The European Parliament,

–  having regard to Title III of the Treaty on the Functioning of the European Union concerning, in particular, agriculture,

–  having regard to Article 174(3) of the Treaty on the Functioning of the European Union concerning, in particular, mountain regions, and to Article 349 concerning outermost regions,

–  having regard to Regulation (EC) No 247/2006 laying down specific measures for agriculture in the outermost regions of the Union(1),

–  having regard to Regulation (EU) No 261/2012(2) on ‘contractual relations in the milk and milk products sector’,

–  having regard to Regulation (EC) No 1234/2007(3),

–  having regard to the Protocol on the implementation of the 1991 Alpine Convention in the field of mountain farming, Mountain Farming Protocol, published on 30 September 2006 in the Official Journal of the European Union(4),

–  having regard to the opinion of the Committee of the Regions NAT-V-028 of 30 May 2013 on the evolution of the market situation and the consequent conditions for smoothly phasing-out the milk quota system – second ‘soft landing’ report

–  having regard to the report from the Commission to the European Parliament and the Council entitled ‘Evolution of the market situation and the consequent conditions for smoothly phasing-out the milk quota system – second ‘soft landing’ report’ (COM(2012)0741),

–  having regard to the study ‘Labelling of agricultural and food products of mountain farming’, commissioned by the Directorate General for Agriculture and Rural Development (administrative arrangement AGRI-2011-0460 / JRC-IPTS No 32349-2011-10),

–  having regard to the study carried out by the Commission on ‘Economic impact of the abolition of the milk quota regime – regional analysis of the milk production in the EU’ of February 2009,

–  having regard to the study carried out by the Policy Department B (Structural and Cohesion Policies) on ‘the future of milk quota – different scenarios’ of January 2008,

–  having regard to Rule 48 of its Rules of Procedure,

–  having regard to the report of the Committee on Agriculture and Rural Development (A7-0383/2013),

A.  whereas the expiry of milk quotas will affect the entire European milk market and particularly dairy farmers in mountain areas and outermost regions, where it will not be possible to take advantage of the growth opportunities generated by deregulation, due to the natural and permanent handicaps of these regions;

B.  whereas, according to Article 32 of Regulation (EU) No 1305/2013, areas north of the 62nd parallel and certain adjacent areas shall be regarded as mountain areas, and whereas the definition and status of the outermost regions is defined under Article 349 of the Treaty on the Functioning of the European Union;

C.  whereas the decisions made by young farmers in these areas about their future will depend on the size of the farms and their financial resources, taking into account the fact that farms which have recently invested in the quota system will, once the quotas are exhausted, face a more acute liquidity crisis and be under a greater financial burden;

D.  whereas there are serious cost disadvantages associated with milk production in mountain areas and in the outermost regions, owing to the locations involved and that given the additional constraints and, in particular, restrictions on land-use, farmers must be guaranteed economically viable and profitable work once quotas have expired;

E.  whereas the expiry of quotas may also place parts of other less favoured areas at a competitive disadvantage, endangering the sustainability of production in these areas, partly because production density is so low that collection and processing enterprises could relocate to more competitive areas where, in particular, the cost of milk collection is lower or the cost of transporting the products to market is lower;

F.  whereas one of the main objectives of the new CAP is to maintain productive agriculture in mountainous and less favoured areas or the outermost regions;

G.  whereas the costs of production, collection, transport and commercialisation of milk and dairy products outside the region of production are substantially higher in these areas than in more favourable locations;

H.  whereas the formation of producer associations can help to cut production costs and give dairy farmers greater bargaining power, particularly where the setting of milk prices is concerned;

I.  whereas existing framework conditions mean that it is often not possible to process dairy products close to where they are produced; notes the need to take infrastructure into account and to allow specific designations such as ‘mountain produce’ to be used for products which are processed within a certain distance of the mountain area concerned; considers it essential for this measure to be applied to all products made from milk from mountain areas;

