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MILK-NEWS

http://www.europeanmilkboard.org

Dear Dairy Farmers and Interested Parties,

Unfortunately the situation in the milk markets in Europe has not improved yet. For many fellow dairy farmers it is as tense as ever – if not threatening their livelihoods. Yet there are increasing signs that give us hope for a political solution. To stress the importance of this we are addressing you in this foreword to the EMB Newsletter collectively as the EMB Board.

For instance, after Poland now Portugal and Spain have called for regulation of the milk market in the Council of Ministers in Brussels. On top of that, Michel Dantin, the Reporter on the reform of the Agricultural Market Organisation to the European Parliament, said recently at a conference that there had been three votes in Brussels in the last three years on the milk quota and each time the majority in favour of abolishing quotas was significantly smaller. This shows that our positions are gaining more and more support, and should encourage us.

It is quite apt that in Canada the system for regulating the milk market has worked perfectly for a long time now and the milk producers are fighting for the system to be maintained (see the article in this issue of the EMB Newsletter). This also underpins our struggle and the demand for a similar system in Europe.

As the development is gaining momentum we must not relent in any way. So in the run-up to the vote in the European Parliament’s Agriculture Committee on the organisation of the agricultural market we call on you to join us at a big demonstration in Brussels in mid-November. Pencil this in your diary now and encourage farmers in your country to take part in this campaign of action. It is vital that we turn up in large numbers in Brussels this time to lend our support to those MEPs who are on our side. We are counting on your active support!

The EMB Board 

Defend our mechanisms for managing supply!

In this article the President of the Quebec Federation of Milk Producers, Bruno Letendre, emphatically advocates maintaining and further developing the statutory supply management in the Canadian milk market.

The dairy sector in Quebec is well known for its quality products and the part it plays in the sustainable economic development of the Quebec region. The dairy industry plays a key role in this, contributing 5.1 billion Canadian dollars to the gross domestic product of the federal state. More than 81,000 jobs in Quebec depend directly or indirectly on the dairy sector. These jobs are spread throughout Quebec and have a palpable influence on the ability of the rural communities to survive. The dairy sector provides a steady income on which the various regions can rely.

read more...

New brochure makes a few things clear about co-operatives

Just as in the last issue of the EMB Newsletter and the one before last, we are reproducing in this issue an excerpt from the EMB’s recently published brochure on co-operatives in the dairy sector. If you are interested you can obtain the complete version of the brochure on co-operatives in German, English and French from the EMB.

 

The Netherlands: Brief history of co-operatives in the dairy sector since 1890 and their significance for farmers’ incomes

DR. NIEK KONING

Within the Dutch dairy industry, co-operatives have a dominant position. They process around 90 percent of all milk produced in the Netherlands. In fact, the lion’s share is processed by one co-operative giant – Friesland-Campina – a modern company with a strong position in international markets. This situation should make the Netherlands the case par excellence to prove that co-operatives can compensate the weak market position of farmers in a liberalised market. Unfortunately, the claim fails to pass the test of reality.

read more...

The financial plight of Dutch milk producers

The Nederlandse Melkveehouders Vakbond (NMV), one of the two EMB member organisations in the Netherlands, is very worried about the financial situation of the Dutch milk producers. The combination of a plummeting milk price and the palpable increase in the costs of diesel, roughage and concentrated feed is causing liquidity problems for a rapidly growing number of milk producers.

The NMV is receiving more and more complaints from milk producers who have reached their credit limit and are having trouble paying their bills. The mixed feed industry also confirms that farmers are paying their bills later and later. The worst thing is when the ever dwindling profit margin coincides with outstanding repayments for work the previous year and expenditure on grass silage. The money quickly runs out then.      

read more...

Dutch supermarkets cut prices paid to suppliers

The Dutch supermarket chains Albert Heijn and Jumbo wrote to their suppliers in mid-September informing them that they had unilaterally decided to axe prices by 2% on existing contracts. Their reasoning was that the suppliers had benefited from the supermarket chains’ expansion policy and so the contracts had to be amended accordingly.

