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MILK-NEWS

http://www.europeanmilkboard.org

Dear Dairy Farmers and Interested Parties,

The new regulation on the dairy market has just been adopted. During the discussions on the Milk Package, I took part in several talks with MEPs and Paolo De Castro, the Chair of the European Parliament’s Committee on Agriculture. We are on good terms with Mr De Castro, but unfortunately that is not enough. Although the Parliament has made significant changes, we still have a long way to go.

The compromise reached is not satisfactory in our view. However, I think there is a real chance that a monitoring agency will be set up in the future. Besides, as Mr De Castro confirmed, the Parliament intends to come up with new rules for the agricultural sector to enable market crises to be anticipated. And I believe that in this sense the work we have done with the EMB was extraordinary. We succeeded in creating the conditions required for the monitoring agency to be set up.

Moreover, the fact that the role of the Parliament was strengthened by the Treaty of Lisbon gives us hope for the future.

It is essential that the producers unite within the EMB. I believe it is our only chance. Together we must all focus on the quota reform that is being debated this year.

So my message to every milk producer is this: never give up the fight! We will succeed in the end, the important thing is to remain united... because unity is the EMB producers’ strength! 

 

Roberto Cavaliere
(Member of the Board of the EMB)

Key opportunity missed! The Milk Package adopted cannot strengthen the producers’ position

The current resolution passed by the European Parliament cannot create the balance needed in the dairy market

Brussels/Hamm, 16.02.2012: “It is a shaky result”, is how the President of the  European Milk Board (EMB), Romuald Schaber, summarises the opinion of the European milk producers on the current milk resolution in the European Parliament.

“The regulation adopted refers to contracts between producers and processors but the contracts are not to be compulsory across Europe. That shakes the common market considerably, because now  producers can continue to be played off against one another. Producer organisations are to negotiate on behalf of producers, which is good, but the pooling limits of 3.5% of milk production across the EU and 33% nationally are unfortunately much too low”, Schaber explains the critical details.

read more...

“A step in the right direction” - Interview with Marc Tarabella, MEP

Astrid Sauvage: Mr Tarabella, thank you for granting us a few minutes to answer our questions. First of all we’d like to ask how, in your opinion, the market will develop in the next few years, given the new conditions that have been created?

Marc Tarabella: I hope it will develop well in the next few years. Personally I was in favour of the old quota system. But the majority of the member states want nothing to do with it, so a system had to be found to replace it. But the agreement now reached is unsatisfactory, I feel.

read more...

Croatian Dairy Farmers protest over for the time being

Since the beginning of the year a conflict was smouldering between milk producers and the Lactalis dairy Dukat in Croatia, due to low milk prices. But the crucial phase of the conflict seems to be over now.


After the Dukat dairy’s unilateral announcement of cutting the farm-gate price for milk from the previous 2.67 kuna to 2.3 kuna (about 30 cents) per kilo of raw milk, in January the milk producers of the EMB member organisation HSUPM entered into negotiations with the dairy and the Ministry of Agriculture, but the talks were stopped in mid-February without any result.

read more...

 

India-EU free trade agreement: sacred cow or Trojan horse? – Report on Sieta van Keimpema’s journey to India

At the invitation of the development aid organisations Misereor (www.misereor.org) and Anthra (www.anthra.org) I travelled to India for a week in February, where accompanied by Armin Paasch of Misereor I spoke with many milk producers and street dealers about the impact the planned free trade agreement between the EU and India will have on them. It is impossible to give a comprehensive report on this journey in a short article, so I can give only a brief impression here.

Whilst water-pipes were bursting in the Netherlands owing to the frost, I stepped out of the plane in Bangalore, India, on 3 February at 3 a.m. local time into 20 degrees. The first thing to greet me was a poster from the ING bank group: They have already found the way to India even without a free trade agreement!

read more...

