President. − The next item is the report (A7-0262/2011) by James Nicholson, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a regulation of the European Parliament and of the Council, amending Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector (COM(2010)0728 – C7-0408/2010 – 2010/0362(COD)).
James Nicholson, rapporteur. − Mr President, I am very pleased that we were able to reach agreement on the dairy package with the Council and Commission in December. In this regard I must thank my shadow rapporteurs for all the very hard work that they put in. We started off with – I think I can safely say – some very divergent views and positions, so it is a testament to their commitment that we found solutions to our differences and ways to incorporate each other’s point of view.
I must also thank the Council and the Commission, who at all stages of the process adopted a very constructive approach towards Parliament. This cooperation was what allowed us to achieve a deal at the end of the day. I was determined to get a deal on the dairy package agreed before we entered into the CAP reform and I am very pleased that we have achieved that. I would also just like to pay my own special thanks to those involved in the Polish Presidency for their hard work through the weeks and the months that we were working on this.
The dairy package was, to a large extent, a dry run for Parliament’s engagement in the CAP reform. It definitely gave us some insight as to how the process will evolve. Although of course the reform will be on a much larger scale, we must bear this in mind, and I think we all gained some valuable experience in terms of how we should go about finding our internal position within Parliament and also how best to negotiate with the other institutions. It is my belief that, in order for Parliament to influence the reform of the CAP to the maximum effect, we should learn from our experiences in working with this dossier.
So what does the dairy package contain and how will it impact on our milk producers? That is the question which everyone is, of course, very keen to know the answer to. From the outset I would say that this legislation will not solve all the problems of Europe’s dairy sector, but I do hope that the measures contained within it will primarily help to strengthen the bargaining power of dairy farmers.
The establishment of the EU-recognised producer organisations and the interbranch organisations for the sector is a step forward. Producer organisations will be able to negotiate milk volumes of up to 33 % of the national production. This is, I believe, a good balance between boosting their negotiating power and protecting against distorting competition. Producer organisations should help farmers to organise themselves better and strengthen their position in the supply chain, especially in Member States where a system of cooperatives is limited or non-existent.
The package also includes provisions for EU contracts to be implemented at Member State level. Some countries may choose to go down this route while others will not. This is likely to depend on the characteristics and the situation of each individual country’s dairy market, whether they are a co-op system or export-driven. The decision to impose contracts will be voluntary, which will give Member States the flexibility to choose what suits them best. If a Member State decides to impose contracts, those contracts must respect the conditions laid down by the regulation. These include the condition that the price, the volume of milk to be delivered and the duration of the contract are outlined in the contract.
One of the main points Parliament has achieved is in the article which allows for the regulation of milk supply for production or for PDO and PGI cheeses. We worked hard on this to achieve a balance between supporting quality production and making sure that we did not interfere with competition law or the functioning of the internal market. I am sure that my southern counterparts will have more to say on this issue and will outline how it will particularly help milk producers in their countries, which are those Member States which have high levels of quality production.
I would like to conclude by saying that I think we have ended up with a package of measures which are flexible. Although milk is produced in every EU Member State, each country has very different needs. There are Member States that would like to see quotas being retained past 2015, while others look forward to increasing production. However, no matter what the focus of the industry, we have a responsibility to ensure dairy farmers have the opportunity to achieve the best possible price for their milk. In this regard, I would urge producers to look carefully at the measures and take full advantage.
Dacian Cioloş, Member of the Commission. − (FR) Mr President, ladies and gentlemen, allow me to congratulate the European Parliament, and Mr Nicholson and the shadow rapporteurs in particular, on their constructive cooperation with the Council and the Commission, which allowed us to improve the Commission’s initial proposal and at the same time reach agreement at first reading.
We managed to reconcile the different approaches adopted at the start through an open discussion among the three institutions and a shared sense of the responsibilities involved, which did not lose sight of the actual aim of the exercise, which was to give the milk sector new instruments to ensure its sustainability and strengthen producer organisations in the sector.
The ‘milk package’ is one of the most important legislative acts in the agricultural sector currently being adopted at first reading under the ordinary legislative procedure established by the Treaty of Lisbon. In my opinion, it truly embodies successful cooperation between Parliament and the Council, which shows that it is not the ordinary legislative procedure that prevents us from taking important decisions quickly and coherently.
The ‘milk package’, as Mr Nicholson said, gives Member States the option of imposing the use of milk delivery contracts between producers and processors. This proposal also allows milk producers who so wish to organise themselves into producer organisations in order to consolidate their position in the food chain, notably through the collective negotiation of milk delivery contracts, which is clearly reinforced in the proposal. They may also be able to benefit from the option given to Member States to require milk purchasers to offer milk producers a contract with a minimum duration of six months. The final text also reflects the desire to take into account the specific nature of cooperatives, which was expressed by the high-level groups consisting of Member State experts.
The ‘milk package’ highlights the role that can be played by interbranch organisations that bring together around one table producers, manufacturers, traders as well as consumers with a view to improving the transparency of the milk supply chain and the mutual understanding of the role of each link in the chain. In another measure to improve transparency, the ‘milk package’ establishes the necessary framework for monitoring milk deliveries after the milk quota scheme expires by stipulating that the relevant data must be supplied in good time, thereby allowing the Commission to provide milk producers and actors operating in the milk sector with timely information on the market.
The ‘milk package’ will also play an important role in regulating the supply of quality cheese with protected geographical indications, which brings benefits in terms of added value and sustainability for vulnerable regions in particular.
I will end by pointing out that two dates have been set to assess the application of the provisions introduced by the ‘milk package’: the first for the end of June 2014 and the second for the end of December 2018.
