has been officially adopted by the EU Council of Agriculture Ministers this week, is “an important step in the right direction, allowing for greater stability in different areas of the agricultural sector with its tool box of crisis instruments”, according to the European Milk Board (EMB).
However, the EMB has said that it does not set forth any measures to ensure that costs for more sustainable production and producer prices actually go hand in hand.
Positive elements of CAP identified by EMB
With the voluntary volume reduction crisis instrument, as well as the market observatories and their functions – such as providing information on market disturbances, production, stocks, prices and, where possible, margins for different agricultural sectors – included in the Common Market Organisation, there is now a legal framework for crises to be identified early on, according to the EMB.
In a statement, the EMB said: “This possibility to avoid surpluses and thus price collapses is a positive development. But these instruments must be used effectively and without delay in the face of crises.
“This is where the European Commission must play its part. A crisis mechanism that would automatically activate the appropriate crisis instrument is still missing.
“The capping of producers with surplus output during the period of voluntary volume reduction, also did not make its way into the reform,” the statement continued.
The EMB said that another positive element is the increase of the pooling threshold for dairy farmers to 4%.
However, the EMB adds that when looking at processors, it believes this is still not enough.
‘Missing’ elements of CAP
The EMB said that costs in the milk production sector are already not covered at present.
The board adds that prices and subsidies are unable to match costs.
“More demanding sustainability requirements entail higher costs as well. It will not be possible to cover this additional burden with raw milk prices nor through green subsidies,” the EMB statement continues.
“This is bad news for both experienced producers as well as young farmers. Even though they can be further supported through a mandatory minimum level of 3% direct payments, young farmers will continue to be the losers in the agricultural sector as long as the cost of more sustainable production is not actually covered by market prices.”
While the EMB has acknowledged the work carried out by the European Parliament and farm organisations in terms of CAP reform, it has said that the EU commission and member states must recognise the need for fairer prices and stability in the dairy sector.