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16 EU countries back new milk regulation

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Published 08 September 2009

A Franco-German initiative on a new regulation to help hard-hit milk producers was backed yesterday (7 September) by sixteen of the 27 EU member states, paving the way for possible re-regulation of the milk market. 

In a joint declaration, 16 countries argue that a new European milk regulation is necessary to complement a phase-out of milk quotas between 2010 and 2015 so that farmers are not left at the mercy of the market.

The Franco-German initiative for more EU action to protect dairy farmers is supported by Austria, Belgium, Bulgaria, Estonia, Finland, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Portugal, Romania, Slovakia and Slovenia. 

It suggests temporarily increasing the minimum EU intervention price at which the EU would commit to buying surpluses from farmers. It also proposes that national governments help farmers more without asking for the green light from Brussels.

Going further, the countries suggest setting a minimum price for milk at national level between producers and industry. 

French Farm Minister Bruno Le Maire noted that this type of "contractualisation" at EU level between producers of agricultural commodities and industry was not currently possible. 

However, he believed that France and Germany are starting to shake the conventional parameters and that contractualisation would be something that could be done in the "months to come".

Indeed, he believes that contractualisation is the "way forward" for the whole agricultural sector, and not just for milk. 

Le Maire insisted that more regulation is the only way to guarantee a reliable and steady income for farmers, and consequently ensure food security in Europe. 

In a complementary declaration, Germany, Austria, France, Hungary, Portugal and Slovakia asked the Commission to temporarily suspend the planned phase-out of milk quotas. But the Commission has repeatedly refused to reconsider the issue. 

Positions: 

Pekka Pesonen, secretary-general of farmers' and co-operatives' lobby Copa-Cogeca, said that strong measures were needed immediately to support the milk market. "Exceptional situations need exceptional measures," he said.

He welcomed the joint declaration without "signing everything". 

"We are happy that there is an attempt to find new solutions to the crisis," he said, but insisted that the priority should be given to more public intervention and that export refunds on dairy produce need to be geared up. 

He also regretted that the ministers failed to properly address "farmers' minimal share in the food chain". 

Pesonen said the idea of contractualisation should be further examined. 

Background: 

In November 2008, EU agriculture ministers agreed upon a Health Check of the Common Agricultural Policy (EurActiv 20/11/08). 

Regarding the dairy market, they agreed on a gradual 1% yearly increase in milk quotas to provide a 'soft landing' for the sector before the quotas are abolished altogether as of 2015. 

However, European farmers have stepped up protests in recent months over the drop in dairy prices, warning governments that they will face bankruptcy unless urgent market intervention measures were taken.  

Dairy product prices have collapsed due to low demand amid the financial and economic crisis. According to EU farmers, milk prices have fallen by 40% recently, "plummeting to the same level as 1992".

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