USA: Milk production needs to be slashed

source: wikimedia commons

In the USA, too, producers in the dairy market are under a great deal of pressure. The large volume of milk prevents fair prices. That is why the Milk Producers Council (MPC), an association of Californian family farms, demands that milk production be slashed.

read more...

Switzerland: Launch of a national petition and demonstration by producers on 2 March

The dairy market has currently reached a dead end. The volumes produced are still increasing. Every organisation seems to want to manage the crisis instead of resolving it. Nobody has any concrete proposals to enable the producers to regain control of the volumes produced or the political courage even to demand it. The producers continue to overproduce and the dairy farms continue to melt away like butter in the sun (2.5 a day). The pressure on the countryside continues unabated with dairies threatening to stop collecting milk if the volumes are not large enough or if the farm is too far from main roads.

read more...

Belgium: MIG Belgium informative meetings

Throughout the week of 13 February, MIG organised informative debates aimed at milk producers on the subject of “Quotas end in 2015 - and then what??”. We had invited two quality speakers: Paul de Montvallon, President of the French Office du Lait, and Nicolas Bezencon, of Uniterre Suisse.

Nicolas presented the Swiss situation in detail. He explained that just three years after total deregulation, prices are rock-bottom, stocks are piling up and producers have reached a dead end. He stressed the dangers of vertical and/or multiple producer organisations, and how the unity of producers was indispensable if they wanted to have a minimum of clout in negotiations. He presented the scenario that could well be replicated on the European scale.

read more...

EMB Calendar

Please find here some of the most important meetings of the EMB executive board in March:

  • 06.03.: Meeting of the Advisory Group on Milk in Brussels
  • 07.03.: Meeting of the Nyéléni-Forum for food sovereignty in Brussels
  • 12.bis 13.03.: EMB members’ assembly in Brussels
  • 22.03.: Congress of the French dairy producers’ organisation OPL in Saint Germain en Coglès (Bretagne)

 

read more...

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Full Texts

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Key opportunity missed! The Milk Package adopted cannot strengthen the producers’ position

The current resolution passed by the European Parliament cannot create the balance needed in the dairy market

Brussels/Hamm, 16.02.2012: “It is a shaky result”, is how the President of the  European Milk Board (EMB), Romuald Schaber, summarises the opinion of the European milk producers on the current milk resolution in the European Parliament.

“The regulation adopted refers to contracts between producers and processors but the contracts are not to be compulsory across Europe. That shakes the common market considerably, because now  producers can continue to be played off against one another. Producer organisations are to negotiate on behalf of producers, which is good, but the pooling limits of 3.5% of milk production across the EU and 33% nationally are unfortunately much too low”, Schaber explains the critical details. The processors as bargaining partners already have a market share that is triple that of these pooling limits in some cases, so they will always dominate negotiations. Moreover, the articles of the regulation make it very difficult for members of co-operatives to have a producer organisation negotiate on their behalf.

 As Schaber stresses, the new provisions cannot guarantee healthy market activities, even if a few approaches are heading partially in the right direction. “What is positive, for instance, is that the recitals of the regulation mention a European price monitoring instrument. But there is no detailed description. Moreover, the name unfortunately implies that only prices are to be monitored”, says Schaber. But that is not enough. The costs of milk production, market supply and demand must also be ascertained by this instrument. In addition to the observation function addressed, the monitoring agency should also have a reaction mechanism to enable market imbalances to be actually reduced.

Just as every house needs a solid foundation, the dairy market also needs a good framework to enable a fair co-existence without distortions in competition. The Milk Package adopted just now does not offer this framework. It includes no clear improvements for the European milk producers; instead, it cements their weak market position. For the EMB it is evident that the policy has to be greatly improved for the good of consumers and milk producers. Together with other civil society groups, the European milk producers’ organisation will continue to make constructive proposals and hold the policy-makers to their responsibility.

EMB press release of February 16th 2012

 

On 28th February 2012 the Council of the EU approved the proposal. It is expected to be officially signed in March. The rules concerning contracts, producer organisations' negotiation mandates and the volume management system for quality cheese will come into force six months after its signature. The rules should be valid until June 2020.

