Come join us on a picture journey with Fairebel and meet the people – farmers, Fairebel supporters and consumers – who make fair milk possible in Belgium.

The anniversary of the Di Fair Milch Säuliamt regional project was an occasion for many media outlets to report on it. Everyone was impressed by our performance figures. “Why does this project not exist for Switzerland as a whole?”, that is a question that came up again and again.

With 18 organisations from 14 countries, the EMB’s first Members' Assembly this year in Brussels attracted a strong turnout. The discussions among the member organisations were further enriched by exchanges with guest speakers from the retail sector and from the organisation European Coordination Via Campesina (ECVC). During the two days of the assembly held at the end of June, the situation on the international dairy market was analysed and constructive projects, ideas and possible cooperation initiatives were discussed.

Prices are sinking again and it is often surprising how quickly things can change, especially when it comes to supermarkets. For example, let’s look at butter: a well-known supermarket chain is attempting to attract customers with their rock-bottom bargain price of 1.59 euros for a pack of butter. Competitors are also following this trend: 1.49 euros as of today. Retail chains permanently rely on price reductions for milk products when it comes to advertising. The price for butter at the end of last year was almost a euro higher. This doesn’t just happen by chance. It calls for a thorough analysis and understanding of such price fluctuations as well as a careful monitoring of the market and an evaluation of the underlying factors.

The conference organised by the Federal Ministry for Food and Agriculture on 31 August in Berlin concluded with the first indications from the ministry in favour of strengthening dairy farming. The BDM engaged actively in discussions with representatives from the dairy industry, research, NGOs, trade and with farmers themselves. We also expressed our criticism of agricultural policy to date with an action in front of the conference venue, and presented our expectations of this conference by publishing an eight-point position paper.

Sweden's dairy farmers have been making waves in recent months, tackling head-on the pressing issues facing their industry. The nation’s food chain has come under the scrutinizing gaze of Swedish authorities, eliciting our active participation to help shed light on the challenges we are facing.

A few months ago, Danish daily Avisen Danmark ignited controversy with a report suggesting that despite the apparent cessation of cattle exports to Russia, Danish cows might still be reaching Russian soil, albeit through a detour via Hungary. To this day, the suspicions persist.

In 2021, Spanish law makers introduced a novelty to stop the destruction of value in the food chain. The Spanish agricultural organisation COAG (Coordinadora de Organizaciones de Agricultores y Ganaderos) gives us an overview.

The main cultural shift introduced by the recent amendment to the Act of 2021 is the concept of paying above the cost of production to avoid the destruction of value in the food chain. This aspect has been extensively demanded by organisations representing producers and it is a key factor for the sustainability of the European model of agricultural production. Amending the trade behaviour in the chain is obviously no easy task, but a necessary one for the future of agriculture and livestock farming in the European Union, along with many other measures that must be taken in this regard.

In particular, the Act specifies that the price set in the supply contract which has to be paid to a primary producer or a group of primary producers must always be higher than the total costs borne by the producer or the actual cost of production. This definition includes all costs borne to develop their professional activity. The following items can be taken into account, inter alia: the cost of seeds and plants, fertilisers, plant protection, pesticides, fuel and energy, machinery, repairs, irrigation, animal feed, veterinary fees, amortisations, interest on loans and financial products, agricultural contractors and manpower, work done either by employees or the producers themselves or by members of their family unit.

The production costs borne by each operator along the chain, not just the producers, are worked out individually and specifically. There is no one-size-fits-all or general definition of the costs per sector, per production field or per link in the chain, be it from either a public body or a private entity.

This is a clear progress, albeit it has not been possible to turn the tables immediately. Nevertheless, the foundations have been laid to reach this ambition. The mere fact that the buyers have started to consider that the producers they are buying from incur a number of costs that make up the purchase price is a breakthrough. Until recently, this matter was not considered in the agreed price, but was neglected in the food chain’s trade negotiations and relations. Moreover, this tool enables bargaining, up to a certain point, and whistleblowing by the producer in the event of a breach by the buyer.

The supervisory authorities both on a state level (AICA) and in the autonomous communities (CCAA) carry out inspections within their remit, both ex officio and in response to reports, leading to cases being opened to punish failure to comply with the prohibition of value destruction in the chain. In the first half of 2022 alone, for instance, eight claims involving retailers were filed on grounds of value destruction in the dairy chain.

Moreover, the prohibition of value destruction applies to every link in the food chain: each operator must pay the upstream operator immediately preceding it a price equal to or above the production cost borne. In addition, the sale at a loss at the last stage in the chain, i.e. to consumers, is forbidden, so that retailers will not be able to either offer or sell food products at a price below the one paid to purchase them. Failure to comply with this ban introduced by the Act can be subject to an administrative penalty imposed by either AICA or the CCAA, each within its sphere of responsibility.

In the current market context and as intervention measures have mostly disappeared from the EU public policies, these paradigm shifts have become necessary and must be applied throughout the European single market, through national policies and amendments to EU regulations.

Alvaro Areta García, Technical Officer, Coordinadora de Organizaciones de Agricultores y Ganaderos (COAG), October/November 2023

Fair prices and a stable situation for producers are preconditions for the successful implementation of the Green Deal. This means that it is necessary to equip the market with instruments that would stop and reverse the current destabilising trend and would create a functioning framework for the Green Deal, which has, until now, existed in a vacuum.