EU says milk price still 'reasonable'

There are “limitations” to what the European Commission can do to help European farmers, many of whom have been taking to the streets this summer to protest what they say are too low prices for their products.

Agriculture commissioner Phil Hogan i said in a press conference in Brussels on Wednesday (26 August) that what aid measures the EU will take depend on the outcome of an extraordinary meeting of farm ministers on Monday.

Prices for agricultural products are under pressure because of several factors: the Russian food ban; lower demand from China; changing consumption patterns in Europe; and the end of the EU's milk quota scheme.

Hogan noted that back before the milk quota ended on 1 April, he had warned there could be “price volatility”.

Since there is no longer a cap on how much milk each farmer is allowed to produce, economic theory had suggested the price would go down when production increased.

The Irish commissioner rejected the suggestion by European Milk Board, an organisation of European dairy farmers and farmers' lobbies, to introduce a temporary milk quota.

He brought to mind that European politicians together decided there would be a “market-oriented” agricultural policy.

“Milk quota have ended. They are gone”, he said.

Hogan was still optimistic about the prospects of European dairy sector for the mid term and long term. But he refrained from announcing any measures to help farmers in the short term, referring instead to ministers’ meeting next week.

“I'm hopeful we will be able to make some announcements [about measures] on 7 September”, he said.

Hogan said “each country is affected in some way or another”, but noted the Baltic States and eastern members of the European Union have “difficulties, particularly in the dairy and pig meat sector”.

This could be seen as a 'you don't have it so bad' comment aimed at French farmers, who have been protesting this summer against what they say is unfair competition from eastern European workers.

“The price of milk went up in France in June. Then we had a protest in July. It's interesting”, Hogan said about the French' protests.

He added that €0.30 per litre, the current milk price in France, is a “reasonable”.

In the Baltics, the price was between €0.20 and €0.23 in June, according to the EU's Milk Market Observatory - “less than the cost of production”, noted Hogan.

The EU average milk price is €0.30 per litre, down from €0.37 a year earlier. The prices have been consistently lower in most countries which joined the Union since 2004, compared to the 15 'old' member states.

Hogan ruled out the suggestion that individual member states could enter negotiations with Russia to sell products which are under the Russian food embargo.

“If we don't stand together, we hang separately”, he said.

He dismissed the idea of using the money that was paid to the EU by countries that have exceeded their milk quota when it was still in place to support hard-hit farmers.

He added that with €56 billion of subsidies and development programmes under the EU's common agricultural policy, “there is considerable investment by European taxpayers” in the agricultural and food sector.

On the day of the agriculture ministers meeting on 7 September, farmers are planning what they say will be a “big” protest in Brussels.

“The idea is for dairy farmers from all over Europe and loads of tractors to give the ministers a graphic lasting reminder of the atrocious results of their milk policy”, an invitation to farmers by the European Milk Board says.

The EU's common agricultural policy accounts for about forty percent of the EU budget.

The farmers' lobby is one of the strongest in Brussels and throughout the history of European integration, farmers have shown they are able to organize large protests, including dumping milk and butter in Brussels.