A group of EU diplomats will meet next week (13 October) to chart a future for Europe's dairy industry, after agriculture ministers agreed on 5 October on the need for a study by an ‘expert high-level' group.
Mariann Fischer Boel, the European commissioner for agriculture, stressed that the group would study medium- and long-term problems, rather than short-term responses to today's low prices. Ministers agreed that the group should draw up proposals that contribute to “stabilising the market” and “enhancing transparency”.
Hard-fought reforms to the Common Agricultural Policy and a wave of demonstrations by dairy farmers, including one outside the Council of Ministers building on 5 October, are the backdrop to the group's work.
Last year the EU agreed to phase out milk quotas by 2015, but some countries would like a pause in this gradual phase-out while prices are low. Fischer Boel insisted that the group would not unpick recent reforms. “I was glad to see that there will be no back-tracking on the measures that we have already taken.”
The group will be chaired by Jean-Luc Demarty, director-general of the European Commission's agriculture department. The Commission department for competition will pay close attention to the work, which will look at the bargaining power of farmers vis-à-vis big dairies.
The group has also been asked to look at creating a futures market in dairy products, and at the “appropriateness” of current market instruments. Ministers asked for a final report by the end of June 2010.
Market management
There was far less consensus among ministers over whether the Commission has done enough to help farmers through the current downturn. By the end of this year, the Commission will have spent an extra €600 million on market management, such as export refunds and buying up skimmed-milk powder and butter. A group of 20 countries, led by France and Germany, argue that these measures should be extended to save the dairy industry from “long-term damage”. However, the UK warned against a return to “the bad old days of butter mountains and milk lakes”.
This dispute will be taken up again later at a meeting of agriculture ministers in Luxembourg on 19-20 October.
On Friday (9 October), the Commission will present new proposals aimed at helping farmers cope with the current crisis. To stimulate demand, the Commission is proposing to be allowed to amend some rules without having to obtain prior approval from the Council of Ministers. (Similar provisions already exist for eggs, pork and beef.)
The Commission will also propose to relax state-aid rules later this month, allowing national governments to make payments of €15,000 per farmer.
Such measures are unlikely to satisfy farmers, who want more market intervention along the lines of the Franco-German proposal. “Farmers are going broke. There is real attrition out there,” said Padraig Walshe, the president of Copa, a pan-European organisation representing farmers.