By each of these dates, the Commission will present to Parliament and to the Council reports on the development of the market situation in the milk sector. The effects on producers in disadvantaged regions will be assessed in particular in relation to the general objective of maintaining production in those regions. We will also examine potential incentives to encourage farmers to enter into joint production agreements.
Michel Dantin, on behalf of the PPE Group. – (FR) Mr President, Commissioner, rapporteur, we have reached the end of our work.
Commissioner, we agree with some of the points you just made. There is one word, however, that I wish to highlight: the word ‘quickly’. I do not think that we can agree on that. It was in February three years ago that the milk crisis erupted or reached its peak. That is how long it has taken us to reach a compromise allowing us to offer milk producers new prospects.
I welcome the spirit in which we worked and congratulate our rapporteur, who, for this first, because it was a first for us to legislate together, enabled us to work in a spirit of genuine dialogue and with a shared desire to build something.
We are therefore offering producers a new capacity, that of derogating from competition law and organising themselves into stronger units. However, Commissioner, we all know only too well that this is just one stage, just one step, and that we have not yet found the real solution and the real tools to move beyond the era of milk quotas.
An exit phase should be prepared. That phase has not yet been designed. We have to continue to work on that aspect. As you said, we have not yet completely resolved the issue of vulnerable regions either. Even if we are offering them a tool, with the possibility of organising themselves better with the geographical protection mechanisms, we are still not enabling them to keep milk in those regions.
It is absolutely essential for the report that you are going to submit to us in 2014 to set out solutions that allow us to maintain this activity in vulnerable regions, where grass is often the only production and where milk is often the only way of making a living. Without it, all of the work and all of the hopes that we have put in this text will be in vain for many farmers.
Marc Tarabella, on behalf of the S&D Group. – (FR) Mr President, Commissioner, ladies and gentlemen, I, too, would like to congratulate the rapporteur, James Nicholson, in particular on his working method, which ensured that all of the shadow rapporteurs were involved throughout the procedure, which is not often the case.
Following often arduous negotiations, the Council and Parliament produced an agreement that, if not the most exciting, at least seeks to organise the milk sector. The decision to do away with the quotas by 2015 made a reform of the sector essential in order to avoid other milk crises, such as the one experienced throughout Europe in 2009, which has just been mentioned.
Like others, I naturally regret the decision to do away with quotas because this system of regulation – even if it is not perfect and has never been perfect – has on the whole worked well for 25 years, avoiding any major crises, and perhaps it only needed to be a bit more flexible.
Nevertheless, this new regulation is going to give milk producer organisations the option of collectively negotiating contract clauses and, in particular, prices. We have given them the tools they need to boost their position in the supply chain, derogating from competition law, and that was by no means a foregone conclusion.
Moreover, the Member States that opt to impose contracts in their territory will be able to set a minimum duration of six months, and six months is not bad compared to what the industry is currently doing, sometimes changing the price from month to month.
As far as the contracts are concerned, I would of course have liked them to be compulsory throughout Europe. That was not possible because it was opposed by a majority in the Council.
We should also highlight the positive move to recognise interbranch organisations, even if it is unfortunate that, as the fourth actor at the table, we did not include the public authorities, which should act as arbiter, like the Observatory on prices and margins, for example.
In conclusion, although this agreement is a step in the right direction, it could be improved by giving the public authorities back their role as regulator. We will see this again when examining the single CMO.
In addition to us as representatives, who put a great deal of work into this text, I would also like to pay tribute – and this is obviously a bit out of the ordinary – to Mr Baragiola, an EP official, sitting behind me here, who took part in all of our meetings and played a vital role. It is only right that we thank the officials, who work for this public institution. I did not want to miss this opportunity to do so.
Britta Reimers, on behalf of the ALDE Group. – (DE) Mr President, Commissioner, ladies and gentlemen, I would like to thank Mr Nicholson for his successful handling of the negotiations. We have decided on the abolition of the existing cost-intensive and market-distorting milk quota system and analysed the findings of the high level group for milk.
The dairy package that has resulted from the negotiations is an important first step towards a market and competition-oriented dairy sector. The formation of inter-branch organisations is being promoted, with these organisations to be given the ability to negotiate contracts on behalf of their members. The negotiating power of milk producers is to be bolstered – in future they will be able to negotiate on an equal footing, if they so wish.
It is also good that we will not be overshooting the mark. These contracts will not be permitted to make up more than 33% of the national and 3.5% of the European market. This ensures that there will be no new imbalance and that the necessary market freedom is retained. As there is no general requirement for contracts, farmers’ individual commercial freedom to make decisions remains secure. This is an important element of a functional market.
We in the Group of the Alliance of Liberals and Democrats for Europe will support the dairy package, and I ask you all to vote in favour of this package in tomorrow’s vote in plenary.
Martin Häusling, on behalf of the Verts/ALE Group. – (DE) Mr President, Commissioner, ladies and gentlemen, I have to say that the target has been missed, much as the approach taken was the right one. In contrast to the view expressed by Ms Reimers, I do not believe that the result here is a stronger position for producers. Producers are to be permitted to group together in up to 3.5% of the European market. Yet we already have dairies on the European market that make up over 6% of the total volume of milk. Is that fair? For me, the answer is a clear no. That would require higher collective volumes for the dairy farmers. We do have the contracts, and I agree that they are a good option. Yet we have left them as voluntary because a majority of the Member States did not want these contracts. This will make no difference on the market. There is hardly any mention of prices in connection with the contracts. At the end of the day, this will make no significant difference at all for many milk producers.