J.  whereas in many of these areas milk production is the most important and most widespread sector of agricultural activity and is key to production of high-quality dairy products with EU-recognised designations; whereas it is important to maintain production bases in all territories of the Union in order to be able to supply each consumption region without incurring unreasonable transport and environmental costs;

K.  whereas in many Member States and regions, milk production is a key pillar of the regional economy and a key contributor to agricultural added value;

L.  whereas the development and promotion of high-quality dairy products is one possible way of addressing increased milk production;

M.  whereas in many regions, milk production is broadly the domain of small and medium‑sized family farms;

N.  whereas 59 % of farmland in mountain areas is permanent grassland or dairy pastureland, no other agricultural activity generally being possible or viable; whereas 9.5 % of milk is produced in mountain areas; whereas orography and climate limit agricultural alternatives and agricultural diversity is very limited;

O.  whereas in some outermost regions there can be no substitute for milk production as one of the main motors of the economy, social stability environmental quality and land-use; whereas in these regions the POSEI programmes constitute the best instruments for channelling increased aid to maintain production levels;

P.  whereas stockbreeding in these regions is not just an economic activity and a means of livelihood for their inhabitants, but also a key component of their traditional cultures and social structures, closely linked with the life and traditions of the local populations;

Q.  whereas, in mountain areas, outermost regions and parts of other less-favoured areas, the abandonment of stockbreeding and related dairy production frequently leads to the abandonment of agriculture, the neglect of good farmland and subsequent depopulation and migration from rural to urban areas;

R.  whereas, in these areas, agriculture frequently helps to conserve the landscape and biodiversity and limit natural hazards, making it a cornerstone of successful regional development, without which other sectors such as tourism are unable to grow; whereas the abandonment of farming in such areas is likely to have a severe knock-on effect on those sectors;

S.  whereas in many disadvantaged areas, milk production ensures economic and social cohesion, and this must not be put at risk by the expiry of quotas; whereas preservation of the agricultural landscape, the tourism industry, local production-processing-marketing circuits, jobs and long-term perspectives for young people must be safeguarded and promoted;

T.  whereas the removal of milk quotas will lead to Europe-wide competition amongst production regions; whereas product differentiation is vital to maintaining market access for mountain areas and for those outermost regions which produce milk or dairy products;

1.  Notes that, in many Member States, direct payments from the first agricultural policy pillar are, even under the current CAP reform, based on historic reference amounts, which can seriously disadvantage grassland areas and milk production in these regions; calls on Member States affected by such situations accordingly to introduce without delay a system correct the disadvantage suffered by these regions when implementing agricultural reforms at national level;

2.  Notes that mountain milk accounts for around 10 % of milk from the EU-27, but constitutes two thirds of milk production, involving three quarters of producers, in Austria, Slovenia and Finland, and that the corresponding figures also remain very significant in a further 10 or so countries; also notes that in most of these humid mountain regions and also in outermost regions, grasslands are mainly used as grazing for dairy herds, keeping landscapes accessible and inhabited and thereby benefiting tourism, biodiversity and the environment;

3.  Takes the view that permanent grassland and pastureland, which can generally be used for no other purpose than cattle, sheep and goat breeding in these areas, must never be treated as inferior to other types of farmland for the purpose of calculating direct payments from the first pillar;

4.  Considers it essential that a stock grazing premium be earmarked under the first pillar of the CAP and under the POSEI in the outermost regions for farms with grazing and forage areas for livestock; rejects any new requirements regarding the feeding of ruminants which might lead to a breakdown in existing agricultural practice;

5.  Stresses the important role of coupled payments under the first agricultural policy pillar; points out that the Member States in these areas should be given additional possibilities to couple payments, whether national or EU-funded, as agreed in the current CAP reform;

6.  Stresses the need for CAP provisions to give due attention to small farms in these areas, given that they are structurally more labour intensive, are obliged to pay higher prices for inputs and make a valuable contribution to sustaining employment levels and rural development;

