Tensions have risen this week between European dairy farmers and processors as blockades and protests rage over the profitability of production.
Farmers' groups in Germany, Belgium and Netherlands have all taken action recently from spilling milk to boycotting production as they call for a higher basic pay rate for their products. Concerns Concerns continue to grow among European dairy farmers as production costs continue to rise due to global supply issuers and European agricultural reforms that recently resulted in a two per cent rise in production quotas. According to the farmers groups, these measures have served only to exacerbate the high cost of milk production, with the European Milk Board calling for farmers to be part of a new system of price-fixing in Europe.
The protests In Germany, some milk producers have withheld their goods over the concerns. Others have reportedly blockaded dairies in the country in a bid to disrupt milk supply. In the Netherlands, leading processor Friesland Foods says it has experienced similar blockades at its plants in the country during the week from members of the Dutch Dairymen Board (DDB). The company claims that the actions, which began last Tuesday, had twice halted production at its fresh food site in Nijkerk, while other plants were also affected over the weekend.
Friesland Foods In a statement, the processor said that it understood the concerns of the DDB and its sister organisations across Europe, and had held several talks with farmer groups over the issue already. However, Friesland claimed that the protests were serving only to harm the entire industry and therefore urged for an end to the protests. "Friesland Foods rejects the demand for payment of a milk price that covers the costs, as supply and demand of dairy products throughout the world determine selling prices," the group stated.
Industry concerns A spokesperson for the Dutch dairy association the Nederlandse Zuivel Organisatie (NZO) said that while on a lower-scale to the actions adopted in Germany, the protests appeared to reflect farmer concerns in the bloc. The spokesperson added that while the NZO wished to ensure a strong relationship with farmers, the organisation believed that the DDB's calls for higher prices were unrealistic in the current market. NZO said that milk producers would have to cope with the changing environment for milk production, a claim repeated by other industry groups in Europe.
EDA view Despite calls from for the introduction for some kind of fair trade price system to protect dairy farmers, the European Dairy Association (EDA) believes that the market must continue to work towards industry deregulation. Dr Joop Kleibeuker, head of the EDA told DairyReporter.com earlier this year that a fair trade-style scheme could serve only to distort agricultural reforms designed to ensure profitability for everyone in the milk supply chain. "The ongoing reforms of the European Common Agricultural Policy (CAP) have meant that there is no bottom in the market but also no ceiling," he said. "This is the choice we have made in Europe, and we are confident that there is a good future ahead for the entire dairy industry on the world stage."
Farming reforms Kleibeuker conceded that with the dairy industry now working towards a system where prices paid for milk are defined by market development, costs were likely to be more volatile. "For farmers supplying milk to the dairy industry and consumers, there are times when it is difficult to cover costs, but there are also moments when it is hard for processors as well," he stated. "We are all working within these developments, so everyone has to cut costs where possible to maintain profit."
Ultimately, Kleibeuker said that the CAP reforms were vital to ensure that farmers could cover their costs in a way that ensured value for processors and consumers as well as allowing for future investment.