Dear Mr Hansen,
Europe is on the brink of another potentially devastating crisis in the dairy sector. In many Member States, milk producers are currently witnessing a sharp and accelerating drop in prices. Numerous farms – especially family farms – now face immediate threats to their existence.

The German Fair Milk brand, Die Faire Milch, is considered a pioneer in milk production and the German dairy sector as it places regional milk products and sustainability at the heart of their model. The latest edition of their newsletter provides fascinating insights into the Berlin International Green Week as well as the awards ceremony recognising “regional stars”. Here are some of the highlights.

Alongside several Walloon and European agricultural organisations, MIG is taking a firm stance against the free-trade agreement between the European Union and the Mercosur countries. This agreement poses a direct threat to agriculture, the environment and food security in Europe by nullifying all sustainability efforts.

EMB statement: “We have to talk about cooperatives! What cooperatives are – what they are not – and what they pretend to be!”
With the planned merger of Arla Foods and the DMK Group and an estimated combined pro forma revenue of 19 billion euros, a new cooperative giant will soon be on the market.

EMB President Kjartan Poulsen, himself an Arla member, sees this as yet another step in the move towards ever larger, highly branched structures, which is all too familiar in the sector. As a result, and for a long time now, cooperatives have ceased to be the representatives of producer interests they claim to be on paper: “Cooperatives have a positive ring to them in the public perception: structures based on community, democracy and solidarity. They are seen as a counter-model to profit-oriented corporations and as economic support for farmers. But this image needs an urgent update – especially because cooperatives in their current form neither live up to their responsibility nor to their self-proclaimed standards”, says Poulsen.

1. What are cooperatives in theory?

At their core, cooperatives are associations of people with common economic interests. Members make a financial contribution and, at the same time, should be able to participate democratically. The primary goal is to support the economic situation of members, not profit maximisation.

2. What cooperatives are not

Cooperatives are not mere service providers or corporations. Their role is not to simply buy raw materials cheaply and process them profitably – they must act in the interest of their members. They are not an end in themselves. But this is exactly where the problem begins.

3. The third category: what cooperatives pretend to be – to evade obligations

Cooperatives like to present themselves as democratic, solidarity-based stakeholders to evade several legal and political obligations. For example: mandatory contracts between agricultural producers and processors are currently being discussed at EU level – an instrument for creating fair and transparent price structures. Cooperatives regularly demand exceptions to this obligation. Cooperative members are also denied a better position in negotiations as they cannot be represented by producer organisations. Cooperatives present the following reasoning: as they are a community of producers, there is no need for additional regulations here.

But this does not correspond to reality.

⇒ Reality: membership without power

The actual balance of power in many cooperatives is asymmetrical. Individual members have neither the legal or economic knowledge nor the time or structural resources to really shape decision-making processes. Many cooperatives have become very large and highly branched over time and are not run by members, but by a management team. Members are often only involved via representative assemblies. Crucial lines of business – such as marketing – are often outsourced, making control even more difficult. The possibility for the member base to exert influence is minimal. In addition, there is economic dependence: many farmers are dependent on their cooperative as a buyer – criticism threatens their livelihood. This leads to a systematic weakening of democracy within cooperatives. What remains is a façade of democratic participation – not a lived reality.

⇒ Contradiction in the business model

A particularly clear conflict of interest is evident in the dairy sector. Cooperative dairies act on the market as processors and sellers. Their interest is therefore in procuring the cheapest possible raw materials – i.e. low milk prices. At the same time, they should be fighting for good producer prices in the interest of their members. These goals are fundamentally contradictory. If cooperatives act as market players, they must also be treated and regulated as such.

Cooperatives cover large market shares – in many places they are the main buyer. The new cooperative giant that Arla and DMK are currently creating is a prime example of this. So, if cooperatives are exempted from contractual obligations, this means that a large part of the market and thus the problem is not covered. Fair prices and transparent contracts remain an illusion – at the expense of producers.

⇒ What are cooperatives afraid of?

Why do cooperatives resist clear rules that are supposed to promote fairness and transparency? Perhaps because they would then have to disclose that their role as supposed representatives of members’ interests has long since been undermined. The fear lies in the disclosure of a power imbalance that contradicts the cooperative ideal. “We have to talk about cooperatives – openly, honestly and without ideological blinkers. They are important players, but not saints. Anyone who behaves like a company must also be treated like one. This is especially true when it comes to fair prices, market transparency and political responsibility”, says Kjartan Poulsen.

In concrete terms, this means: 

• The obligation to conclude contracts between producers and buyers, which has currently been put on the table by the European Commission, must apply to cooperatives in the same way as to any other processor.

• Cooperative members must have the possibility to be represented by producer organisations in negotiations with processors.

• The size thresholds for these producer organisations must be increased to keep up with market shares of processors. Currently, such organisations are restricted to 4% of the EU market and 33% of national volumes. It should be increased to 30% for the EU and pooling limits should be abolished altogether at national level, to make it possible to negotiate with processors on an equal footing.

For detailed information on the development of cooperatives, see also Cooperatives – Between Myth and Reality. 

EMB press release of 9 April 2025

The Faireswiss cooperative markets Fair Milk in Switzerland that makes it possible to pay 1 Swiss franc per litre to its dairy farmers.

The milk price is currently acceptable for most Swedish producers. A few dairies are unable to match the price offered by the market leader, but there is a general hope among farmers that milk prices will at least remain at their current level.

On 20 March 2025, a solemn event in Memmingen looked back at something that took place 500 years ago at this very place: the adoption of the “Twelve Articles” by the so-called “Peasants’ Parliament” of 1525, a ground-breaking document of farmer self-determination and a milestone on the long road to freedom, equality and human rights.

The Irish dairy sector has seen a positive first half of 2025. Weather has been pleasant, with cows able to get to pasture early, and grass growth has been strong over the course of the first six months. Rain has been moderate with a really dry May followed by a much-needed wet spell in June, hence the growth in pastures has been above and beyond 2024 levels.

In early September, the Agriculture Committee of the European Parliament adopted a draft opinion on the proposals tabled by the European Commission to amend the Common Market Organisation (CMO). The German family farmers’ association AbL especially welcomes the proposed changes to rules that require mandatory written contracts as they would strengthen the position of farmers in negotiations for fair producer prices.

“Die faire Milch” Germany and Boris Gondouin in charge of Fair Milk at the European Milk Board opened this year’s European Fair Milk Conference in Dortmund with a warm welcome. It was a cordial reunion of friends and partners who jointly emphasised the importance of farmers mutually strengthening each other in Europe: “Today, we are celebrating not only Fair Milk, but also our cohesion without which there can’t be any future for our farms”, says Boris Gondouin.

Denmark has introduced mandatory feed-based measures for larger dairy herds in order to curb climate emissions from cows. Turning policy into practice is a real-world test – technically speaking, in rations and routines, and politically across the sector as costs, logistics and acceptance are widely debated.

Dairy farmers from across Europe met for the European Milk Board (EMB) General Assembly on 19 and 20 November in Brussels. The high attendance clearly shows that the situation on the dairy market is dire – and coordination across borders is more important than ever before. The milk producers call for EU-wide activation of the voluntary production volume reduction scheme.