DISAPPOINTMENT has been voiced over the European Parliament’s final legislative agreement for new rules for the milk sector.
Alyn Smith MEP, Scottish member on the parliament’s Agriculture and Rural Development Committee, expressed his frustration at the weakening of the report to such a degree that he said he could not support it.
The final package waters down significantly the strong position initially agreed to by the European Parliament. Crucially, instead of mandatory written contracts for all milk farmers in the EU, secured through an amendment tabled by Mr Smith in the committee, it will be up to member states to decide if written contracts will be compulsory – an option the UK government probably will not take.
Producer organisations will be able to use their bargaining power to negotiate better raw milk prices for the farmers they represent, but face stronger limits on their potential size and bargaining power than in the parliament text. Rules on transparency of data on production and monitoring the progress of prices and margins have also been significantly weakened. Supply management options will be available but only for the producers of European quality-mark cheese producers, concentrated in only a few member states.
Mr Smith said: “Scotland’s dairy herd has fallen by 7% since 2007 and, combined with rising input costs, times are not easy for our dairy farmers. The milk market is not working; precisely the opposite. Our producers operate facing systemic imbalances in the market. This agreement will not deliver the help they require and I fully expect that in a year we will be back in parliament, wondering why we haven’t seen the positive changes we had hoped for, having lost precious time.
“The whole process to get this package into the shape it is now has not covered the parliament in glory. On every issue of importance, the parliament has simply given way before the negative blocking power of the council. As a result, many of the important gains we made in the vote in agriculture committee have just been wiped out.
“In particular, I’m extremely disappointed about the lack of mandatory written contracts. I am astonished that this does not already exist. It is the very basis of fair dealing between commercial partners, and it is disgraceful that many farmers do not even know what price they will get when they deliver their milk. I appreciate that the new rules do now mean that a contract will have to state the price, but the fact that the contract itself will not be mandatory in many countries completely defeats the purpose. This will only mean the continuation of unfair commercial practises.
“Similarly, the bargaining power of producer organisations has been weakened in the final text. Typically, the council and commission scream monopoly when small producers try to get together to win a price sufficient to cover their production costs, but do nothing about the immense middleman power of the retailers and processors. Indeed, for some countries 33% will not make a difference, as they already have producer organisations covering more of the market.
“The council has also severely restricted the information about production levels, quality, prices and margins which must be disclosed. Full transparency is absolutely fundamental to an effective working market, so again the final deal simply falls short of what is needed. I am sorely disappointed that we have not seen more progress for our producers.”