Call for caution on release of dairy products from intervention stocks

THE European Commission was urged yesterday to exercise extreme caution in the way it manages the release of dairy products from intervention stocks onto the market.

Copa-Cogeca, the umbrella body for European farmers and agri co-ops, warned that the market is very fragile and farmers cannot suffer another income drop.

It also called on the commission to ensure the selling price is not below the current market price, in order to avoid any drop in milk prices.

Copa-Cogeca Secretary General Pekka Pesonen said the market situation for dairy products has improved since the severe crisis last year, but the milk sector is very sensitive to any new decisions.

The average milk price paid to producers in the EU still reaches only 27 to 28 ct/litre, which is not much improvement on last year.

EU farmers’ incomes dropped on average by as much as 11.6% in 2009 and there is increasing concern among dairy producers about the extreme price volatility.

“Many of them have not yet experienced the benefits of rising market commodity prices on the EU and world markets and they are still being squeezed by low prices and high production costs,” he said.

Mr Pesonen said the commission has just opened up the possibility of selling a considerable part of dairy public intervention stocks.

He said it must pay attention to the quantities of skimmed milk powder which could be subject to tender. This could distort the market if it is not managed properly. Farmers simply cannot face any further pressure on prices or on their incomes, he added.

“We have also sent a letter to the commission, urging it to ensure there is a reasonable management of dairy stocks to ensure the survival of dairy farmers and to avoid an exodus from the rural areas of the EU,” he said.