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Competitive Market Forces Should be Only Driver for European Dairy Sector

16 October 2012

EU - In the framework of the current discussions on the reform of the CAP (Common Agricultural Policy) at the level of the European Parliament, the European Dairy Association (EDA) wants to bring forward once again that competitive market forces should be the main driver for the future development of the EU dairy industry.

As the political discussions on the measures to be put in place in the framework of the CAP reform enter a critical phase, EDA – as body representing the interests of the EU dairy industry – calls upon the decisionmakers to focus on competitive market forces as main driver for the future developments of the EU dairy industry.

In the context of the various proposals currently debated, EDA sees the abolition of quotas in 2015 as the major next development in the reform of the CAP.

“Only after the abolition of the quota the dairy sector will be able to anticipate fully to market developments” says Joop Kleibeuker, Secretary General of EDA. ‘As many dairy industries have already planned and invested for the post-quota regime,’ he continues. ‘EDA urges that the commitments made to abolish the quota in 2015 should be maintained and met; no proposals to re-establish any other form of supply management, should be introduced. This would only lead to a weaker competitiveness of the EU dairy sector globally.’

According to EDA, the CAP reform will result in a greater market orientation, which requires the free interaction of competitive market forces, particularly within the EU single market: ‘The integrity of EU competition law should therefore be protected,’ Mr Kleibeuker continues. ‘Proposals for suspension of competition law or irresponsible derogations or exemptions must be avoided.’

In this context, Mr Kleibeuker adds: ‘EDA is not in favour of re-opening the Dairy Package. We believe that any proposals to change the mechanisms of the Dairy Package should be avoided, because these would result into weakening the position of the EU dairy sector and would render this sector uncompetitive in the world dairy market.

EDA is furthermore convinced that the EU must continue to play a major role in addressing extreme price volatility. Besides the single farm payment, an adequate safety net provided through an effective intervention system is essential.

Mr Kleibeuker concludes: ‘For EDA, in this framework of market orientation, the main focus of the CAP reform should be on maintaining food security, avoiding extreme market volatility and addressing sustainability, while the CAP must continue to be adequately funded by the EU.’

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