On 23 July, the EMB, in conjunction with the Swiss member organisation BIG-M, held a press conference outside the European Parliament in Brussels on the abolition of the milk quota system. They presented a recent Swiss study of developments in the Swiss milk market.

The core statement of the study is: five years after the quota system was abolished, producers still have no stable market conditions in the long run.

A further consequence of the abolition of the Swiss quota system in 2009 has been the increasing pressure on farm-gate prices. By 2010/12, Swiss milk intended for the dairy industry had lost about 24% of its value compared to the average farm-gate price in 2000/02 because of increases in volumes resulting from the abolition of quotas. Cheese dairy milk lost 15% of its value, and organic milk 19%.

Another consequence, according to the Swiss study, is a greater market concentration of processors as opposed to producers, further exacerbating the farmers’ position in the market. Between 2003 and 2012, the four largest milk processors increased their processing volume by 38% and their share in the Swiss milk market from 44% to 56%.

And the distribution of the growth in volumes has worked out badly for the entire Swiss milk market since the abolition of quotas. There has been a concentration primarily in the cheap segments butter and milk powder, which can often only be exported at a loss.

What this development has meant in practice for Switzerland is that the continuing poor prices have forced many farmers out of milk production – including those who actually had good farm structures. Farms continue to close, with a direct impact on the regions and the cultural landscape.

Conclusions about developments in the EU after the abolition of quotas in 2015

The study’s findings indicate potential developments in the EU milk market when quotas end in 2015.

There are clear parallels with the Swiss situation, and the fear is that European producers will be left to their own devices. Cost-covering prices and stabilising crisis instruments are therefore crucial to securing milk production in the long run.

Policy-makers are called on to learn from the Swiss developments. In the next few weeks the EMB will be discussing the results of the Swiss study with the decision-making institutions in Brussels (the European Commission, the European Parliament Committee on Agriculture) and on a national level.

For the complete study and a summary follow this link: http://www.europeanmilkboard.org/en/emb/studien.html

The study was drawn up by Dr. Therese Haller from the Bern University of Applied Sciences’ School of Agricultural, Forest and Food Sciences.

Regina Reiterer, EMB

At a press conference on 25 July in Libramont, Belgium, Belgian farmers announced the formation of the WAllonia FArmers Board (WAFAB). The aim of this move is to improve the Wallonian producers’ market position which, as throughout Europe, is chronically weak.

The milk producers are unable to defend their interests properly and do not have a counter-power worthy of that name. For the Wallonian producers it is of primary importance to unite in a single structure set up to defend their interests.

The tasks of the WAFAB

The non-profit-making association’s stated role is to ensure sustainable agricultural production in Wallonia, operate as a monitoring board of the agricultural market, keeping an eye on the development of supply and on farm-gate prices, and represent the producers’ interests in dealings with the buyers of their products. The organisation also aims to optimise production costs by operating as a purchasing association for the means of agricultural production. It is further to commission studies on, for instance, innovative production methods and on the market development.

In the formation of the WAFAB the European Milk Board (EMB) sees an important means of strengthening the farmers. In other countries, too, like France and Germany with the France Milk Board and the MEG Milch Board, there are already producer organisations helping to strengthen the producers’ position in the market.

It is now up to the producers to take this opportunity and join the WAFAB. The bigger the number of farmers joining in, the stronger the WAFAB can be in representing them.

Regina Reiterer, EMB

Here are the headlines from Brussels:

Italy takes over presidency of the EU (1 July - 31 December)

On 1 July Italy took over the presidency of the EU from Greece, stating that its priorities until the end of the year would be: organic farming reform, implementing provisions for school milk and fruit, wine-growing reform, revising legislation on seeds, crop protection and animal welfare.

EU dairy farms report 2013: producer margins extremely volatile

On 3 July the European Commission published the “EU dairy farms report 2013”. According to the report, the last five years have featured huge differences in milk producer margins, both year-on-year and quarterly.

The report rates 2010 and 2011 as having been positive for specialised dairy farms. On average, EU-27 producers achieved higher Net Value Added per Annual Work Unit than in 2007. This was, the report says, due to better gross margins and a significant increase in milk production.

The full report can be viewed at: http://ec.europa.eu/agriculture/newsroom/167_en.htm

Agriculture Council (14 July, Brussels): fat correction failed

The members of the Agriculture Council were unable to agree on an adjustment to fat correction and the introduction of additional crisis instruments. The aim of some states, including Austria, Germany and the Netherlands, was to use fat correction to prevent the super-levy being paid in full. They wanted punitive payments arising from oversupply to be reduced in this way.

Eleven countries (France, Great Britain, Portugal, Hungary, Bulgaria, Cyprus, Romania, Croatia, Slovenia, Slovakia and the Czech Republic) prevented a qualified agreement.

6^th round of TTIP negotiations (14 – 18 July)

The EU and the USA are still negotiating in Brussels the creation of the biggest free trade zone in the world. In the 6^th round of talks for a comprehensive agreement (TTIP) one of the focuses is on market access.

The major issues of the TTIP are eliminating customs duties and other trade barriers. This week they discussed agriculture.

Consumer and environmental protection groups fear that European standards could be lowered. The European Commission, negotiating on behalf of the member states, has rejected these accusations repeatedly. The next round is scheduled for September.

EU Commissioner for Agriculture – Ciolos’ term of office

Three prominent members of the Committee for Agriculture have questioned Dacian Ciolos’ suitability as EU Commissioner for Agriculture and an extension of his term of office. Albert Deß (EPP), Paolo de Castro (S&D) and James Nicholson (ECR) criticise the Commissioner’s current policy in a letter to the newly elected President of the Commission Jean-Claude Juncker, talking of “a big step backwards in the agricultural policy in the last five years”. Inside the Commission, Dacian Ciolos is regarded as the favourite for the post of EU Commissioner for Agriculture, but he could still face competition from Italy (Paolo de Castro) or Ireland (Phil Hogan).

Regina Reiterer, EMB