With EU milk quotas set to end on March 31, Copa and Cogeca outline measures needed to ensure a viable EU dairy sector

With the EU milk quota regime set to end on March 31, Copa and Cogeca outlined measures crucial to ensure a viable EU dairy sector in the years to come.

Chairman of Milk and Dairy Products Working Party, Mansel Raymond, said: “Post quotas, milk producers will continue to be exposed to market volatility, which is a global phenomenon. Volatility is here to stay and it is a risk factor for farmers’ business and strongly impacts on investments. In the short-term, faced with severe economic problems, milk producers cash flow is under pressure. It is therefore essential that money from the milk super-levy bill returns to the sector so that investments can be made now to enable the sector to meet demand which is expected to grow in the medium-term”.

Copa-Cogeca Secretary-General Pekka Pesonen stressed “In this new post-quota era, the right tools must be in place to help milk producers and dairy cooperatives cope with its effects. Although the EU’s regulatory framework already includes market measures which could help protect producers against this volatility, like EU public intervention and private storage, they no longer represent a real “safety net” able to help milk producers in times of severe market imbalance. These tools need to be adapted and made more efficient to take account of rising production costs and market realities. Other tools for risk management are needed and could include encouraging the development of futures markets to take some volatility out of the market. Income/margins insurance could be investigated or better adapted in order to help farmers manage the multiple risks”.

Mr Pesonen continued “Dairy cooperatives help to strengthen producers positioning on the market. In a post-quota era, it is more important than ever for producers to join cooperatives to improve their position on the market, enabling them to get a better price for their milk. In addition, the EU milk package provisions which aim to strengthen contractual relations between farmers and processors are important. Also the dairy supply chain needs to properly and fairly function and the market needs to better remunerate milk producers.

In addition, coupled support and support for Less Favoured Areas (LFAs) remain essential to help sectors in difficulty and to help overcome natural and structural difficulties in these regions. The modernization of dairy cooperatives in rural areas should be encouraged and facilitated and there is a need to support milk collection costs which are extremely high in mountainous areas. Investments in productivity and competitiveness needs to be promoted, encouraged and supported at farm level. Finally, the EU needs to look ahead, improve access to emerging markets and make use of the market opportunities which look positive in the medium term as a result of the continuing expansion of world demand and changes in consumer demand.

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