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“A step in the right direction” - Interview with Marc Tarabella, MEP

Astrid Sauvage: Mr Tarabella, thank you for granting us a few minutes to answer our questions. First of all we’d like to ask how, in your opinion, the market will develop in the next few years, given the new conditions that have been created?

Marc Tarabella: I hope it will develop well in the next few years. Personally I was in favour of the old quota system. But the majority of the member states want nothing to do with it, so a system had to be found to replace it. But the agreement now reached is unsatisfactory, I feel.

It is still a step in the right direction – with some positive points, such as the fact that producers are given a stronger position. I think that was the least that could be done because they are so scattered, up against a great concentration, a great deal of power in the hands of the food-processing industry and the distributors. So we’re going in the right direction by uniting producers and in strengthening the inter-branch organisation. In my view what today’s proposal lacks – and this is what I’ll say in Strasbourg next week – is the role that the public sector has in this inter-branch organisation, to make the rules and arbitrate in the disputes there will be between producers, processors and distributors.

A.S.: Do you mean the monitoring agency?

M.T.: I do mean the monitoring agency, but also the observatory for prices and margins. We were unable to have this idea accepted on a European level. Some say it is bureaucracy, but I don’t think so. It would be restoring the role of watchdog to the public sector. When rules are not observed or when some groups – like the producers – now see their livelihood threatened, only a public body can try to guarantee security. Nevertheless, I think it would have been worse not to have reached any agreement.

A.S.: And what do you feel are the positive points in the agreement? In particular, what do you think of the limits set on producer pooling? Will they be enough to strengthen the milk producers’ position in negotiations?

M.T.: I think that one of the positive points in the agreement is the recognition of the producer organisations. The idea was to make their position stronger. The upper limits of 33% of production per member state and 3.5% on the European Union level were introduced to prevent organisations in very productive areas negotiating rock-bottom prices. Because a producer association doesn’t necessarily mean that it operates in the interest of every producer, but definitely in the interest of its members. So we tried to find a happy medium, to prevent any pernicious effect. Perhaps that will not suffice, but at any rate monitoring is planned. If we see that the current system is not working or there are any weaknesses we can rectify the system between 2014 and 2018. It’s already a step forward. But I do not say that will be the solution, so I’m still circumspect.

Other positive points are the inter-branch organisation and transparency. I believe it is very useful to know what the market trends are, hence the transmission of data on the quantity, quality and also development of the market.

Besides that there is the recognition of protected geographical indications (PGI). Of course this applies primarily to the cheese sector, but it is a good thing to have recognised certain cases of excellent quality. It will be possible to protect the market.

A. S.: And what parts do you regard as inadequate?

M.T.: One of my regrets is the less favoured areas (LFAs). The text acknowledges the existence of LFAs but does not propose any major concrete plan to try and solve the problem. That is why from the outset I championed compulsory contracts. Unfortunately we came up against the Council, the majority of which didn’t want compulsory contracts.

A. S.: What is your overall assessment?

M.T.: My general feeling is that we must have something to replace the old system. I’m convinced we took a step in the right direction, but perhaps that is not enough. We will have to keep a careful eye on things. But there is still the Single CMO dossier that will also have an impact on the dairy market.

A. S.: Mr Tarabella, thank you for this interview.


Interview: Astrid Sauvage (EMB)

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Croatian Dairy Farmers protest over for the time being

Since the beginning of the year a conflict was smouldering between milk producers and the Lactalis dairy Dukat in Croatia, due to low milk prices. But the crucial phase of the conflict seems to be over now.

After the Dukat dairy’s unilateral announcement of cutting the farm-gate price for milk from the previous 2.67 kuna to 2.3 kuna (about 30 cents) per kilo of raw milk, in January the milk producers of the EMB member organisation HSUPM entered into negotiations with the dairy and the Ministry of Agriculture, but the talks were stopped in mid-February without any result.

