The key demand of the European Milk Board (EMB) for a European monitoring agency aimed at flexible supply management in the EU milk market has been scientifically substantiated for the first time by a study. The expert opinion was drawn up by the Büro für Agrar- und Regionalentwicklung (Office for Agricultural and Regional Development) in Germany headed up by scientist Dr. Andrea Fink-Keßler and was officially presented in Brussels on 24 September at a conference on the future of the EU milk market after 2015.

The starting point of the study is the European milk crisis of 2008/09 and the deregulation of the EU milk markets that started back in 2003. It can be said without exaggeration that, in view of the situation in the milk market already threatening the livelihoods of producers, the future after the abolition of the milk quotas in 2015 has already begun. The facts speak for themselves: in the EU-15 one in five milk producers gave up their farm between 2007 and 2009. In the EU-27 one in three farms had to go the same way.

The study shows in a shocking way how the milk crisis and the subsequent years have bled many farms dry financially. The milk producers have lost revenue, been unable to pay off their debts, used up any reserves still remaining, and in some cases been driven to bankruptcy. The hardest hit have been the large, expanding specialised dairy farms the politicians and consultants regarded as the future of Europe.

And it is not even the consumer who has benefited from the low farm-gate milk prices. For instance in 2009 instead of falling, consumer prices were still 14 per cent up on pre-crisis prices. According to the study, consumer prices are “largely detached” from milk producer prices, as the European Commission likewise established in a 2009 report on the food supply chain.

The study on the monitoring agency concludes that political approaches and instruments like the Milk Package are inadequate or do not tackle at the root the main evil in the milk market – the overproduction of milk. There is political scope for action in place. Article 39 itself of the Treaty on the Functioning of the EU states that the EU agricultural policy must ensure stable markets and a fair standard of living for the agricultural community. Moreover, statistical empirical figures since the milk crisis show that the milk markets can be stabilised by a relatively small reduction of one to two per cent in volumes.

According to the study, a European monitoring agency with generally binding powers would enable the market’s price signals to be transmitted swiftly and effectively to the milk producers. The flexible adjustment of the milk production volume could strengthen the balance in the market and achieve stable prices within a target price bracket on an average cost-covering level. Thus the monitoring agency would be a realistic way of securing milk production throughout the EU and maintaining a vital branch of the economy, especially in disadvantaged areas and mountain regions.

Details of the results and conclusions can be read in both the short and long version of the study. It can be downloaded from the European Milk Board’s website at: http://www.europeanmilkboard.org/emb/positions.html

Christian Schnier (EMB)