In spite of the current high butter prices, the dairy sector remains in its chronic poor state because the Common Agricultural Policy (CAP) lacks a mechanism to prevent crises. This is according to the European Milk Board (EMB) during a protest last week in Brussels.
The EMB claim that the frequency of crises in the sector is alarming and has not only driven many farms out of business in recent years, but has also severely destabilised the few farms left producing milk.
Sieta van Keimpema, vice president of the EMB said: “Forced cuts are usually made at the cost of animal welfare as well as the farmers living and working conditions. “It is an impossible situation for the last link in the milk production chain, which has received no consideration in policy to date. Major distortions in competition on the dairy market have, for many years, led to prices that are significantly lower than inherent production costs.”
In a study published last week milk production costs in five key milk-producing countries, recognise this deficit. Even so-called “better years” were unable to compensate for these losses: since 2012, the annual average deficit in France has been 21 percent, in the Netherlands 23 percent, in Germany 22 percent, in Belgium 24 percent, and in Denmark 17 percent.
“To be very clear: farmers are not asking for subsidies to produce milk. What they need is a mechanism that would finally safeguard the sector from further hard-hitting crises. A mechanism that is flexible enough to allow growth in the sector and could also cater to increasing demand. This mechanism must be legally anchored in the CAP. As the past has clearly shown, the absence of such provisions means that reactions come too late and even then, often lead to nowhere,”
The specific proposal is to complement the Milk Market Observatory with a permanent mechanism that could temporarily limit or reduce production in the event of crises. Exploitation in the dairy sector can be stopped and the chronic difficult, painful times can be curtailed if a legal provision in the CAP were to sustainably regulate voluntary production cuts in the future,” added Ms van Keimema.