Mixed reaction to euro rules for dairy farmers

The European Commission this week announced new rules which they said would give farmers fairer prices for raw milk.

James Nicholson, head of the Agriculture Committee 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.”

The rules appear to have won the backing of industry body Dairy UK, with its director general Jim Begg calling the announcement “undoubtedly a comprehensive package” but added that it was “very much in line with expectations”.

“Given the changes that are likely to take place in other member states as a consequence of this agreement, the Council and the Parliament have done well to achieve a consensus relatively quickly.

“For the UK, we now need to sit down and consider the opportunities that this agreement brings for the development of the UK dairy sector and we must understand the implications of whatever arises from the new legislation on producer organisations.”

However, NFU chief dairy adviser Rob Newbery said: “The European Commission’s dairy package proposals were meant to safeguard the long-term future of the dairy sector but, with the exception of new powers for producer organisations, today’s agreement does little more than maintain the status quo for our farmers.

“We have been in intense discussions with the European Commission, the European Parliament and the European Council throughout the dairy package negotiations but disappointingly it seems farmers will not be protected by common contract rules across the European single market.

“We see this as a real missed opportunity by the European institutions to help increase the bargaining power of farmers. However, the package doesn’t close the door on individual member states choosing to legislate for minimum contract terms and Defra Minister Jim Paice has committed to consult on this matter when the time comes.”

The agreement must still be formally accepted by a vote in the Agriculture Council and European Parliament, with a likely adoption in the New Year.

A question of contracts

The new EU milk package contains a ruling on milk contracts. It says member states can chose to impose contracts regarding milk delivery from farmers to processors. If they choose to do so, they will set the price for raw milk. Elsewhere new rules will allow producers’ organisations to negotiate raw milk prices for the farmers they represent.

However, the volume of raw milk covered will be limited to 3.5 per cent of total EU output and 33 per cent of overall national production.