French way to lift milk price is to cut milk quotas
French farm minister, Hervé Gaymard, has set the pace with his warning last week that slimming fads, like the Cretan diet (see article on this page), are killing the dairy industry. Gaymard says trimming milk quotas is the only solution. The French calculate that a 1% cut in milk quotas would save €350m from the EU’s spending on intervention. “At the same time, it would firm up returns for producers, and, therefore, be beneficial to the whole sector in Europe,” says Gaymard.
At last week’s Farm Council, ministers from Germany, Austria, the Netherlands and Luxembourg said they would be ready to consider Gaymard’s proposal. French dairy farmers, particularly in Brittany, are over-producing and prices have tumbled as a result, by up to 7% in one month. “Since the establishment of milk quotas in 1984, we have only ever seen them rise. It seems to me, today, given the trend towards falling consumption and difficulties with exports, that we have to consider a reduction,” says Gaymard.
The UK and Denmark remained sceptical of his call to adjust milk quotas, and Agriculture Commissioner, Franz Fischler, has not taken sides on the French proposal, which comes five months before the institutional price reductions for butter and powder agreed in the CAP mid-term review.
Dominic Cronin, chairman of ICMSA’s dairy committee, said the Irish Dairy Board did not expect a reduction in milk price this side of July. Increased export refunds and an improved Aids to Private Storage Scheme (APS), as introduced by the EU Commission, should keep returns to Irish co-operatives and farmers steady.
Mr Cronin called on co-operatives to signal to their suppliers that there would be no reduction in the price of milk in the first half of this year, in order to improve farmer confidence.
The IFA says dairy markets will be stable for the first half of 2004, allowing the industry to urgently address its cost inefficiencies and low value product mix.
ICOS wants better export support for EU dairy products, to lift prices above current intervention price levels.