This practice makes it patently obvious that the food trade has no basic rules for ensuring fair business relations in the sector. In reply, food suppliers told the media that measures like unilaterally slashing contractually agreed payments or extending terms of payment were the norm. 

read more...

France: Hundreds of dairy farmers show solidarity with accused fellow farmers

On 4 October 2012 there was a huge demonstration by farmers in St. Etienne, southern France. The reason for the demo was a court case against nine dairy farmers charged with property damage in connection with the milk strike in 2009. During the strike the regional Chamber of Agriculture was occupied by incensed milk producers and milk was dumped, because the chamber had opposed the dairy farmers’ demands. After the direct action the then Chairman of the Chamber arbitrarily informed the police on nine predominantly young farmers, who are now on trial.

read more...

The majority in favour of abolishing quotas is dwindling

Michel Dantin, the French MEP and rapporteur on the current review of the European agricultural market organisation, made an extremely interesting statement at a conference in the European Parliament in Brussels on 19 September on the abolition of milk quotas in the EU.

read more...

EMB Calendar

Please find below some of the most important events in October 2012:

  • 2.-4.10.:  Meetings with MEPs in Brussels

  • 17.10.:  Presentation of the study on co-operatives in the EU in Brussels

  • 23.10.:  Meeting of the EMB-Board in Croatia

  • 23.-25.10.:  EMB-General Assembly in Croatia

read more...

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Full Texts

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Defend our mechanisms for managing supply!

In this article the President of the Quebec Federation of Milk Producers, Bruno Letendre, emphatically advocates maintaining and further developing the statutory supply management in the Canadian milk market.

The dairy sector in Quebec is well known for its quality products and the part it plays in the sustainable economic development of the Quebec region. The dairy industry plays a key role in this, contributing 5.1 billion Canadian dollars to the gross domestic product of the federal state. More than 81,000 jobs in Quebec depend directly or indirectly on the dairy sector. These jobs are spread throughout Quebec and have a palpable influence on the ability of the rural communities to survive. The dairy sector provides a steady income on which the various regions can rely.

Firstly, this success is undoubtedly due to the quality of the milk and the constant efforts to gear our product to consumer needs. Secondly, though, the fact that our sector is doing well is because the Act governing the marketing of agricultural, fish and food products provides us with the requisite regulatory instruments.

As individuals we have no power in negotiations with the buyers. Without statutory provisions on pooling supply it is impossible for us to achieve a fair market share. This imbalance led to the milk crisis in Europe and the United States in 2008 and 2009, and is currently causing similarly bad market situations in England, France and Belgium.

The legal framework applied to counter this has worked out most successfully in practice here in Quebec. It has enabled the dairy sector to develop in a way that all parties concerned benefit, be they the producers or processors, organised privately or as co-operatives. Thus the Act governing the marketing of agricultural, fish and food products is of crucial importance to efficiency and agricultural progress in the Quebec dairy sector. The current size of and diversity in the dairy sector speaks for itself. It is imperative that the Act be kept in its present form.

What we expect from the government of Quebec and all our parliamentarians is that they are committed to Canada making no more concessions to Europe with regard to milk markets and that this is also their position in all other bilateral negotiations within the WTO. We are counting on receiving the same support from the politicians as we have had so far with the supply management.

A genuine market balance between buyers and sellers, statutory supply management and the agreements applying to this between the Canadian provinces are of fundamental importance to our sector and must be maintained at all costs. That is what we must remind the politicians of.

Bruno Letendre (President of the Fédération des producteurs de lait du Québec)

>

New brochure makes a few things clear about co-operatives

Just as in the last issue of the EMB Newsletter and the one before last, we are reproducing in this issue an excerpt from the EMB’s recently published brochure on co-operatives in the dairy sector. If you are interested you can obtain the complete version of the brochure on co-operatives in German, English and French from the EMB.

