EU milk package threatens ‘fairer deal' for farmers, cries NFU

07-Dec-2011 - Last updated on 07-Dec-2011 at 13:29 GMT

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Opinion is split on the final text of the so-called EU Dairy Package, with the UK National Farmers’ Union (NFU) citing missed opportunities within the European Commission’s (EC’s) text, and Dairy UK stating its continued opposition to minimum contract terms.

The final text of the proposed new rules – which amend EC Regulation No.1234/2007 and, subject to review, will be current to 2020 – seek give farmers fairer prices for raw milk.

Following the 2009 milk crisis (when farmers dumped milk in protest at low prices), the key aim of the legislation is to boost dairy farmers’ bargaining power and ensure they receive fairer prices for milk produced, in the lead up to the scrapping of milk quotas in 2015.

Article 126a of the text seeks to give farmers more bargaining power, allowing producer organisations to negotiate prices with processors, where volumes of raw milk negotiated do not exceed 3.5 per cent of total union production, 33 per cent of total national production or 33 per cent of combined national production.

EU Parliament (EP) rapporteur James Nicholson, the head of the European Parliament’s Agriculture Committee’s negotiating team, said: “We have achieved the central aim of this package, to introduce measures (such as establishing producers’ organisations), which will allow producers to organise themselves better and strengthen their position in the dairy supply chain.”

Written contract wrangle

However, under Article 185f, member states may still continue to decide whether or not to impose written contracts covering milk delivery from farmers to collectors or processors for their territory, due to national contract law variations.

This led the UK National Farmers’ Union (NFU) to cry “missed opportunity”. NFU chief advisor Rob Newberry said that – bar the collective bargaining article – the proposals did little more than maintain the status quo for farmers.

Newberry said the NFU would push the UK’s Department for Environment, Food and Rural Affairs (DEFRA) to legislate for minimum contract terms. In such cases, the new rules state that such contracts must state the price, while member states may also stipulate a minimum duration of at least six months.

Compulsory contracts or written offers for such contracts will also have to be drawn-up before delivery, and must include: the price paid for raw milk (accounting for market indicators), payment periods and arrangements for milk collection and delivery.

Plenary vote

Dairy UK represents both farmers and processers, and director general Jim Begg said: “Throughout the discussions leading up to today’s agreement, Dairy UK has consistently maintained that voluntary contractual arrangements are the most appropriate for the UK dairy industry.

“Now, with sight of the final package, we remain committed to the view that this is indeed the way to deliver the best outcome for our dairy farmers and milk processors.”

To improve the market for protected geographical indication (PGO) cheese, the EP committee said MEP’s had also inserted a provision for a supply chain management system.

“Member states may establish [this] provided it in no way harms competition on the single market or leads to small cheese producers being adversely affected,” the committee said.

Results of the trialogue negotiations will now be presented to Agriculture Committee MEPs on December 20, with Parliament’s full vote expected in February 2012. The new regulation will then enter force later that year.