We had proposed that some consideration should be given to what will actually happen once the milk quotas have gone. We had proposed discussing a monitoring body in which the producers, the dairies, but ultimately also the European Union, consider quantity adjustment on the markets. Essentially, that too was strongly watered down.
I would agree that the milk crisis is behind us. I am fairly sure, however, that the next milk crisis lies ahead of us. We have strongly rising producer numbers, and we have falling prices. What will we do when the next milk crisis comes along? Will we once again use taxpayers’ money to pay export subsidies in order to remove volume from the European market? That cannot be a solution. We therefore call on the Commission to bring forward its report not due until 2014 to an earlier date and to bring to the table proposals for real solutions for the post-quota period. We need to discuss this.
I get the impression that many Member States are thinking of their dairy industries, but not their milk producers. This situation must change. With this package, we are not providing Europe’s milk producers with any really good tools or future prospects. Our group will therefore be voting against this package.
Janusz Wojciechowski, on behalf of the ECR Group. – (PL) Mr President, it is with a degree of sadness that I am speaking about the situation in the milk sector. Going back many years, I recall my home village, with hundreds of cows grazing on the meadows. These days, there are none. In many parts of my country, dairy farming has all but disappeared, and this is also the case in many other European Union Member States.
We, however, must do our job. We must prepare as best as we can for the abolition of milk quotas. We will certainly not be able to avoid crisis situations, of which we have already seen signs. However, Mr Nicholson’s proposal is a step in the right direction. The regulation of contractual relations is very important. Dairy farmers represent the weakest link, and their position needs to be strengthened vis-à-vis dairy processors, and it is in this direction that the proposal contained in Mr Nicholson’s report is heading. This proposal should be supported.
IN THE CHAIR: GIANNI PITTELLA Vice-President
João Ferreira, on behalf of the GUE/NGL Group. – (PT) Mr President, Commissioner, this proposal for a regulation does not resolve the fundamental problems in the dairy sector. It is a further step down the path of excusing the unacceptable and disastrous decision to abolish milk quotas in 2015 and that alone makes it already unacceptable. The rest is a fantasy that those preparing to approve this proposal have been selling to milk producers, whose situation is deteriorating by the day. It is fantasy that it is possible to guarantee producers fair prices in the free and deregulated market that they advocate. It is fantasy that the right of every country to produce as much as it needs can be guaranteed without instruments for regulating production. It is complete fantasy.
This path will boost the power of big business; of the major retailers and processing companies. It will further concentrate production with a few producers and countries, destroying it in other countries, where many producers will be ruined. It will continue to facilitate dumping between Member States and the flooding of national markets with imported milk. It will continue to promote intensive, export-orientated production that jeopardises food security and quality and environmental sustainability.
For all these reasons, what is actually needed is to reconsider reviewing the abolition of dairy quotas and their adaptation to the needs of each country and to the relative level of development of its productive capacity. It is important to have market regulation and intervention instruments that guarantee producers fair prices, taking production costs and retail prices into consideration, so that value added is distributed fairly along the sector’s value chain.
Lorenzo Fontana, on behalf of the EFD Group. – (IT) Mr President, Commissioner, ladies and gentlemen, first of all I would like to thank Mr Nicholson for his work, which has taken a long time, as well as all the shadow rapporteurs and his team, who have been very efficient.
I am here to support this agreement, which took a long time to reach, because I believe that the milk quota situation created enormous difficulties, at least as far as my country is concerned, and for producers in our part of the world in particular. I am very pleased that everyone here has been committed to defending producers, at least I hope that this will be the case, because it is what we were aiming for. We will know in the near future whether we have been successful.
In any case, we must not forget that at every meeting, including with the Council, Parliament’s objective has always been to safeguard producers. Therefore I hope that in the future we will be able to take action increasingly aimed at making very clear the importance of our production and our quality, which is the only way to ensure that our milk can be freely circulated and consumed by our market.
Diane Dodds (NI). - Mr President, firstly I want to thank the rapporteur, my colleague from Northern Ireland, Jim Nicholson, for all of his efforts in getting this report to this stage.
While we all recognise the issues raised by the high-level group and by this report, the elephant in the room remains, namely the question how farmers are to receive a fairer share of the profit within the supply chain, especially from retailers. Prior to the elections in 2010, the Conservative Party in the United Kingdom pledged to put in place a supermarket ombudsman. They have now been the lead party in our coalition government for almost two years and we still have no arbiter for fairness in this food supply chain in place. We need real, tangible progress on this now and such an ombudsman must have the teeth and power to deal with the unfairness within the market.
The report deals with the power farmers have in the supply chain, but I would raise concerns about the level of responsibility given to the Commission and the role of interbranch organisations. I feel that such organisations may well add another layer to the supply chain. Northern Ireland has a unique milk trading system and a cooperative structure, but also trades a large amount of milk with another Member State. Any organisation which would have jurisdiction in two Member States must not affect the current structure or disturb the balance in trading relations. Member States should be given the flexibility to decide what is best, in their own interests and in the interests of their producers.
Albert Deß (PPE). – (DE) Mr President, Commissioner, ladies and gentlemen, I, too, would like to thank Mr Nicholson for this report, which he wrote and on which he also led the negotiations in the trialogue. I would also like to thank all those who helped to bring this compromise about.
Commissioner, the direction is the right one, but the impact in the Member States will vary enormously. In Germany, this dairy package will have hardly any impact. We already have producer associations under our Market Structure Act. Many farmers in Germany are organised into cooperatives, which means that they already jointly market their milk and dairy products. Contractual dealings in Germany are regulated by statute. In the private sector, we even already have these supply contracts.