 

The Netherlands: Brief history of co-operatives in the dairy sector since 1890 and their significance for farmers’ incomes

DR. NIEK KONING

Within the Dutch dairy industry, co-operatives have a dominant position. They process around 90 percent of all milk produced in the Netherlands. In fact, the lion’s share is processed by one co-operative giant – Friesland-Campina – a modern company with a strong position in international markets. This situation should make the Netherlands the case par excellence to prove that co-operatives can compensate the weak market position of farmers in a liberalised market. Unfortunately, the claim fails to pass the test of reality. The management of these co-operatives has freed itself from effective control by the members. It has become a lobbying force for reforms that serve narrowly defined interests of their enterprises as well as their own ambitions, but hurt the interests of their farmers. The historical development of the dairy co-operatives in the Netherlands clearly illustrates this.

The first butter and cheese co-operatives in the Netherlands were established in the late 19th century. They could force small traders and processors to pay more competitive prices to farmers or to stop trading. Yet the period up until after World War II saw a constant rise and fall in milk prices and a corresponding situation for dairy farmers. This was due to overproduction in the international milk markets, the requisite development of equity capital in the co-operative dairies, the global economic crisis and the shortage during World War II.       

The creation of the Common Market of the European Community in the 1960s was a godsend for Dutch dairy farmers. Exports to European Community countries now earned the subsidised internal EC prices rather than the low international prices. The yearly price support negotiations in the EC, however, revealed a conflict of interests within the Dutch dairy sector. Most farmers wanted price adjustments that compensated higher production costs, whereas the managers of many co-operatives were primarily concerned to boost exports and sales whilst incurring the lowest possible costs.

This conflict of interests became increasingly clear with each and every reform of the agricultural market organisation such as the introduction of milk quotas in 1984 and direct subsidies in 1993. Although the Dutch dairy co-operatives were against the quota in principle, they welcomed the Dutch decision to make the quotas fully tradable between farmers. In this way, maximum room for manoeuvring was created for a further concentration in dairy farming. This would allow a rapid reduction in production costs, which suited the export expansion strategy of the co-operative management. The downside was that young farmers in particular had to absorb the high quota costs to achieve a volume of milk that would secure their livelihood.

The conflict of interests also became evident when direct payments were introduced. Here upon the initiative of the dairy industry the Dutch government joined the ‘Club of London’ – the faction in the EU Council of Ministers that urged for ending all price supports. The farmers’ losses were only partly compensated through direct payments and they saw their incomes decrease. Thus Dutch dairy co-operatives, although once established to defend the income of farmers, welcomed reforms that suited the competitive strategy of their managers but hurt their own members.

As the quotas were no longer used for maintaining reasonable support prices, the reason why farmers supported the quota system had disappeared. Only the disadvantage of tradable quotas – the high quota costs incurred by young farmers – remained. In this situation, the Dutch co-operatives took the offensive. Together with the livestock committee of the meanwhile unified mainstream farmers’ organisation LTO, and playing upon the frustration of young farmers, they lobbied hard for ending the quotas. Their pressure contributed much to the EU decision to phase out the quotas from 2008.

Niek Koning is a researcher at Wageningen University/Netherlands.

Christian Schnier (EMB)

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The financial plight of Dutch milk producers

The Nederlandse Melkveehouders Vakbond (NMV), one of the two EMB member organisations in the Netherlands, is very worried about the financial situation of the Dutch milk producers. The combination of a plummeting milk price and the palpable increase in the costs of diesel, roughage and concentrated feed is causing liquidity problems for a rapidly growing number of milk producers.

The NMV is receiving more and more complaints from milk producers who have reached their credit limit and are having trouble paying their bills. The mixed feed industry also confirms that farmers are paying their bills later and later. The worst thing is when the ever dwindling profit margin coincides with outstanding repayments for work the previous year and expenditure on grass silage. The money quickly runs out then.      

Even if everything seems calm at the moment for the dairy farmers, this is only the lull before the storm. Many milk producers will have to buy in maize and by-products that have also rocketed in price. The NMV fears that it is precisely these dairy farmers who will have to struggle with cash flow problems. For, despite the fact that the prices for dairy products are rising at present, the milk price has not yet improved in recent months.

That is why the NMV is in favour of following the example of numerous other EU countries, with farmers in the Netherlands receiving the single-farm payments earlier as a supporting measure. This could prevent acute financial bottlenecks in the autumn. Unfortunately the Secretary of State at the Ministry of Agriculture, Henk Bleker, rejected this demand. He is of the opinion that the costs and the taking on of extra labour are not in proportion to the time saved by the farmers. However, he does intend to disburse all single-farm payments as quickly as possible after 1 December.

