AS THE 30-year European Union milk production quota comes to an end, the European Milk Board (EMB) has warned of a potential crisis for dairy farmers across Europe.
EMB President Romuald Schaber highlighted the lack of effective crisis programme to support dairy farmers who would now have to ‘cope without any regulatory framework in the future’. He went on to predict an upsurge in production which could lead to a chronic price slump as farmers are ‘left at the mercy’ of major companies who will be able to ‘fill their boots’“Thanks to the expected milk surplus, as of now conglomerates will dictate terms and conditions to the farmers even more than before. Prices will be rock-bottom, as Europe’s farmers will have even less market power to achieve a cost-covering milk price in the future”
“Without an effective crisis instrument, dairy farmers will be facing rock-bottom prices time and again; many of them will be catapulted out of milk production very soon.”
Dairy farmers from across Europe gathered in Brussels on Tuesday to protest the changes, which the EMB called a warning fire and funeral march. “The system for the period after the milk quotas is severely deficient. Unfortunately politicians have failed to put suitable market instruments in place to prevent a crisis”, said Sieta van Keimpema, EMB Vice-President. The problem is: it is most likely that dairy farmers in many EU countries will step up production considerably when the quota system ends – without the market being able to offload the whole volume in any reasonable way. “Chronic price collapses are inevitable, the next crisis is on its way”, added Schaber.
The EMB is now calling for the implementation of a Market Responsibility Programme (MRP), which can be used as the quotas come to an end to help encourage farmers to act in line with the market. In real terms this could see farmers who voluntarily produce less in times of lower market demand receive a bonus for loss of potential earnings, while those who heavily over-produce would be subject to a MRP levy
“This will enable us to create a predictable environment and also secure milk production throughout the EU for consumers”, said Schaber.
The fears that market prices will plummet and put dairy farmers in the UK out of business is also leading to a number of new campaigns, including an update on the Footprint Buy British, Boost Britain pledge which will commit signatories to buying British milk from responsible farmers and wholesalers who are not over-producing or squeezing farmers on price.
It is also calling on signatories to put their suppliers under pressure to support UK dairy producers and not push prices down.
Footprint Managing Director Charles Miers commented “The UK Foodservice sector yields great purchasing power, which puts them in a situation whereby they can influence and drive positive change for dairy farmers in this time of potential crisis.
“Many of the companies we work with are already committed to supporting the wider food sector by buying British products; we call on them to ensure that they are encouraging their suppliers to do the same and create a circular food economy within Britain, which is not only the right thing to do but also good for business.”