Unfortunately, this dairy package will not enable us to solve fundamental problems. This dairy package regulates dealings between producers and dairies. The biggest problem that I see, however, is in the relationship between the dairies and the retailers. This is not some kind of accusation against the parties involved. Nor, as landowners, are we responsible for this, but I ask you, Commissioner, to use your influence in the Commission to ensure that we regulate further issues on the basis of this dairy package, for example the issue of terms of payment for dairy products. It is not acceptable for farmers to deliver products to dairies – fresh milk expires after three days – and for the chain stores to only pay up after 60 or 80 days. Regulation is needed here.
A second point is the listing fees, the discounts, that have to be granted here. We need binding net-net prices in the dairy sector so that transparency prevails in the sector. The supply volume rules are not binding, the length of contract with fixed prices between dairies and retail must be regulated. There is thus still much to do. However, my group, the Group of the European People’s Party (Christian Democrats), will certainly be voting in favour of this dairy package with a large majority.
Luís Paulo Alves (S&D). – (PT) Mr President, Commissioner, the dairy package being presented here as an instrument for organising the sector includes positive and important elements, such as strengthening the role of producer and interbranch organisations, and contractual aspects, which could be a step forward in the relationship between producers and processing companies in some Member States. However, it leaves us a long way off the instruments that the sector needs in order to prosper in the coming years within a European agricultural framework where value is, as we would like, fairly distributed in the food chain, rather than a form of agriculture transformed into large-scale intensive farms concentrated in a few Member States.
While improving the self-regulation conditions in the relationships between sectoral stakeholders is desirable, thinking that this in itself is sufficient is a serious mistake that could drive thousands of milk producers, dozens of regions and even some countries out of dairy production. The debate on regulating the dairy sector with a view to an economically, socially and environmentally sustainable sector throughout the EU still needs to take place. Furthermore, we will not be able to abandon the milk quota scheme without ensuring effective instruments for managing supply.
George Lyon (ALDE). - Mr President, could I too offer my congratulations to my colleague Jim Nicholson for delivering the first piece of legislation under the new Lisbon powers. I just hope we make the same speed when it comes to negotiating the CAP as he has managed to achieve during the milk package.
I welcome the dairy package as a significant step forward in bringing greater transparency to the EU milk market; it makes it possible for dairy farmers to come together and have greater strength in the market place. Legislation provides for fair and open contracts and I hope they will help to eradicate some of the abuses in the dairy market. But as Jim himself pointed out, this is no silver bullet to solving some of the problems that there are in the market place.
Producers need to come together to use these powers if they are going to extract a better return. In the United Kingdom the coalition government has called on the dairy industry and the farmers’ representatives to agree a voluntary code of conduct and I welcome that initiative. However, the Minister should make it crystal clear to the dairy trade that, should they refuse to sign up to a voluntary solution, he will wield the big stick and use the contract powers in this legislation to compel them to do so.
One area I am still concerned about is the role of the retailers who are not covered by this legislative package. I think the Agriculture Committee in this House needs to look at this because there are still real concerns that retailers are abusing their dominant position in the market place.
Alyn Smith (Verts/ALE). - Mr President, I will add my own congratulations to our rapporteur, not – as he might suspect – through gritted teeth, but certainly through a sore throat.
It is right that we acknowledge that he has worked very hard to pull together some very divergent opinions on this issue, but in my Group we still diverge. We do not believe that this package goes far enough. There are some points to like, and there are others to be rather less enthusiastic about, because this is urgent.
The milk market is not working: it is not functioning in the best interests of our producers, our consumers or our wider society. In Scotland, we have seen a 7% decline in our national herd since 2007. We see systemic imbalances within this market, and even those who are in favour of this report are the first to admit that it is not a silver bullet. It is not going to solve all the problems. Perhaps we should come up with a better package than the one we have before us today.
That said, there clearly is a majority for this package. I am glad to welcome some elements of it. Reluctantly, we will not be supporting the full package, as I fear that it misses the point entirely and that we will all be back here this time next year wondering why so little progress has been made.
Julie Girling (ECR). - Mr President, I would also like to thank the rapporteur for his report. My constituency, the South-West of England, is the premier area for dairy production in the UK and, I think, one of the best in Europe. Our dairy farmers are forward-looking and increasingly efficient. Most welcome competition. They do not want or expect protection by market distorting measures. They expect support through sensible regulation.
However, it is clear that the balance of cost and income between producers, processors and retailers has become distorted over the years. This will not be solved overnight, but this report goes some way towards doing so. At a time when dairy farmers face increasing costs through, amongst other things, our demands from here on NVZs, greening measures, etc., let us look at the positive in this report: the ability of Member States to make decisions on contracts, and the flexibility that has been left there. Let us look at the positive and look forward to this being the first step towards creating value for farmers and consumers.
Csanád Szegedi (NI). – (HU) Mr President, ladies and gentlemen, the heart of the problem is the lack of balance between milk producers and milk processors. Unfortunately theirs is a subordinate relationship and, let us be honest, milk processors are exploiting milk producers. We have seen clear examples of just how far they will go in a price competition and what additives they will add to certain dairy products in order to be able to sell them at low prices. Using additives and then distributing their products through multinational chain stores throughout Europe they generate a price competition that will sooner or later result in us having to import even our milk from China, which will ruin European milk producers. It is therefore extremely important for us to urge milk processors to exercise self-restraint through the regulatory system as well. The solution and the keyword here is food sovereignty. Only through food sovereignty can we ensure that people have access to dairy products at low prices and that these products are of a high quality throughout Europe.