7.  Notes that the expiry of the milk quota in mountain areas and in the outermost regions must be evaluated separately, in light of the particular characteristics of such areas, if targeted measures to support and maintain production are to be drawn up;

8.  Given the irreplaceable nature of milk production in some outermost regions, the Commission and the Member States should, in these regions, use the POSEI programmes to strengthen support in the area of direct payments and market measures and the rural development programmes to strengthen support under the second pillar of the CAP;

9.  Calls for additional measures to be made available as part of the development of the Common Strategic Framework, with the participation of the regional development programme, the European Social Fund and the Cohesion Fund; considers that the objective of the Common Strategic Framework should be to promote regional development concepts and structural preservation programmes focusing on safeguarding agriculture and strengthening the upstream and downstream value chain;

10.  Calls on the Member States and regions to formulate, where applicable, a specific rural development programme for milk production in these areas;

11.  Underlines, in this regard, the need to support the consolidation or establishment of projects which generate added value, differentiate products by territory and offer new strategies for enhancing mountain areas and the outermost regions; calls on the Commission to propose wide-ranging measures to support the establishment and running of these projects and related collective investments;

12.  Calls on the Member States to take action against the disappearance of grassland and to take this into account in legislation on land-use planning;

13.  Stresses that second-pillar measures such as compensation allowances, agro-environmental premiums, individual or collective investment aid for production, processing – without forgetting, in the case of the outermost regions (which are covered by the POSEI system), the possibility of having products considered essential for the transformation of regional agricultural production, particularly dairy products, included in the Special Regime Supply, with the objective of maintaining competitiveness –, and marketing, start-up aid for young farmers and aid to promote quality, diversification, innovation and cooperation (including with local authorities) are of great importance for sustainable milk production in these areas; therefore urges that Member States and regions be given the legal framework, the level of funding and the necessary opportunities to ensure the payment of adequate and clearly differentiated compensatory allowances and to promote environmentally friendly, sustainable and organic forms of agriculture; calls for adequate compensation payments from the second CAP pillar to offset the higher investment costs of milk production in mountain areas and outermost regions, occasioned by the particular nature of the terrain, the remoteness of these regions, the extreme fragmentation of plots and the geographical discontinuity of these islands;

14.  Calls in addition for targeted investment aid, for example in connection with depreciation and interest on farm buildings and technology to be made available to dairy farms with development potential, in order to reduce production costs and improve the competitiveness of farms;

15.  Calls on the Member States to promote, in particular, measures under the second pillar, such as cooperative ventures for the rational use of agricultural machinery or buildings;

16.  Calls on the Commission to redefine a coherent rural and milk development programme for mountain areas and the outermost regions, for disadvantaged milk production areas and for Member States where most of the milk is produced by very small farms;

17.  Points out that, given the substantial logistical problems existing with regard to transport and the generally small quantities of milk produced on individual farms, collection costs and finished product transport costs in mountain areas and outermost regions are particularly high, placing them at a major geographical and competitive disadvantage; calls for aid for processing plants, especially cooperative-owned plants, in order to offset the higher costs of collection and production, including inputs, and transport of the finished products in these areas, compared to more favourable locations;

18.  Stresses that a milk production market monitoring tool (Milk Observatory) is needed in order to collect and disseminate data and information on production and supply, to provide early warning of the risks of market imbalances, taking into account the diversity of dairy products, and to carry out prospective short-term analysis in the context of price volatility with a view to fine-tuning the adjustment of milk volumes to market demand;

19.  Points out that in-situ processing and marketing on farms or in mountain pastures means greater added value for smallholdings and micro-farms in mountainous regions, outermost regions and other less-favoured areas and enhances the tourist potential of these locations; stresses that such initiatives should be funded under the second CAP pillar;

20.  Emphasises that the considerable distance between the outermost regions and consumer markets creates the need for double storage, in line with modern logistical organisation; therefore urges the Commission to consider these storage facilities located outside the territory of the outermost regions as eligible within the framework of regulations concerning investment in these regions;

