"What Future For Milk?"

EU - Discussing the milk market crisis last year and its effects on thousands of producers across the EU, Dacian Ciolos, the Agricultural Commissioner looks at how the industry can move forward.

29 March 2010

2 minute read

The Commissioner highlighted the importance of intervention in the market saying that "most of the tools we have to intervene have been put to work in recent months. They have helped reverse the decline in prices that reached their lowest level almost a year ago."

He said that intervention of butter and skimmed milk has helped the recovery along with an extended system of private storage for butter, activation of export refunds, advanced direct payments and a special allocation of 300 million euros for milk producers.

He said that direct aid has been a crucial element of stability in income, enforcing his support of an agricultural common agricultural policy (CAP).

Mr Ciolos said that he wished to encourage producers to play the supply and demand game, allowing them to adapt and seek competitiveness.

With this in mind he spoke about the abolishment of quotas post 2015, and said this must be seen as an opportunity.

He said that whilst many believe quotas protect small producers, he highlighted the fact that they had failed to prevent the disappearance of hundreds of thousands of farms between 1984 and 2008.

Mr Ciolos went on to say that increased exposure to farm price volatility must be controlled - to do this existing tools must be adapted. He said that solidarity between producers must be strengthened, and a greater role given to producer organisations.

The Commissioner said that he looked forward to working with his colleague in charge of the competition to find appropriate solutions which currently prevent the bargaining power of producers.

Mr Ciolos said that it is important to strengthen the soundness and transparency of milk - building on the relationship between producers, processors and distributors.

"Greater transparency is key to building a stronger industry."

"While respecting the rules of competition and the need for confidentiality of certain information, it should be possible to improve the functioning of the dairy food chain," he said.

Mr Ciolos concluded saying that competitiveness, transparency and market orientation are the three keys in helping the industry prepare for the future.

Other challenges that affect not only dairy farmers but also other sectors of the agricultural industry and the wider society must be considered, such as climate change, responding to environmental issues and considering animal welfare.