Even the previous 2.67 kuna price paid to milk producers by no means covered their costs. These are about 4.09 kuna (52 cents). Yet the dairy is not prepared to revert to the old price, which the producers vehemently demand. Dukat’s argument is that the cheap imported milk from Bosnia and Serbia results in the retail price of milk in the supermarket being only 3.90 kuna (51 cents), and so it cannot pay a higher price.

The roughly 14,000 milk producers in Croatia produce 600 million litres of milk a year, which covers only 50% of national demand. The other 50% is imported.

What makes the situation particularly problematical for the milk producers is that the Minister of Agriculture has just cut state support payments by a third. So the farmers are under severe financial pressure from this side, too.

That is why on Thursday, 7 February, milk producers from all over the country drove their tractors to the dairy in Zagreb to organise a warning campaign. For several days between 80 and 100 tractors were parked in the central car park outside the dairy, where they were corralled by the police. Although the access roads to the production sites were clear, Dukat used the alleged blockade as an excuse to stop collecting milk from the producers. Yet the protest seems to be showing initial signs of success. The Police have manifestly withdrawn their strong presence and are now just monitoring the situation.

Dukat has since resumed its milk runs, and there have been talks between the dairy, the Ministry of Agriculture and the milk producers.

Against this background the majority of milk producers have accepted a very slight increase in the farm-gate price. The representatives of HSUPM regard this as inadequate, though, which is why the warning demonstrations were continued until midday on 29 February.

A key outcome of the negotiations is the belated payment to the Croatian farmers of the state bonuses for 2011. These are also to be retained in future, even though – as already announced – they will be cut by 30% from 2012.

The heated phase of the conflict now seems to be over. The farmers have returned to their farms, and important partial successes were achieved. However, the low farm-gate price remains a major burden for our Croatian colleagues, and it is hoped that the dairy and the Ministry will remain open to talks in the future.

Julia Turchenko (EMB)

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India-EU free trade agreement: sacred cow or Trojan horse? – Report on Sieta van Keimpema’s journey to India

At the invitation of the development aid organisations Misereor (www.misereor.org) and Anthra (www.anthra.org) I travelled to India for a week in February, where accompanied by Armin Paasch of Misereor I spoke with many milk producers and street dealers about the impact the planned free trade agreement between the EU and India will have on them. It is impossible to give a comprehensive report on this journey in a short article, so I can give only a brief impression here.

Whilst water-pipes were bursting in the Netherlands owing to the frost, I stepped out of the plane in Bangalore, India, on 3 February at 3 a.m. local time into 20 degrees. The first thing to greet me was a poster from the ING bank group: They have already found the way to India even without a free trade agreement!

The purpose of my trip to India was to speak with Indian milk producers about the European dairy sector and the European Milk Board. For the situation of the milk producers in India will be heavily affected if the EU is given the right to export dairy products to India duty free. The meeting was most interesting. The problems of the Indian milk producers I met in Horsley Hills sound familiar to European ears: the price paid to producers does not cover production costs, the producers have no influence on the market, and the government is aiming to boost production. And the problems with their Holstein-Friesian cows are also the same as in Europe: mastitis and fertility problems.

In the afternoon we (Armin Paasch, Asja and Sagari of Anthra, and I) travelled at the invitation of the milk producers to one of their villages to see how the cows are milked and to visit the milk collection point. When we arrived the dairy cattle were already hitched up in the road. No milking shed is needed, the cows are simply milked in the road (not a problem, because there are practically no cars in this village). The milk is then driven to a collection point, analysed and taken the next day along with the morning milk to another village where there is a cooling tank. Here, too, the milk is re-tested before being put into the ‘big’ 1,000-litre tank.

In the village we saw the milk producers’ test results. They are paid by quality and fat content. The milk price fluctuates between 17 and 20 rupees (26 and 30 cents) a litre. Not much less than our average farm-gate price for 3.5/3.6% fat, as I found out.

