EC Shapes Dairy Industry’s Future

UK - The EU Commission has moved to address the influence of producers, to eliminate unfair commercial practices and to inject control over the price farmers receive for their milk.

13 December 2010

3 minute read

Europe

Agriculture commissioner Dacian Ciolos, said today that the Commission would adopt measures to enshrine minimum standards for milk contracts, in response to recommendations made by the High Level Expert Group in June.

NFU chief dairy adviser Hayley Campbell-Gibbons said: “The proposals mean that the UK government now has a unique and powerful opportunity to help address the dysfunctions in the dairy supply chain by backing these proposals.

“We have been eagerly awaiting the Commission’s formal proposals, which certainly look promising, and feel these measures could prove beneficial for UK farmers, providing Defra gives full backing.

“The NFU has invested a huge amount of its lobbying efforts in the High Level Expert Group process, and it’s clearly paid off. Many of the Commission’s requirements echo our own recommendations for improvement, although the NFU would also like to see exclusivity considered alongside any volume specification so that producers are not tied in to one milk buyer.

Cows“Of most relevance to UK dairy farmers is the Commission’s requirement for milk contracts to set out the price farmers will be paid for their milk, the ways of varying the price - based on specified market indicators or a formula - the volume of milk to be supplied and the duration of the contract, with specific termination clauses.

“For this reason I’d like to see UK milk buyers respond positively to the European Commission’s requirements. The time for resisting change is over. Now is the time for milk buyers to embrace the benefits these measures could bring to them and their farmer suppliers.”

The proposals will be debated by the European Parliament in January and the NFU, with its resources and influence in Brussels, will now be working closely with MEPs to ensure that UK dairy farmers are able to gain maximum benefit from these proposals. Mr Ciolos has made it clear that producers should call for contracts to be put in place that meet the new EU proposals, even where a member state may not make it obligatory.

Dairy UK Director General Jim Begg said the European Commission’s proposals to improve future stability in the dairy sector are an an interesting and much improved package compared with earlier proposals.

">"The decision on producer organisations to leave the question of scale to national competition authorities is sensible,” he said.

“On contracts, I think that some change will materialise in other EU member states. Fortunately, in the UK, we are already where I suspect the Commission wants the rest of Europe to be, with solid engagement between farmers and processors allowing the transfer of market signals, backed up by established contractual relations&.

“Ultimately, the market, and in particular our ability to respond to changing consumer demands for milk and dairy products, is what will determine our prosperity, not regulation”.