Trouble in big bad milk world
She was largely unsympathetic, for example rejecting complaints of increased fuel costs for farmers with a suggestion that they run their tractors on bioethanol.
In fact, if she had her way, she made it clear, dairy farmers would be getting even less. CAP reform had reduced the prices, to be more competitive in the world market, and increased the EU milk quota. But ex-farm prices in Ireland, have remained more or less stable, according to the Commissioner, and direct payments to dairy farmers increased. The final outcome was not that bad, because the increase in the direct payment is bigger than the decrease in the milk price, she said.
If one examines the bottom line, one will see there has been a positive outcome for Irish farmers, according to Commissioner Boel, who berated TDs for their pessimism, and said if they were making speeches in the countryside she could understand why young people are staying out of farming. Her other suggestion was to produce something other than butter and skimmed milk powder. But she is unlikely to welcome an interesting new product from European dairy farmers — the first sign of pan-European unity to bargain a better deal in the dairy industry which Commissioner Boel seems to think is running so well.
According to farmers represented by the European Milk Board, 6,000 dairy farms are closing down every year. In Galicia in northern Spain, 7,000 dairy farmers protested recently against a milk price reduction.
Milk price cuts totalling 4 cent per litre in five years have cost Irish dairy farmers €12,000 of income, on average.
In the UK, the sick man of EU dairy farming, a dairy farmer quits each day of the year. A leading consultancy firm recently estimated that the typical UK dairy farmer was making just over €15 per cow from a herd size of 177 cows.
Surely, with the European Milk Board starting to consider “milk strikes”, Agriculture Ministers across Europe will start to demand action from Commissioner Boel? She must be getting the message by now that not enough of the dairy cash splashed out by Brussels (nearly €2.2bn in export subsidies alone, in 2004) is getting through to farmers. Instead, just two French companies, Danone and Lactalis, shared €45m of export subsidies in 2004.
Farmers seem to have had enough of how the EU dairy sector works, with producers on mainland Europe now starting to complain, as well as those in the UK and Ireland.
Perhaps the culprits are the supermarkets, forcing milk processors to compete intensely to secure supermarket contracts. This would explain why the farm gate milk price has declined over many years across Europe, yet shop prices have risen.
The European Milk Board suspects that the major dairies and businesses now wield too much power at European level, playing countries off against other countries to reduce milk prices, and some governments are colluding in allowing this to happen.
This was recently put to a spokesperson for Tesco in the UK, who easily evaded the question by pointing out that Tesco understands the concerns of farmers, but they buy their milk from milk processors, not farmers, and cannot dictate what the processors pay farmers.
In other words, farmers have to take whatever price is going, unless enough of them come together to become as powerful in the market as Tesco.
Her day in the Dáil chamber was an eye-opener for Commissioner Boel. Perhaps she will realise that her CAP reform doesn’t work properly in the big, bad world beyond her office, and it’s farmers, at the bottom of the food chain, who suffer.