Mairead McGuinness (PPE). - Mr President, I would like to thank Mr Nicholson, the rapporteur, and all the shadows who worked on this.
This provides answers to some Member States and to the dairy farmers who have particular problems with private operators. For others there are no issues because there is a cooperative structure. I welcome this as an initiative – and might I suggest to Mr Nicholson that he should write the layman’s guide to codecision in agriculture.
I am concerned that, when we move on to these very large dossiers, it will be much more difficult – and I think Jim Nicholson is nodding in agreement – to come to a good outcome, but we live in hope.
The issues I want to raise today are wider than just the report that is before us – which I will be supporting – and relate to the report of December 2010 which spoke of the soft landing for the dairy sector. That report indicated that a soft landing may be not guaranteed in a number of Member States.
I rise on behalf of one of those Member States – Ireland – which has a problem in relation to this much promised soft landing. Dairy farmers in Ireland see a situation where their product is in demand, where Europe is below quota and where they would wish to be able to produce without a penalty. I know the position from the Commission on this issue, but I would ask – like other colleagues – that perhaps we need to bring a report forward from the 2014 date.
We need to consider the position of those Member States which are not enjoying a soft landing and where there are penalties being imposed on producers for supplying a product for which there is a market. The penalty is extremely severe, whereas Europe is actually not filling its entire quota over all of the Member States.
The last point relates to the power of the retail sector – not for this report, but an issue that will not go away – and I know the Commission will have something for us by June of this year.
Paolo De Castro (S&D). – (IT) Mr President, Commissioner, ladies and gentlemen, the measure we are about to approve represents the culmination of a process undertaken by Europe after the 2009 crisis in order to find solutions for stabilising the market and revenues of dairy and cheese producers.
The work and commitment of the European Parliament and our rapporteur Mr Nicholson, whom I must truly thank for his enormous commitment along with the shadow rapporteurs of this important report, have meant we have reached a rapid agreement on a text that improves the Commission’s proposal.
An important new provision is the possibility of managing and planning the volumes of certified quality dairy products. Such a tool is even more strategically significant at a historic time of prolonged and considerable market volatility, and we will consolidate it within the new regulations on quality agricultural and food products. The new possibility of involving representatives of the trade in interprofessional organisations is very important, as it will promote and consolidate positive links between all the components of the supply chain.
Today, Mr President, Commissioner, we are showing that Parliament knows how to face up to its responsibilities and work swiftly as a whole towards completion of the legislative process. This is our first testing-ground before the major challenge of the debate on reform of the common agricultural policy.
Liam Aylward (ALDE). – (GA) Mr President, firstly I would like to thank the rapporteur Jim Nicholson for the great work he has done on this report.
The crisis in the dairy sector in 2009 highlighted the severe vulnerability of this sector and clearly demonstrated that it is essential that a degree of stability and certainty is established for dairy farmers when quotas are abolished in 2015.
Just as my colleague Ms McGuinness has already said about Ireland, as we progress towards the abolition of quotas a very worrying situation is developing for dairy farmers, and the threat of a superlevy is present year on year. The Commission has conceded that, in Member States where milk deliveries exceed quotas, a soft landing may not be guaranteed. The milk quota for Ireland and the threat of a superlevy are hampering growth opportunities for the Irish agricultural sector. Overall milk production in the European Union is 6% under the quota, and it is an unsustainable situation that while Irish dairy farmers can meet the EU quota overall, due to inflexibility they will be penalised and the potential for growth held back.
Agriculture is currently one of the strongest sectors in Ireland, helping us out of our current economic problems, yet its potential is constrained with a one-size-fits-all policy that is not working for dairy farmers. It is clear, therefore, that there is no widespread political will to revisit the Health Check decisions, yet I would urge the Commission to consider measures to ensure a soft landing for all Member States and to consider introducing a degree of flexibility into the system for dairy farmers.
Hynek Fajmon (ECR). – (CS) Mr President, the European milk production sector has recently gone through a relatively difficult period, but this has also been the case for other sectors of the European economy. We are all well aware that, from 2008 almost up to the present day, there has alternately been either an economic or a debt crisis, which has inevitably had an impact on demand for milk and milk products.
As recent years have shown, even the European system of quota regulation in the milk sector has failed to head off the negative impacts of the crisis, and it is therefore time to abandon this obsolete system from the age of centralised planning definitively. Milk does not need any quotas in the EU, any more than buns, bread, cars or other commodities need them.
The transition to a quota-free market system should be as smooth as possible, and I therefore support the idea of Member States having the option of regulating contractual relationships in this sector as they see fit, but it must be done in accordance with the principles of the single European market. I therefore back the report by Mr Nicholson, as I believe it marks a step in the right direction.
Esther de Lange (PPE). – (NL) Mr President, this debate had gone on for almost an hour before we heard the two magical words ‘soft landing’. They are not to be found either in the Commission’s text or in the text of the agreement. However, I would like to remind the Commissioner of the following: at the time of the reforms in 2007 and 2009, when we voted definitively for an end to the milk quota and for greater market orientation, it was said that all Member States must have the opportunity to prepare themselves for the new situation, in other words to adapt gradually to the new system. Now we observe that, as soon as you opt for greater market orientation, you allow the market to play a bigger part, power is unequally divided when it comes to the food production chain.
