Put an end to crisis, crashes and catastrophes

The EMB’s proposals for reforming the EU agricultural policy and for solving the milk market crises

 Ten years ago – in 2009 – the pictures of French and Belgian dairy farmers dumping several millions of litres of milk onto fields went around the world. Their anger and great concern about the disastrous milk prices and the lack of action on the part of EU policy-makers brought milk producers onto the barricades. Today – ten years later – the milk market still lacks efficient mechanisms for making the sector crisis-proof. For the European Milk Board (EMB), a functioning crisis instrument is indispensable for putting the milk sector on a healthy foundation. At a press conference at this year’s International Green Week in Berlin, the Executive Committee of the European milk producers’ umbrella organisation pleaded for the “Market Responsibility Programme” – an instrument that cushions gross slumps in milk prices, thus countering crises preventively.

 Are there ways out of the endless loop of crises?
Since crisis year 2009, Europe’s milk producers have moved from one crisis to the next. The years 2012 and 2016 were characterised by low farm-gate milk prices and large losses for milk producers. In recent years, the endless loop of crises has brought an entire profession to its knees.
With the volume reduction programme, the EU Commission implemented in the crisis year 2016 a long-standing demand of the European Milk Board (EMB), which enabled milk prices to rise again and showed what successful crisis management can look like. However, a regular crisis instrument that can predict and avoid chronic crises is still lacking.

Proposals for a crisis-proof milk market are also coming from the European Parliament, where numerous Members are calling for regulation instruments or even a compulsory reduction in the event of surplus volumes. The Committee of the Regions (CoR) – an advisory body of the EU – is postulating demands for a balanced milk market (incl. articles of law on reducing volumes in the case of market imbalance, improving the Milk Market Observatory MMO). These measures must finally be implemented in the reform of the Common Agricultural Policy.
 
Without an efficient crisis instrument, crises and crashes are still on the agenda
For Erwin Schöpges, President of the EMB and active dairy farmer in Eastern Belgium, the year has already started more than unsteadily with milk prices below 30 cents per kilogramme of milk. “What we wish for the new year are cost-covering prices and a fair income – no more and no less”, is how Schöpges sums up his concerns about the EU policy.
 
The constant crises are frightening mainly young farmers from taking over dairy farms. Schöpges continues: “When you hear that only 5% of producers in the EU are younger than 35, that paints a bleak picture for the rural regions and for society”. In the Netherlands, which are always presented as "cost-efficient and competitive", the share is even as low as 1.5 percent.

The fact that dairy farmers are severely underpaid is evidenced by the study “What is the cost of producing milk?” by the German Büro für Agrarsoziologie und Landwirtschaft (BAL, Bureau for Rural Sociology and Agriculture). According to Boris Gondouin, French member of the EMB Executive Committee, European dairy farmers are still in a crisis mode, which is slowly wearing their farms down. “In normal times we need adequate prices to enable us to cope better with extreme situations, either in terms of exceptional climate or in geopolitical circumstances”, Gondouin emphasises.

The European Milk Board wants to have the Market Responsibility Programme (MRP) enshrined in law to counter the chronic shortfall of costs. This programme observes the market and reacts to looming crises by temporarily adjusting production. “We milk producers are in a position to take responsibility for the market, and can react promptly to market signals”, explains Stefan Mann, dairy farmer from Germany and Chairman of the German dairy farmers' association BDM (Bundesverband Deutscher Milchviehhalter). The Market Responsibility Programme, he says, must now be installed as a permanent instrument and the reform of the Common Agricultural Policy offers an opportunity for this. Potential market disruptions caused by Brexit or the Mercosur agreement are already beginning to emerge.