Report on the dairy market and the "Milk Package"
16 Jun 2014 12:23 PM
The European Commission
has published a report on the development of the dairy market situation and the
operation of the 2012 "Milk Package".
Commissioner for Agriculture and
Rural Development Dacian Cioloş said: "Since 2010, the European
Commission has been following very closely the milk sector to ensure a smooth
transition toward the end of the quota in 2015. This report confirms the
positive trend for the world dairy markets but also the necessity to continue
working on the best ways to tackle the challenge of price volatility in the
future".
The so-called "Milk
Package", adopted under co-decision in 2012, aims at strengthening the
position of dairy producers in the dairy supply chain and preparing the sector
for a more market-oriented and sustainable future, seeking in particular to
learn lessons from the 2009 dairy market crisis. Member States have the option
to make written contracts between milk producers and processors compulsory.
Farmers have the possibility to negotiate contract terms including the price of
raw milk collectively via producer organisations. Specific EU rules for
inter-branch organisations allow actors in the dairy supply chain to dialogue
and to carry out a number of activities, and Member States are allowed, under
certain conditions, to apply rules to regulate the supply of PDO/PGI
cheeses.
The report confirms that
contracts between farmers and processors have been made compulsory in 12 Member
States (Bulgaria, Croatia, Cyprus, France, Hungary, Italy, Latvia, Lithuania,
Portugal, Romania, Slovakia and Spain), while in some others (Belgium, United
Kingdom), codes of good practice have been agreed between farmers and
processors organisations. National provisions for recognition of Producer
Organisations (POs) have resulted in 228 formally recognised POs in six Member
States (Belgium, Czech Republic, France, Germany, Italy and Spain). In four of
those Member States (Czech
Republic, France, Germany and Spain), POs have conducted collective
negotiations covering between 4 and 33% of total deliveries. Two Member States
(France and Italy) have applied rules for regulating the supply of certain
PDO/PGI cheeses.
The Commission considers that it
is too early to see significant effects of the Milk Package on the milk sector,
especially in disadvantaged regions. The arrangements needed to actually apply
the possibilities of the Milk Package, like the creation of POs and the
organisation of collective negotiations, require time and a strong dynamic from
farmers themselves.
As a further measure for the
post-quota market, the Commission recently launched the European Milk Market
Observatory (MMO), aimed at improved market transparency and analysis for
economic operators when they take their business decisions. The MMO will help
the Commission to monitor market developments, to deploy "safety net
provisions" in a proactive manner and to react to exceptional
circumstances.
Despite a largely positive
outlook for world dairy markets, with significant growth opportunities in the
coming years, the report reflects on doubts that have been voiced about the
capacity of the EU regulatory framework to deal with extreme market volatility
or with a crisis situation after the end of the quota regime, especially with a
view to ensuring the balanced development of milk production across the
European Union and avoiding extreme concentration in the most productive areas.
The Report confirms that the Commission will pursue the debate to address these
concerns and will explore the need and scope for additional
tools.
For more
information:
Webpage on Milk Package: http://ec.europa.eu/agriculture/milk/milk-package/index_en.htm