This agreement is an attempt to strengthen the position of the primary producer, and to that extent it deserves to be welcomed by you. It does contain good elements, for which I congratulate the negotiators. But I also have my doubts about it. It concentrates on the relationship between farmers and processors, whereas the problems now often occur at a later stage in the production chain, with supermarket buyers and supermarkets themselves. That is where the big money is made; that is where, for a number of years, you have seen supermarkets make a profit of EUR 0.20 on a kilogram of young cheese and then a profit of EUR 1.20, six times as much, on the identical kilogram of young cheese two years later. Therefore, for the how-manyeth time, we are asking the European Commission: please have some concern for transparency in the food production chain, since it is a matter of where the power lies and how the profits are shared.
To conclude: this agreement is a good means by which certain Member States can prepare themselves for the new situation. I am thinking of mountainous regions, other disadvantaged regions, Member States with highly protected raw produce. But other countries will remain shackled to the milk quota system right up to the last moment and then have to pass over from the old to the new system from one day to the next. This is hardly the promised ‘soft landing’.
As Mr Dantin has said, it is a step forward, but, looking to the new situation that awaits us in 2015, we must make other steps forward too, and I hope the European Commission will do so without delay.
Estelle Grelier (S&D). – (FR) The decision taken under the French Presidency to do away with quotas risked leaving milk producers without any safeguards in the case of market disturbances. We therefore welcome the ‘milk package’ proposal as a first step in the right direction. It was necessary to strengthen producers’ negotiating power in relation to the private processing industry by encouraging them to group together and promoting the use of contracts, which are only used for half of all production.
My Socialist colleagues, especially Stéphane Le Foll, helped to improve the proposal by ensuring the future of milk production in vulnerable regions where cheeses with protected designations are made.
There is still a great deal to do, however. In particular, it will be essential to shift the balance back towards livestock farming and provide other market tools in order to prevent any further crises in the milk sector. We must take the opportunity presented by the CAP reform to supplement this mechanism so as to guarantee farmers’ income and once again put them back where they belong at the heart of the food supply chain and food safety in Europe.
Valdemar Tomaševski (ECR). – (LT) Mr President, Europe’s dairy sector will experience a major shift following the expiry of dairy quotas, which may upset the balance between farmers and dairy processing companies in terms of bargaining power. This may also lead to unfair commercial practices when setting farm-gate prices. Such a process would be of particular harm to small producers, especially in countries where there are many small farms.
It is precisely for that reason that the European Union should support cooperation between farmers and their organisation into producer associations and cooperatives. This would strengthen their bargaining power in future. Supporting cooperation is particularly relevant in Lithuania and those countries where farmer cooperation has not received adequate support. We will thus protect farmers from unfair competition in the dairy sector. I would like to thank Mr Nicholson for excellent negotiations.
Georges Bach (PPE). – (DE) Mr President, Commissioner, I support the compromise reached in the trialogue, which is aimed at strengthening the negotiating position of dairy farmers in relation to the processing industry, much as I am aware that it does not solve all the problems that dairy farmers currently face in many Member States.
Even 50 years ago, Commission President Sicco Mansholt envisaged preferential measures for the creation of producer communities within the framework of the common agricultural policy. In my country of Luxembourg, too, the dairy sector is the main pillar of our agricultural sector as a result of the high proportion of grassland. Our agricultural sector and our farmers long since understood that the best solution is to come together to form a cooperative that takes over the processing of the milk itself.
It was for exactly this reason that, in the Council, five Member States voted against the compromise, which does not live up to the requirement of being a soft-landing instrument. The Commission has the right of initiative when it comes to proposing legislation, and I would therefore like to call on it to put a legislative proposal to the Council and Parliament this year in order to remedy this clear and costly fault in the system.
A linear reduction up until 2015 in the super levy which is imposed on each litre of milk that exceeds the quota, or the abolition of the fat correction mechanism, could at least reduce the negative effects of the regulation, which is being phased out without detrimental impact on those Member States that are not affected. This dairy package is also the final report of the high level group that was to bring about a soft landing after the phasing out of milk quotas.
It is astonishing that there is absolutely no mention of milk quotas in this report. Young and ambitious farmers in Luxembourg and four other Member States who are attempting to prepare for the deregulation of the milk market and aiming to expand their production in order to be able to keep up on the global market after 2015 can only do so by buying additional quotas now, even this close to the abolition of the milk quota system. This is an unnecessary and enormous additional capital cost which puts them at a disadvantage in comparison with farmers in the other 22 Member States.
Sergio Gutiérrez Prieto (S&D). – (ES) Mr President, the Regulation we are debating today is not perfect. It alone cannot resolve the difficulties of a sector that has structural problems and also, because of the economic context we are living in today, problems relating to the current situation. Although it is not perfect, however, this Regulation is a decisive step forwards in the right direction.
The thing is that, even though we all realised some time ago that no market is perfect, we also realised there was a great need to include as many regulations and measures as we could to protect our farmers in this area. All this also impacts on people’s food security.
We also realised there was a great need for us to allow compulsory contracts for a minimum duration and a maximum amount, at least as a defence mechanism, because our farmers obviously cannot negotiate on the same footing as distributors, middlemen or collectors.
There is still much to be done. We will have to improve the security networks and make them quicker to react and more effective. We will have to work decisively to ensure that the sector is better coordinated within the value chain, verify that quotas are not being improperly distributed, especially in certain areas, and promote the quality policy.
With our positive vote, however, and everything that is still to be done, there is no doubt that many dairy farmers will today be able to see that Parliament has defended their most basic labour right – to be able to live in dignity on the earnings from their work.