There are hardly any milk co-operatives in India. Although the Indian government had encouraged co-operatives for years, after a change of government the conditions changed, whereby private dairies were given tax advantages over co-operatives. The fact that the wife of a minister owns a private dairy may have had something to do with it.

The next day at the collection point we spoke again with milk producers about their problems. They gave us a calculation of the cost of producing a litre of milk and a list of the problems they have with the Holstein-Friesian cows. These cows produce more milk than local breeds, but they do not tolerate the heat. It is expensive for the farmers to treat mastitis, and they are struggling with fertility problems. Why don’t they buy local cattle, then, we asked? That would be better and more sustainable. The answer was simple: because they earn too little from producing milk, the farmers have to take out loans to be able to buy a cow. But loans are approved only if they buy Holstein-Friesian cows. So the milk producers have no choice.

These people became utterly dependent on milk production because of previous free trade agreements. Other countries with which free trade agreements were concluded have taken over the markets in many sectors. For instance in silk production, which in the region we visited used to be a good source of income for the local population. Following a free trade agreement this sector was taken over completely by the Chinese, producing cheap silk of poorer quality.

It is the same with many products that used to be cultivated and produced in this region. The only option they still have is milk production. That explains the fear the farmers of the region have of future European exports. For millions of people with no land the loss of milk production means they will be forced to move to the towns and cities. But there have been no jobs in the urban areas for a long time, which is why millions of Indians have to beg for a living and lead a degrading life in the slums.

The EU officials and Commissioners claim that India is now a developed country that no longer needs to be protected by import duties. That is why India has to open up its markets to European products, they say. The reality is different: hundreds of millions of Indians live on less than one euro a day. Only they don’t live, they survive.

Our European prosperity will cost human lives. Unfortunately “moral” does not come into the (strictly confidential) free trade agreement concept between the EU and India. I very much hope that the sacred cow that is called “free trade” does not turn out to be a Trojan horse for the Indians.

Sieta van Keimpema, Vice-President of the EMB

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USA: Milk production needs to be slashed

source: wikimedia commons

In the USA, too, producers in the dairy market are under a great deal of pressure. The large volume of milk prevents fair prices. That is why the Milk Producers Council (MPC), an association of Californian family farms, demands that milk production be slashed. Last year milk production was up on 2010, whereas there was no corresponding development in demand. So prices have been in freefall since August 2011.

Unless milk production is slashed, the MPC fears that losses for the producers will be severe.

Silvia Däberitz (EMB)

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Switzerland: Launch of a national petition and demonstration by producers on 2 March

The dairy market has currently reached a dead end. The volumes produced are still increasing. Every organisation seems to want to manage the crisis instead of resolving it. Nobody has any concrete proposals to enable the producers to regain control of the volumes produced or the political courage even to demand it. The producers continue to overproduce and the dairy farms continue to melt away like butter in the sun (2.5 a day). The pressure on the countryside continues unabated with dairies threatening to stop collecting milk if the volumes are not large enough or if the farm is too far from main roads.

In view of this vacuum, Uniterre is convinced the solution must come from farming families. Only they still have enough credibility to prick the conscience of the population and of the politicians. So Uniterre is going to pile on the pressure in the next few days to make the highest political bodies in the country compel all the producers to participate in a system of flexible management which the producers have been demanding for several years, in Switzerland and Europe. To mobilise the producers, a giant boot will start criss-crossing the country today and will end up at the place fédérale in Bern on Friday at 11.00 hours.

More info (in French) http://www.uniterre.ch/Dossiers/lait.html

More info (in German) http://www.uniterre.ch/DE/Dossiers/BauernAufstand.html

To keep up the pressure on 2 March, Uniterre, supported by BIG-M, consumer associations, dairy companies, direct and contractual sales associations, has just launched a national petition, which has already achieved patent success. It makes you realise how attached consumers are to milk producers.

