Pressure mounts on EU in the face of deepening dairy crisis

EU Agriculture Ministers will meet next week as the dairy market downturn continues to impact on farmers across Europe.

The Agriculture Council meeting will take place on Monday and Tuesday (June 27, 28) in Luxembourg, and will see the Commission update the Council on the market situation.

At the meeting, Ministers will have an exchange of views on the agricultural market situation and the existing market measures in support of the European farmers.

It is understood the discussion will focus on the assessment of these measures.

The meeting comes as politicians across Europe come under increased pressure to find solutions to the crisis which has seen €30 billion drop in income in 2015 and 2016 for milk producers in the EU.

EU milk collection was up by 7.2% in the first quarter of 2016 (= + 2.6m tonnes), part of which can be related to the leap day. Average farm gate milk prices approximated 28.4c/kg in March and a further decrease is experienced in April to 27.7c/kg.

Meanwhile, over 281,000t of milk powder has been sold into public ownership since the start of the year, according to latest figures from the European Milk Market Observatory.

This equates to approximately 17.5% of total EU SMP production in 2015, and approximately 2% of the EU’s annual milk production.

This week the European Milk Board slammed the performance of the Commission saying that it the ‘European Union implementing a scorched earth policy’.

It says that without a tool that allows for capping of milk production volume in times of crises, this policy
will continue to harm not only milk producers but up and downstream sectors as well.

However, thus far Agriculture Commissioner Phil Hogan has remained firm in his stance that any moves to reduce milk production across Europe will remain voluntary and warned that the Commission has limited funding to provide more supports.

Key EU Member States and milk production nations Germany, France and Poland have agreed a common position on how to solve the ongoing difficulties in the dairy market.

The three nations, in particular, agreed on the need to establish a European financial incentive to encourage voluntary reduction of milk production.

However, the move by the three nations yesterday has brought back into focus the possibility that the EU may activate the CAP Crisis Reserve which would reduce the EU payments of all farmers.

Minister for Agriculture, Michael Creed has said he is fully aware of the pressures on dairy farmers right now and is committed to working with all players in the sector to address these issues and ensure that we have a sustainable dairy sector going forward.

“I can assure the deputy that I will continue to engage with the EU Commission and with other Member States to ensure that market support measures are deployed and extended as necessary,” he said recently.