Milk prices on the rise, says Commission report
Milk prices on the rise, says Commission report
Dairy sector did well in second half of last year, but farmers still facing difficulties.
Milk prices increased in the second half of last year after having fallen to very low levels, according to a report by the European Commission.
The report, which was presented to EU agriculture ministers in Brussels yesterday, shows that average EU milk prices increased by 15% between May and December last year. Prices went up from €0.244 cents per litre in May to €0.284 in November. The price fell to €0.283 cents in December, in line with seasonal trends.
The Commission welcomed the return to normal market conditions, but said it wants new measures to protect farmers against price volatility.
“There was a crisis situation last year…and it did take a certain amount of time for the dairy sector to recover,” said Dacian Cioloş, the European commissioner for agriculture, who presented the report to ministers.
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But he said that farmers were still facing difficulties: “We can be very pleased that we are not longer in the very difficult situation we were last year, but that does not mean that prices have fully recovered to pre-crisis levels, and dairy farmers have certainly not recovered their pre-crisis losses.”
The sharp fall in prices provoked angry demonstrations by farmers in France, Germany and Belgium, including several protests in Brussels where farmers burned hay and poured milk onto the streets.
In response to lower prices, the Commission re-introduced export refunds and began buying up unsold butter and milk powder. An extra €600 million was spent in 2009 on helping dairy farmers, and another €300 million is to be spent in the coming months.
Without this market management the dairy sector would not have recovered as quickly, said Cioloş, a view that is shared by the majority of EU member states.
The Commission will propose new measures at the end of the year to ensure price stability, he said. These “non-budgetary measures” would address producers’ negotiating power, how market mechanisms could be “changed and managed and become more efficient”, as well as contracts and transparency in the supply chain, the commissioner said.
Agriculture ministers will discuss these issues in July, following a report by a high-level group on the future of the industry.
The Commission and Spain, the holder of the EU’s rotating presidency, rejected claims that the extra €300m that dairy farmers are to get in 2010 was not a good use of resources “The [price] situation is unstable,” said Elena Espinosa, Spain’s minister for agriculture. “There are discrepancies between the member states and it is something that shows the crisis is still ongoing.”
EU farm ministers yesterday also discussed the role of agriculture in the EU’s new 2020 jobs and growth plan.
At least four countries – France, Ireland, Portugal and Romania – insisted that the EU’s 2020 strategy should not have a negative impact on the agriculture budget. Several others called for a strong Common Agricultural Policy which was “adequately” financed. Another group – including Germany, Denmark, the Czech Republic and Luxembourg – said this was the wrong time to talk about the budget.