Five Year Compulsory Milk Contracts Excessive

FRANCE - With the French presidential elections coming up at the end of April, the French Milk Producers Association (APLI) has written to President Nicolas Sarkozy highlighting the problems with obligatory milk contracts.
calendar icon 12 April 2012
clock icon 1 minute read

Last year the French government made it compulsory for French milk producers and processors to have a signed contract in place.

Whilst dairy farmers support contracts between farmers and processors, there are a number of points that APLI believes need to be revised.

The contracts must stipulate a minimum term of five years, however they do not have to specify a minimum farm-gate price that would cover cost of production. Producers feel that this would put them at an economic disadvantage and threaten their livelihood.

Another fear the farmers have is that banks could even demand a minimum term of 15 years as a guarantee and only grant loans upon this condition, says APLI.
In their letter, the dairy farmers ask what does it mean to be part of a co-operative? Are you free to determine your own conditions or are you tied for years by contract?

"The compulsory five year contract is excessive," the group concludes.

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