Petition in French: http://www.uniterre.ch/doc/petition_lait_vdef_f_004.pdf

Petition in German: http://www.uniterre.ch/doc/milchpetitiondeutschdef_001.pdf

Nicolas Bezencon (Uniterre)

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Belgium: MIG Belgium informative meetings

Throughout the week of 13 February, MIG organised informative debates aimed at milk producers on the subject of “Quotas end in 2015 - and then what??”. We had invited two quality speakers: Paul de Montvallon, President of the French Office du Lait, and Nicolas Bezencon, of Uniterre Suisse.

Nicolas presented the Swiss situation in detail. He explained that just three years after total deregulation, prices are rock-bottom, stocks are piling up and producers have reached a dead end. He stressed the dangers of vertical and/or multiple producer organisations, and how the unity of producers was indispensable if they wanted to have a minimum of clout in negotiations. He presented the scenario that could well be replicated on the European scale.

 Paul then gave an insight into the French situation, in which the Minister pre-empted the European decisions by introducing obligatory contracts in 2011. He went into detail on the abuses of these contracts (price not specified, excessive term of contract, no possible leeway, obligation to buy supplies etc.) and the pressure put on producers to sign. He also stressed the problem of “alienation” between some co-operatives and their members. He also did a mini-tour of the world of regulation, which made the audience realise that whilst Europe is deregulating across the board, other countries are reverting to certain types of regulation (the USA). He finished his presentation by putting forward a plan for a European regulatory agency and national milk agencies, the only plan that would enable producers to establish in the sector the position they deserve.

The presentations were keenly listened to, then the floor was handed over to various organisations represented and to the dairy representative. They had all been invited to discuss the issue, and perhaps to develop lines of common thought.

All the agricultural organisations (FWA, FJA, FUGEA) indicated their fears for post-2015, and emphasised the necessity of implementing another form of regulation to reduce the risks of price volatility and/or chronic low prices. On the other hand they all stressed that the producers were divided on the question and so unity around a joint plan could well be difficult to achieve. Some lines of thought were followed, in particular implementing a “a charter of good conduct between buyer and producer’’ but it seems rather weak in relation to the difficulties the sector may well face. 

All the co-operative dairies (Walhorn, MUH and LDA) indicated that in 2015 they would collect all the milk produced by their producers. The majority had pre-empted an increase in production by investing in upgraded infrastructures. They likewise stressed the lack of unity among producers with regard to interest in regulation. As regards the contract and the producer organisations (POs), since 90% of the milk in Belgium is collected by the co-operatives and these co-operatives become de facto POs, in their view POs would bring nothing to Belgium. In the same way, as the producer is tied to his co-operative, whether a contract is signed or not is also optional.

Then the debate was opened up to the audience. Most of the questions were about the Swiss and French presentations. The exchanges clearly demonstrated the producers’ great interest in the issue. There was also a lot of discussion of how the co-operatives work, many producers saying they had very little say in how the co-operatives work.

These meetings brought home the unease among producers and the lack of a plan to guarantee them clout in future negotiations and a fair farm-gate price. More than 600 (!) producers attended these meetings, and went away with a lot of information but also undoubtedly with even more questions about the future than when they arrived. During the informal discussions after the meeting everyone without exception hailed the concrete and ambitious proposals put forward by the EMB and stressed the necessity of a strong European organisation to represent them effectively.

Sebastien de Moitié (MIG)

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EMB Calendar

Please find here some of the most important meetings of the EMB executive board in March:

  • 06.03.: Meeting of the Advisory Group on Milk in Brussels
  • 07.03.: Meeting of the Nyéléni-Forum for food sovereignty in Brussels
  • 12.bis 13.03.: EMB members’ assembly in Brussels
  • 22.03.: Congress of the French dairy producers’ organisation OPL in Saint Germain en Coglès (Bretagne)

Impressum

European Milk Board asbl
Rue de la Loi 155
B-1040 Bruxelles
Phone: +32 2808 1935
Fax: +32 2808 8265
E-Mail: office@europeanmilkboard.org
Website: http://www.europeanmilkboard.org