The Federal Board of the German small farmers' association AbL has called on Agriculture Minister Julia Klöckner to quickly convene an Agriculture Summit that would include the entire agriculture and food sector, from farmers to processors and even traders.

All stakeholders should discuss and adopt quick, non-bureaucratic joint aid measures that go beyond financial support. "In this precarious situation of numerous farms affected by drought, our market partners like dairies, abattoirs and food-grain traders, as well as us farmers must assume responsibility. An existential crisis can only be alleviated by a quick and fair increase in producer prices," say Martin Schulz, farmer from Wendland, and Ottmar Ilchmann, farmer from East Frisia, in a position paper.

The AbL spokespersons continue: "We farmers have been left alone to deal with this difficult situation. It is common in all other sectors for the cost of low output and increased inputs to be passed on to buyers as part of the selling price. Therefore, the AbL is specifically calling on cooperative sellers to clearly communicate the situation faced by farmers to their purchasers in processing and trade, and to demand higher prices. The current milk price of about 32 cents per kilogram is financially no longer sustainable. State aid such as tax breaks and early subsidy payments are but a flash in the pan. Fair producer prices that remunerate the true effort of producing milk and compensate for lower output are the only way to bring real stability to farms."

"Furthermore, it is ethically unacceptable that beef cattle must go hungry or even be slaughtered early while potential feed like maize and grass silage is diverted and wherever possible, also bought in in direct competition with cattle breeders," comment the AbL spokespersons. "We must also show solidarity with colleagues. Farms with surplus feed should divert it to farms facing shortages. It is also possible that organic farms might be forced to slaughter more animals due to caps on bought-in feed. We need temporary, non-bureaucratic derogations that would not burden farms with additional application fees."

The AbL spokespersons also add: "While effective fertilizer legislation is a must, there must be at least some attempt at derogations due to the extreme weather conditions. The meagre harvest and the difficulty in growing catch crops would thus mean that the use of fertilizers would be unauthorised and slurry storage facilities overflowing next winter as well would become probable. This and other problems, together with possible solutions for the same cannot be addressed after the harvest work has been done and the results have been evaluated – by then many small-scale farmers will have been driven out of existence. The situation is becoming more and more acute every day. We need action now!"

Excerpt from the press release of the German small farmers' association AbL on 24 July 2018

The European Commission aims at strengthening the position of farmers and has therefore presented a draft directive in mid-April to ban unfair trading practices in the food supply chain. These practices include, for example, short-term cancellations, unilateral or retroactive contract changes and payments for unsold goods.

The aim of the legislative proposal is to establish minimum standards to tackle unfair trading practices among micro, small and medium-sized enterprises (SMEs). In future, EU member states should be able to clarify violations of good trading practices and impose penalties on the food trade.

So far, there are no EU-wide rules on how to deal with unfair trading practices and the existing voluntary approaches have proved ineffective.

How far is the dossier?

The legislative proposal is currently under discussion at the European Parliament and the Council of Ministers. Socialist MEP Paolo De Castro (Italy) is rapporteur within the European Parliament's Committee on Agriculture. In his report, De Castro proposed, among others, an extension of the scope of the directive to cover all companies in the food chain. The report, for which many amendments were tabled by MEPs, will be voted first by the Parliament's Committee on Agriculture in October and then by the plenary as a whole. The Austrian EU Presidency has made unfair trading practices a priority.

Position of the EMB

For the EMB, the European Commission's legislative proposal is a first step towards greater fairness in the food chain. Unfair trading practices weaken the position of milk producers and destabilise the European dairy sector. In our position paper, we have highlighted important aspects which milk producers believe must be incorporated into EU legislation:

• Legislation must also pertain to the relations between producers (sellers) and dairy co-operatives (buyers);

• Production costs must become the basis for pricing in contracts and/or business relations between buyers and sellers;

• In addition to fines, further constructive punitive or compensation measures should be made possible;

Here you can find our position on unfair trading practices in detail

Regina Reiterer, EMB

Commission Proposal for a Directive on unfair trading practices in business-to-business relationships in the food supply chain: COM (2018) 173

European Parliament draft report, rapporteur Paolo De Castro, 2018/0082(COD)

In a joint statement, the French association platform "Pour une autre PAC" (For another EU Common Agricultural Policy) and the German platform of 17 associations for environmental and nature conservation, agriculture, development policy, consumer protection and animal protection, address the German Agriculture Minister Julia Klöckner and French Minister Stéphane Travert.

The alliance fears that inadequate requirements at EU level will lead to an undercutting and thus race-to-the-bottom by the member states. High EU-wide minimum standards are therefore necessary so that the targets agreed in EU directives and the strategies for environmental, nature, climate and animal protection as well as for fair incomes of farmers, can be achieved. The associations call not only for a ban on deterioration of the status quo, but also for a commitment to significant improvement in all Member States.

