EU may have to import milk if supermarkets don’t cut prices

EU shop prices for milk jumped 17% from mid-2007 to mid-2008, and have fallen back only 2% since – even though the milk price paid to farmers has halved.

Supermarkets were put on the spot after this week’s meeting of EU farm ministers, by Agriculture Commissioner Mariann Fischer Boel, who warned that the EU may end up short of fresh milk, and would have to import it if retailers don’t find a solution. “You should have a steeper drop in consumer prices than just 2%,” she warned.

In the past, she has complained that retailers make consumers pay dearly for staple foods like bread and milk, when world grain and dairy prices are high, but are slow to pass on savings when markets retreat.

Now, the commission has been asked by EU leaders to report on how to solve the dairy industry crisis – and it is likely that supermarkets will carry at least some of the blame.

Farmers came away with better news from their big protest at the Luxembourg meeting of farm ministers. Padraig Walshe, president of IFA and of the EU farmers group, said, “Today we have met with the president of the Council, Commissioner Fischer Boel, and other key policy makers and explained our situation. We have been told that they would soon announce concrete measures to alleviate the problems for our farmers and send a signal of support to European agriculture.” Paolo Bruni, vice-president of Cogeca, which represents farmers’ co-ops in the EU, said “The European Council has, at its meeting last week, announced that an in-depth study would soon be available to look at how the situation could be improved for dairy farmers. The Council has also sent us a strong message that they are preparing measures to address the imbalances in the food chain, notably the strong power of the retailers.”

They warned they were ready to organise another big protest, if the Council ignored the crisis.

On Monday, their tractors caused motorway tailbacks of up to 25 miles, and farmers opened the taps of a milk truck outside the agriculture ministers’ meeting. They burned a stack of hay outside the European Court of Justice and hurled eggs, cans, and bottles at police, and set rubbish bins and tyres ablaze. Others rushed into a supermarket and emerged with pallets of milk bottles, which they handed to passers-by, or used as missiles.

Police said there were 3,000 protesters. About 300 tried to force their way into the agriculture ministers’ meeting. Two protesters were slightly injured. Commissioner Fischer Boel denounced violence by “a small group of trouble-makers,” and said she had no magic wand to address their grievances.

She criticised farmers for questioning the decision to lift milk quotas. “It’s dangerous and irresponsible to foster unrealistic hopes on what we can do,” she said.

But French Agriculture Minister Michel Barnier said Europe should not leave the food industry to the laws of market forces.