Herbert Dorfmann (PPE). – (DE) Mr President, Commissioner, I would like to express my sincere thanks to the rapporteurs and the shadow rapporteurs. What we have before us is sound and necessary legislation. The aim of this legislation is to re-define and re-regulate the supply chain. For the first part of the chain – namely from the farmers to the processors – it will also succeed in doing so. It strikes me that what this legislation fails to tackle – and a few other Members have already said this – is the second part of the chain. What happens between the processor and the consumer? There are quite a number of unanswered questions in this regard. Some of these, such as cost-price selling, have been mentioned already, but there are many others, too.
That is why this package cannot represent a final answer to the abolition of milk quotas. In exactly the areas where the abolition of the milk quotas is difficult, which is to say in mountainous and disadvantaged areas, production is already organised into cooperatives, and little is likely to change.
What is positive and sensible in this legislation is the option for producer organisations and associations to apply special rules and supply management in relation to the protected designation of origin (PDO) and protected geographical indication (PGI). There are many organisations that need this, and in the wake of the debate about the quality package, this is the right approach to take. We should also implement this for other products in the quality package. In the end, what is right for milk can only be fair for other products.
Wojciech Michał Olejniczak (S&D). – (PL) Mr President, milk production is probably the most important sector within the entire common agricultural policy (CAP). The lion’s share of the CAP’s funds is spent on milk producers and dairy processing. For this reason, we should place strong focus on enabling the milk sector to develop further in a sustainable manner. Over the last number of years, we have accomplished a great deal, and these achievements have benefited not only agricultural producers but also consumers. To an extent, the solutions that are being proposed today meet the expectations of farmers and also of consumers.
I would very much like our future work to focus more on the development of cooperatives, however, and on structuring the milk sector on this management approach. It is beneficial both for farmers and for consumers. It is also extremely important to restore stability to the sector. This stability, which has been upset in recent years, needs the reinstatement of specific standards or norms which will apply for many years in the future.
Elisabeth Köstinger (PPE). – (DE) Mr President, Commissioner, I would like to thank the rapporteurs for their work. The milk package that we will be deciding on tomorrow, after prolonged negotiations, is something that I welcome in principle.
The aim is to strengthen farmers’ position in the value chain. Parliament acknowledges that farmers’ negotiating position in the milk market is too weak in comparison with the chain stores. Meanwhile even the consumers are aware that it is not the farmers who profit from any high food prices. The producer price, after all, is only a fraction of the retail price.
What we are deciding on tomorrow will neither improve the situation for milk producers nor provide a lasting solution for the highly sensitive milk market. Similarly, there is no way – and this idea was just mentioned – that it constitutes a soft landing.
The introduction of dedicated producer communities is something that each Member State must evaluate for itself. There is already a producer-dominated system in the form of the cooperatives. For many Member States it therefore makes more sense to continue to develop the cooperatives. Dairy farmers must be able to raise their market position to an equal footing. In mountainous regions, in particular, that will be the key issue. Many dairy farms in such regions specialise in high-quality production. That high quality needs to be worth it, however, and that is why the protection of European high-quality products is the primary objective.
It is important that the Member States should now also adopt these instruments. Doing so offers added benefit and promotes competitiveness, especially for the worst-affected rural areas. This milk package is a first step to supporting the stricken dairy sector. It does not, however, provide any real ways to solve the problem of the abolition of the milk quotas.
There is an urgent need for further measures to deal with this absolutely free market situation and the volatile prices. Instruments are needed that provide a solution for dairy farmers in all the Member States, that emphasise the value of the milk produced and that ensure a livelihood for farmers. Commissioner, the fight for a viable dairy sector calls for greater courage!
Ulrike Rodust (S&D). – (DE) Mr President, Commissioner, ladies and gentlemen, I welcome the approach taken in the regulation on contractual relations in the milk sector of strengthening the negotiating position of milk producers and ensuring fairer prices. It is important that we do not leave the milk producers high and dry once the milk quotas are abolished. Small and medium-sized family businesses, in particular, rely on the fact that they are supported by the European Union and not left unprotected at the mercy of the milk purchasers and retailers.
I would have liked for us to have introduced mandatory contracts at Member State level. However, the Council and the Commission fought tooth and nail against the idea. It is a shame that the Council is not here now. I believe that the compromise that has now been reached is acceptable, but it does not go far enough. Therefore, we must ensure that the interests of small and medium-sized milk producers, in particular, are taken into consideration in the upcoming reform of the common agricultural policy.
My main concern will continue to be fighting for a sustainable and multi-functional agriculture that covers the whole of Europe.
Maria do Céu Patrão Neves (PPE). – (PT) Mr President, the Commission proposal for the dairy sector is insufficient, particularly because this is an extremely volatile sector, which experiences cyclical crises and is being restructured with the announced abolition of quotas.
Regardless of the merit of the work of the rapporteurs and shadow rapporteurs, this report does not miraculously transform the proposal into one suited to securing the future of this sector. The dairy package is not a replacement for milk quotas. Ultimately, little has changed: contracts agreed in the past are now described as voluntary; despite their different natures in many of the Member States, cooperatives are treated as if they were all the same and excluded from the diary package, as if all reflected the real power of the producers. The concentration limits set out are now being exceeded and no mechanism has been specified to reverse this situation.
Without significant new guidelines for the sector; with many producers still paying the bank loans they arranged to purchase quotas, which appear to be worthless; with the sale price of milk falling; with dumping and cartels operating at distribution level; what is the future for regions severely dependent on dairy production, such as the Azores?
Zofija Mazej Kukovič (PPE). – (SL) Mr President, my sincere congratulations to the rapporteur and the coordinator for everything they have done to benefit farmers, who are actually the most vulnerable members of the production chain – the most vulnerable members with a high workload and a low income.
