Dairy surpluses and the drop in prices for livestock farmers must be tackled with a mandatory incentivised reduction in production. Market regulation and stability and price recovery must be a priority.
The impact of the COVID-19 pandemic is hitting the dairy sector particularly hard. Since the beginning of March, we have seen the collapse of the market, with milk surpluses and a worrying fall in prices for producers. In the face of this urgent situation, ECVC is calling on the European Commission to take action to address the situation and regulate and stabilise the market situation and producer prices.
To remedy the situation, on 22 April the European Commission adopted a package of measures providing an total of €80 million of support for the agricultural and livestock sector, including €30 million euros for the dairy sector. In the latter, financial support will come in the form of the private storage of skimmed milk powder, butter and cheese.
ECVC denounces that these measures, besides being late and insufficient, show once again that the European Commission is concerned with production and not with producers, when at this moment more than 1000 farmers per day leave the profession in Europe.
This measure does not stop milk production increasing, as there is no coordinated control over volumes. It will not sufficiently relieve the market and will not prevent producer prices from falling. Moreover, these stocks will, for many more months, drive down producer prices (as observed in 2016 and 2017). Consequently, this measure will again lead to many farms of all sizes being abandoned and will be a major obstacle to young people entering into the profession.
In this way, the real impact of dairy storage is to protect the interests of the industry, ensure that the period of low prices will last for many months and facilitate neoliberal priorities and inconsistent free trade agreements.
Furthermore, ECVC deeply regrets that the support measures for the dairy sector arrive a month and a half after the beginning of the crisis and will probably (at best) not have any impact on the markets for another month, given the time required to approve and implement them. In this way, the inadequacy of this financial support should also be highlighted. There is talk of EUR 80 million to help a wide range of sectors, while in 2016, support for the dairy sector amounted to EUR 500 million.
In that context, ECVC make the following demands of the Commission:
- The revision of intervention price values, so that they are not lower than the average production costs;
- The launch of public intervention and market regulation in the dairy sector;
- Compulsory and compensated reduction in production volume.
- Reducing production through the extensification of production, financed, for example, by the European Investment Bank. In this way, the measure contribute to the objectives of the Green Deal and the farm-to-fork strategy;
- Compensation for part of the cheese that could not be sold under the PDO and PGI quality indicators, and its subsequent distribution to various charities for delivery to people in precarious situations.
The COVID-19 crisis shows us the extent to which we currently depend on a totally unsustainable globalised system. Now more than ever, we need to have more small and medium-sized farms spread across all territories, as well as farms with a greater degree of autonomy, farms that practice agroecology and produce and sell close to consumers.
That is why we need public tools for market regulation. These must allow quick and effective reactions, which protect producers from volatile prices. We cannot accept being victims of each and any crisis, be that financial, geopolitical, health or climate crises. The extent and duration of this crisis, as well as the possibilities of a relapse, are still unknown; however, what is clear to us is that small-scale and local agricultural and livestock production guarantees healthy and sufficient food for all European citizens.
Andoni García Arriola – ECVC Coordinating Committee: +34 636 451 569 – ES, EUZ
Pierre Maison – ECVC Coordinating Committee: +33 615 73 13 89 – FR
José Miguel Pacheco – ECVC Coordinating Committee: +351 918736441 – ES, PT