The alliance calls on Minister Klöckner and Minister Travert to support such EU-wide binding and ambitious environmental and social targets for all funding and CAP measures. Farmers should be given funding for specific services related to their production operations, for environmental, nature and climate protection and animal welfare. Therefore, both ministers should strongly support the prevention of the Commission's proposed reduction of EU funds for agri-environmental programmes, organic farming, naturally disadvantaged areas, nature conservation and rural development (Pillar 2). Secondly, the new instrument of environmental measures financed by direct payments (the eco-scheme) should also be binding and used as remuneration for specific services in all Member States, comprising a substantial proportion of the budget (minimum budgets also in the first pillar).

The EU Commission intends to require all member states to promote risk management. The alliance rejects the idea that insurance premiums from farms are financed with EU agricultural funds. Rather, the primary task of the CAP should be to minimise risks, for example through incentives for diverse value creation (diversification), measures for climate protection, increasing soil fertility and biodiversity.

The alliance calls for more binding targets for the first hectare surcharge in order to really boost small and medium-sized farms in the development of agricultural work. The Commission's proposal on degression and capping, taking labour costs into account, is welcomed in principle by the alliance, but they call for important changes to the concrete design so that the instrument can have the desired effects.

In order to prevent market crises that threaten the existence of the sector, the associations call for direct intervention at EU level, including temporary measures to limit the volume. Last but not least, the associations call for clear regulations in the CAP to prevent negative effects of EU exports and imports on regional and local markets, the environment and income potential in the Global South, among other things. Both in the area of financial assistance and market regulation, an assertive position at EU level is needed to enable farmers and rural communities in Europe to have fair economic prospects in line with environmental, nature and climate protection.

Aurélie Catallo, Plateforme Pour une autre PAC and Ulrich Jasper, German Platform on CAP

Bavarian dairy farmer tending to holy cows in India

German milk producer Johannes Pfaller joined the EMB Executive Committee in mid-April 2018 and at 37 years, is its youngest member. The dairy farmer from southern Germany is also active within the German dairy farmer's association BDM as Chairman of the Advisory Board.

Johannes Pfaller runs a farm in Bavaria that is home to 130 dairy cows and also raises young cattle. His operation encompasses 40ha of pastures and 80ha of agricultural land. He took over the farm, which is documented to have existed since the beginning of the 18th century, from his father 8 years ago. The farm also has one employee who milks at the farm 6 days a week. The harvesting work is carried out by a subcontractor. Pfaller has a Masters in agriculture and has also studied agricultural farm management.

"The EMB unites Europe's dairy farmers and is, in this way, unique"

I have been the Chairman of the Advisory Board of the German dairy farmers' association BDM for the last eight years. I decided to become an active part of the EMB Executive Committee because I believe the international aspect is very important. The EMB unites Europe's dairy farmers and is, in this way, unique. It is definitely a point of pride for me to be able to contribute to it in some way. I am sure that the main difference as compared to being on the Advisory Board back home in Germany is that at European level, you have to try to cover a range of issues and perspectives from different countries. I think that it is a big advantage to have a broad presence here in Brussels. However, I am also aware that in terms of resources, it is anything but easy to work on this entire range of issues.

National associations can do a lot, but EU policy is eventually determined in Brussels. I therefore believe that the EMB is incredibly important and I am convinced that founding this European platform has been us dairy farmers’ greatest achievement. My personal goal as an Executive Committee member is to expand this platform further and to work toward fair milk prices and a healthy milk market. In essence, European dairy farmers from France to Lithuania have the same needs and goals. It is important to work together and move forward at European level.

"By participating in development aid, I am the one who gained the most"

It was always important for me to see a bit of the world. In addition to an internship in the US, which was personally very enriching for me, my stays in other countries have also been a source of amazing experiences, like when I took care of holy cows in an ashram in South India. I have travelled as a farmer and development aid worker to help farmers in Romania, Africa and India. In the end, I am the one who gained the most.

In 2016, I travelled to Burkina Faso with the EMB to understand how EU export policy was affecting West African milk producers. When you see the consequences of milk powder exports from European overproduction in Africa with your own eyes, you start to question the system itself. It is important for me to work together with the EMB to reinstate the balance on the dairy market and to get EU policy-makers to shoulder their responsibility.

"Farming is not a profession, it’s a calling"

I am a dairy farmer in heart and soul. I truly value being able to work freely and independently with my animals outdoors. Farming is not a profession, it’s a calling. Of course, there are drawbacks to this sector, like the tense economic situation, the current extreme climatic conditions or even the belief that you have to be available on the farm all the time. The possibility of being substituted on the farm is important to me and that means that the necessary economic conditions must be created. That is where EU policy comes into play: The demand for cost-covering prices comes first and foremost in ensuring that our work is appropriately remunerated. If there is security on the economic front, there will be no problem in achieving generational renewal in the sector.

Mr Pfaller, thank you for the interview and wishing you all the best in your work within the EMB Executive Committee!

Regina Reiterer, EMB