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Voluntary Production Cut Measures "Insufficient to Bring Market Stability"

17 March 2016

EU - EU Agriculture Ministers this week backed a new package of measures to help farmers, including ailing dairy markets, but the European Milk Board (EMB) has said the measures do not go far enough.

The ministers put in place measures to allow producer organisations, interbranch organisations and cooperatives in the dairy sector to establish voluntary agreements on their production and supply, in an effort to reduce overproduction in Europe.

But the EMB, which has long advocated voluntary supply management,  said voluntary production cuts only at producer organisation and cooperative level cannot stabilise the milk market, and the cuts should be coordinated on a central level.

It said that without central control, any reduction achieved by some producers would be compensated for by others, as willingness to participate in cuts would vary significantly, meaning the market as a whole would continue to experience slumps. 

The organisation said the increase in production volumes in the coming months will quickly neutralise the potential effect that these measures could have.

"These measures cannot put an end to the crisis on the dairy market," said EMB-President Romuald Schaber.

"For instance, we just received the information that in Germany some farmers will only receive 21 cents/kg for the milk they sold in February. Such a downward trend cannot be stopped by such soft measures."

The EMB put forward what it considers a better solution in the statement: "When a call for tenders for an EU-wide voluntary restraint of production is published, each producer should decide individually whether or not he wants to reduce his production in exchange for a bonus payment.

"If after three months at the latest no clear effect of volume reductions is to be observed, a mandatory EU-wide reduction of production has to apply."

TheCattleSite News Desk

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