21.  Considers that areas with alpine pastures and those areas of the outermost regions which produce milk are particularly in need of investment and specific measures to maintain or re-establish a suitable environment for the production, processing and sale of milk;

22.  Points out that measures should be put in place to allow the production of typical products in an artisanal way;

23.  Calls on the Commission and Member States, when drafting all legislation, to take into account the need to avoid excessive bureaucracy and keep health, labelling and compulsory information requirements within reasonable bounds, so as to ensure that they are feasible for small producers and processors;

24.  Points out that small farmers in mountain areas and disadvantaged areas , such as those outermost regions which produce milk or dairy products, should be supported in establishing producer organisations which strengthen their bargaining power, as it is important for small-scale farmers in these areas that they maintain and develop more regionalised, local markets;

25.  Stresses that hygiene and marketing rules need to be adjustable to the size of markets and their demands and that hygiene standards should therefore be suitable and applicable to farmers and milk processors in mountainous and disadvantaged areas and in the outermost regions;

26.  Points out that stockbreeding methods aimed at efficient milk production are particularly cost-intensive on small farms; therefore calls for breeding to be promoted, so that dairy farms in these areas can breed their own high quality livestock in spite of this;

27.  Takes the view that the formation of dairy producer organisations should be encouraged, in order to ensure adequate market access for all farms and to create partnerships for the promotion of agro-environmental tourism;

28.  Points out that, in line with arrangements under the CMO for fruit and vegetables, producer organisations should be given the opportunity to create EU-funded operational programmes; in this context producer organisations should be given the opportunity to promote access to new markets, market development, quality control and product innovation and advertising initiatives, particularly in respect of the new ‘mountain product’ designation or other optional reserved terms which may be approved, protected designations of origin and other quality marks, and to foster the development of skills and crisis management measures;

29.  Calls on the Commission and Member States to expand joint research programmes to encompass grassland areas and milk production in mountain areas, the outermost regions and other less favoured areas and to devote particular attention to them under joint research projects encouraging innovative solutions for these areas, bearing in mind the need to address the challenges of productivity and climate change; considers that this research should also seek to identify health benefits for consumers;

30.  Calls on the Commission to closely follow the development of milk production in these areas and to review the economic impact of the expiry of milk quotas on dairy farms in these areas; asks the Commission to submit to the European Parliament and the Council a report addressing this issue by 2017, accompanied by a legislative proposal if milk production has decreased significantly in these regions;

31.  Calls on the Commission to develop programmes in cooperation with producers, producers’ associations and marketing bodies – based, for example, on the fundraising model – to reduce the impact of the anticipated rapid decline in milk prices;

32.  Calls on the Commission and Member States to implement the EU school milk programme more efficiently and, in particular, to allow calls to tender to refer specifically to milk from mountain areas designated as ‘mountain produce’; also calls on the Member States to use short supply chains in the school milk programme, in order to stimulate local milk production and limit transport carbon emissions;

33.  Calls on the Commission, when drafting and implementing legislation in relation to the ‘mountain produce’ designation, to bear in mind the special characteristics of products with a protected designation of origin and covered by specific rules of origin, by considering the possibility of introducing flexible arrangements for mountain areas, which could, because of their specific disadvantages, such as the difficulties of producing fodder crops, be excluded from the schemes provided for under Regulation (EU) No 1151/2012, contradicting the aim of the regulation;

34.  Calls on the Commission and Member States to promote and support the incorporation into the production cycle of abandoned pastures, increasing grassland yields and the rational use thereof;

35.  Draws attention to the importance of measures to help young farmers and outermost regions start up in mountain areas, bearing in mind that the population in such areas is ageing at an above-average rate;

36.  Calls on the Member States to create the necessary framework to enable producers and processors in mountain areas and disadvantaged areas to access training courses and loans;

37.  Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ L 42, 14.2.2006, p. 1. (2) OJ L 94, 30.3.2012, p.38. (3) OJ L 299, 16.11.2007, p. 1. (4) OJ L 271, 30.9.2006, p. 63.