American dairy farmers aren’t the only ones frustrated by the current economic situation facing the industry. Ewa Krukowska and Rudy Ruitenberg have a story in Bloomberg Online reporting on farmer protests outside the European Council building where agriculture ministers are meeting to “debate emergency aid to the industry.” According to the report, European dairy farmers could lose as much as €14 billion ($20.4 billion) this year due to milk prices dropping by 30 percent according to the European farm association Copa-Cogenca.Padraig Walshe, president of Copa, made this statement ‘“Never before was any sector of agriculture so badly affected. Farmers are going broke. The European Commission and ministers cannot stand idly by.” This situation explains why the protesting farmers have taken to pouring milk in the streets of Brussels. They are upset about the price slump, but they are also concerned about “plans to scrap production quotas.”
The European Commission is the regulatory body within the European Union. Earlier this year the Commission announced “it will change rules on state subsidies in the next several weeks to allow the 27 member states to temporarily offer aid of as much as 15,000 euros to farmers. It also proposed changing the output quota so levies for overproduction are used to pay for industry restructuring.”
The EU plans to set up some sort of working group to look into ways that dairy profits can be improved in the future. One option is a possible futures market. Previously, Germany, France, and 14 other governments “urged the commission to step up aid for the dairy industry, including paying a higher price for milk in so-called intervention buying.” The nation’s also proposed increasing subsidies for exports.
While the U.S. is working on what formula should be employed to provide the $350 billion in funding for the dairy industry put in the fiscal year 2010 appropriations bill for agriculture, European farmers will continue to express their frustrations outwardly until the commission grants them some relief.
To read the Bloomberg story click here.
Posted: 10/05/09
