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EU Report Reveals Case for More Dairy Producer Organisations

25 November 2016

EU - The European Commission has published the second report on the operation of the so-called Milk Package, a series of measures launched in 2012 to strengthen the position of European dairy producers in the supply chain.

The report shows that after three years of implementation, European farmers are increasingly using the tools provided by the Milk Package, such as collective negotiation of contract terms via producer organisations, or the use of written contracts. The measure allowing collective negotiation is designed to reinforce the bargaining power of milk producers, whilst written contracts offer better transparency and traceability to farmers.

Welcoming the report, Phil Hogan stated today: "The report shows that there are measures that we can take at EU level to secure a better position for dairy farmers in the supply chain. Following on from the Agricultural Markets Task Force report last week, I see this report as further evidence for policy action, in the context of the 2017 Commission Work Programme."

The report also examines further possibilities for dairy farmers. For example, it highlights the potential of two key instruments of the Milk Package – Producer Organisations (POs) and collective negotiations – which are not yet fully exploited by Member States, producers' and farmers' organisations, and outlines various ways of making these more effective both at EU and Member State level.

In the UK, the National Farmers Union (NFU) dairy board chairman Michael Oakes said: “The thrust of the EU Commission report is on the role of dairy Producer Organisations. This is something the NFU has always promoted and encouraged.

"It’s a shame that many UK milk buyers, both large and small, see POs as a threat and have publically said that they will not work with farmers who are part of a PO. Today in the dairy farming sector, collaboration is the key and the NFU sees POs as a vital part of developing new relationships in the UK dairy sector."

For the full potential of the Milk Package's possibilities to materialise, the report concludes that an extension of its application beyond 2020 should be considered.

TheCattleSite News Desk



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