Ria Besseling (NMV)

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Dutch supermarkets cut prices paid to suppliers

The Dutch supermarket chains Albert Heijn and Jumbo wrote to their suppliers in mid-September informing them that they had unilaterally decided to axe prices by 2% on existing contracts. Their reasoning was that the suppliers had benefited from the supermarket chains’ expansion policy and so the contracts had to be amended accordingly.

This practice makes it patently obvious that the food trade has no basic rules for ensuring fair business relations in the sector. In reply, food suppliers told the media that measures like unilaterally slashing contractually agreed payments or extending terms of payment were the norm. 

That is why on 14 September 2012 the Dutch Dairymen Board (DDB) – one of the EMB’s two member organisations in the Netherlands – in conjunction with other representatives of Dutch agriculture demonstrated outside the head office of Albert Heijn. The aim was to make the managers of the supermarket chain aware that every cut imposed on the suppliers would be passed on immediately to the farmers.  

Major supermarket chains have a social responsibility. The management of Albert Heijn apparently realised this and retracted the decision to cut prices paid to the suppliers. But that is not enough for the DDB. The only solution to this essentially moral problem is clear trade rules and laws that restore the balance in the food chain. The current Milk Package is of no use in this respect.

Many politicians are now voicing their concerns about the business practices of the Albert Heijn and Jumbo supermarket chains. It is to be hoped that the critics will not stop at merely speaking but will fight on our side to restore the balance in the food chain as soon as possible. That is in the interest of farmers and suppliers alike.

Sieta van Keimpema (Vice President of the EMB and President of the DDB)

>

France: Hundreds of dairy farmers show solidarity with accused fellow farmers

On 4 October 2012 there was a huge demonstration by farmers in St. Etienne, southern France. The reason for the demo was a court case against nine dairy farmers charged with property damage in connection with the milk strike in 2009. During the strike the regional Chamber of Agriculture was occupied by incensed milk producers and milk was dumped, because the chamber had opposed the dairy farmers’ demands. After the direct action the then Chairman of the Chamber arbitrarily informed the police on nine predominantly young farmers, who are now on trial.

At the demonstration in St. Etienne some 500 dairy farmers showed their solidarity with their accused fellow farmers and marched with them to the court building. The procession was headed by mayors from the municipalities of the accused and by other regional politicians. Every speaker then decried the conduct of the national politicians and the judiciary outside the court building and at the demonstration venue. The totally misguided policy in Paris and Brussels was increasingly threatening the dairy farmers’ livelihood, they said. The milk producers’ reaction, to go ahead with a milk strike and other drastic campaigns of action, had to be seen and judged as self-defence.

The mayors in particular lambasted the “shabby” behaviour of the high-ranking French and European policy-makers. This policy and its consequences were directed against the interests of the local populace and would jeopardise the vitality of the countryside as a whole, said the regional politicians.

The entire demonstration was an impressive display of French fighting spirit and the determination of farmers and the public alike to no longer put up with the government’s inhuman agricultural policy. The dairy farmers of the Confédération Paysanne and their leaders deserve every credit. 

Romuald Schaber (President of the EMB)

>

The majority in favour of abolishing quotas is dwindling

Michel Dantin, the French MEP and rapporteur on the current review of the European agricultural market organisation, made an extremely interesting statement at a conference in the European Parliament in Brussels on 19 September on the abolition of milk quotas in the EU. Mr Dantin said there had been three votes in Brussels in the last three years on the abolition of the milk quotas and each time the majority in favour of abolishing quotas was significantly smaller.

Christian Schnier (EMB)

>

EMB Calendar

Please find below some of the most important events in October 2012:

  • 2.-4.10.:  Meetings with MEPs in Brussels

  • 17.10.:  Presentation of the study on co-operatives in the EU in Brussels

  • 23.10.:  Meeting of the EMB-Board in Croatia

  • 23.-25.10.:  EMB-General Assembly in Croatia

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