Fischer Boel admits low milk prices threaten future of dairy sector

THE dairy sector is heading for disaster if milk prices stay at their current historically low level, European agriculture and rural development commissioner Mariann Fischer Boel has admitted.

She met with the new French minister of food, agriculture and fisheries, Bruno Le Maire, on a visit to Paris last week.

“The situation in the dairy sector is highly concerning and we both agree that, if prices stay at this historical low, we are heading for disaster, especially young farmers who have made huge investments.”

Ms Fischer Boel outlined in her internet blog actions taken by the European Commission to alleviate the situation. “We have activated all of our market instruments. We maintain our policy on export refunds, where we do not undercut world market prices. But we still provide vital assistance to our exporters. And we will soon propose to extend the period for intervention and private storage aid.

“We will also allow farmers’ payments to be paid earlier than usual. This means that 70% of the payments can be paid out in October, if checks have been carried out. There is also the possible option of governments offering loans to farmers – on market terms, naturally.”

10 days ago, EU leaders asked the commission to provide in-depth analysis of the market within two months. She will present it on July 22. “This is not a time for stalling. However, urgency should not make us lose sight of the ultimate goal: to create a strong dairy sector.”

Ms Fischer Boel said she was pleased to hear Mr Le Maire agree quotas are a thing of the past.

“I know that some people blame the current crisis on the decision to phase out quotas. This claim is not only wrong, it is also counterproductive.

“In the last quota year, production fell by 0.9% despite the increase in quotas. In the EU we are 4% below quota overall.

“If we make quotas the scapegoat instead of facing up to the real problems, how will we ever stand a chance of fixing them.”

Urging people to step back and look at the entire food chain, she asked why have falling producer prices not translated into falling consumer prices.

“Why is milk being used as a loss leader, the product that is sold below cost to lure consumers into buying other overpriced products?

“It is not hard to see why it is a good promotion strategy for retailers. They keep the profits and the bill is passed on to the struggling dairy farmers.”