World demand for dairy products has fallen over the past year and milk producer prices have plummeted. The Commission has responded to the crisis with additional funding and the reintroduction of export subsidies.
New proposals planned
French news agency AFP said that Minister Bruno Le Maire is preparing to announce additional proposals to help the struggling dairy sector.
Le Maire told attendees of a farm fair in Chalons-en-Champagne: “We are determined to build with Germany a new European regulation for the dairy market.”
But the agriculture minister ruled out a return to milk quotas or fixed prices, which farmers had been called for during protests this summer.
Commissioner speaks out
During a speech to the agriculture committee of the European Parliament yesterday, agriculture commissioner Mariann Fisher Boel also dismissed any possibility that the decision to abolish quota in 2015 would be revoked.
Boel said: “A heavy-handed ‘central planning’ of the milk quota system won’t give us a responsive, well structured dairy sector.
“It would hold back efficiency, raise production costs and make it harder for young farmers to enter the sector.”
Boel said she had lost a lot of sleep over the current state of the dairy sector and underlined the need for compassion and action that is effective now and in years to come.
She said milk quotas would not the right long term solution. Although the Commission has refused to budge on milk quotas Boel said it has not been afraid to take action.
As an example, she said: “In calendar year 2009, additional spending on export refunds and intervention for the dairy sector (due to the crisis) will be about €600m.”
Beyond market measures Boel said she was interested in what is happening in the relationship between dairy farmers and the rest of the supply chain.
“Whereas producer prices for dairy products have plunged below where they were before the price spike of 2007, consumer prices are still 14 per cent higher than they were at that time,” added the commissioner.
Boel said she is looking forward to presenting the Commission’s analysis of this supply chain issue at the end of the year.