The European Dairy Association (EDA) has urged MEPs to reconsider their support for the introduction of a milk supply management system in times of crisis – a move it claims will create a “less profitable environment” for producers and processors.
Last week, a plenary session of the European Parliament agreed on a mandate for negotiations on amendments to the Common Agricultural Policy (CAP).
Among its decisions was one to support to introduction of a milk supply management system in times of crisis. The system would require suppliers who had increased their production to pay a penalty, while aid would be paid to those who had cut production.
This position will be used as a basis for negotiations with the European Council and the European Commission (EC) to determine the final outcome of the CAP reform.
Speaking with DairyReporter.com, EDA secretary general, Dr Joop Kleibeuker, urged Brussels to reconsider its position on the supply management system - a tool he previously described as a “backwards step.”
“Less profitable” milk supply chain
“We have one main concern – the implementation of a supply management system in times of crisis,” said Kleibeuker. “We think that such a system will not work.
According to Kleibeuker, dairy farmers and processors could find their income decrease if the system is included as an amendment in the CAP reform.
“Introducing a milk supply management system at time of crisis will not work to the advantage of European milk supply players – not farms, not processors, not consumers,” he said.
“The European dairy industry has invested a lot of money over the last 10 years in preparation for this free market. This supply management system would interfere and result in a less profitable environment for everyone along the milk supply chain.”
“The European Parliament has gone in the wrong direction,” Kleibeuker added. “We hope that they will reconsider the position taken by the European Parliament.”
System a “retrograde step”
The National Farmers Union (NFU), which represents the interests of British farmers, has also voiced concerns over MEP support for the introduction of a supply management system.
“The industry has worked for many years on the basis that milk quotas would end and the sector would be free to respond to market demands,” said NFU deputy president, Meurig Raymond.
“Introducing a measure, which would penalise farmers who had increased production while granting an aid to those who had cut production, is a retrograde step,” he added.
The European Milk Board (EMB), which lobbies on behalf of European milk producers, has meanwhile heralded the MEP support for the system as a “step in the right direction.”
“Through the adoption of the system of voluntary production cuts, in spite of the all the resistance from different sides, a step in the right direction was taken. We now have to make sure we continue this way with the objective of a permanent regulation of the EU milk market that goes beyond mere crisis instruments,” said European Milk Board president, Romuald Schaber.
Three-way negotiations between the European Parliament, the European Council, and the EC are expected to begin in late March or early April 2013.