Even after 2015, we will still need to consider those who remain vulnerable, namely farmers in remote mountain areas.
Combining tourism with a healthy lifestyle, local food production and, in view of the lack of new jobs in the traditional industries, the conditions for enterprise and new employment, it is this very area, the area under discussion, that could provide a great opportunity.
Ricardo Cortés Lastra (S&D). – (ES) Mr President, Commissioner, some parts of this agreement are really interesting, for example countries being able to introduce obligatory contracts governing volumes and minimum duration, as well as prices.
These new contracts will also enable farmers and companies to set prices jointly, and will be valid for at least six months. It is true that this will give farmers more stability and greater benefits, Commissioner, but it is only a first step.
Commissioner, the truth is that the industry in this sector continues to take advantage of its negotiating position, dragging down farmers’ prices. This is bringing this sector to its knees, subjecting farmers to uncertainty and jeopardising their future.
Commissioner, I have been speaking recently to farmers in my region, Cantabria, and as you know very well the situation is very complicated, very difficult. I hope that more steps will be taken in future to really keep this sector going.
Miroslav Mikolášik (PPE). – (SK) Mr President, the milk and milk products sector has recently undergone significant changes, which were deepened by the financial and economic crisis. The high prices of inputs and the current decline in demand for milk products have led to reduced revenues for direct producers, but this has not been reflected in reduced prices for end consumers.
The insufficiently transparent functioning of the supply chain therefore has many inconsistencies that may indicate the existence of unfair trade practices at the expense of producers, but also at the expense of households at the end of this chain.
I therefore believe that, in creating prices, the milk products sector should reflect basic market signals, particularly those of supply and demand, consolidation of competition, and clarification of the fundamental rights and obligations of each actor; an improvement in awareness and responsibility should also lead to a fairer allocation of total revenues in the chain, and an improved, reasonable standard of living for dairy farmers.
Rareş-Lucian Niculescu (PPE). – (RO) Mr President, adopting the Milk package report marks a step forward for livestock farmers. It goes without saying that contracts, strengthening producers’ bargaining power, promoting interprofessional organisations and transparency are all necessary, but we must acknowledge that we are looking at only modest progress, which is not enough, whose actual outcome we cannot estimate yet.
Without rejecting either the need for or benefit of these measures, allow me to make some comments. First of all, the European Union is preparing for a future common agricultural policy, starting in 2014. This future policy must feature solutions for dairy farmers. I am talking about funds for modernisation, subsidies for land intended for grazing, as well as for setting up young farmers and measures to provide support in times of crisis. This is why we need a properly funded CAP.
Secondly, the need for regulation and supply management has been raised for discussion. In my view, it is not this that we need, but rather tighter control over relations across the production chain in every area of food production, in order to limit the abuses that everyone is familiar with, committed by distributors and retailers.
José Bové (Verts/ALE). – (FR) Commissioner, rapporteur, I would first of all like to congratulate Mr Nicholson on the courage he displayed when facing the Council and the Commission.
Nevertheless, I fear that the end result does not strike a balance between producers and manufacturers. This agreement reminds me of the children’s tale about a paradise where vegetarian lions would lie down with lambs and eat grass. I do not believe it for a second!
From 2003 Ms Fischer Boel did everything in her power to destroy the milk quotas from an ideological perspective. In October 2009, despite these efforts, the Court of Auditors recognised the effectiveness of the milk quotas. Today, however, we find ourselves in a situation that is going to be even worse and we can see what is already happening in Denmark, where the most solid farms, with rising production, are all going bankrupt, with a 40% reduction in land prices.
Do we want to see the same thing right across Europe? Surely not! We need to control production with the participation of the public authorities.
Jarosław Kalinowski (PPE). – (PL) Mr President, the objective of the milk package is to improve the functioning of the European Union dairy market following the abolition of milk quotas. This goal is to be achieved by strengthening the position of milk producers in relation to processors and collectors. The milk package introduces the possibility of collective bargaining as well as of establishing inter-sectoral organisations, and is aimed at improving transparency.
At this point, however, I would like to say that in practice, apparently superior solutions very often turn out to be inferior to the solutions already in place. It was not the quota system which caused the 2009 crisis. Milk quotas are a tested instrument offering guarantees and security to producers. In other areas, such as in banking, we are proposing greater supervision and regulation, while in the milk sector we are moving towards liberalisation. This, undoubtedly, will not ensure stability for our farmers, and will contribute to excessive concentration of production as well as to bankruptcy among many EU milk producers.
Andrew Henry William Brons (NI). - (opening words lost as microphone switched off) ...to oppose EU legislation in general and the CAP in particular. However in an area of current EU competence we would reluctantly support a measure that was unambiguously in the interest of a sector of the UK economy. To oppose it because we are opposed to EU membership would be to betray the interests of our fellow-nationals.
Nearly all UK milk producers already have written contracts, although it must be said that they do not generally meet the standards stipulated in this milk package. Dairy farmers do need to be able to cooperate on a sufficient scale to confront the cartel of milk buyers, to which they sell their milk, without fear of investigation by the competition authorities. The gap between farm-gate prices and retail prices must be narrowed. We are concerned about the abolition of milk quotas, which might lead to the competitive dumping of milk from one Member State to another.
The recommendation for improving transparency is limited to collating the volume of raw milk delivered to dairies. The UK is already more advanced in the collation of such market information.
Csaba Sógor (PPE). – (HU) Mr President, I too would like to welcome the report of Mr Nicholson, even more so because the motions for amendment drafted by him and endorsed by the Committee on Agriculture and Rural Development seem to take into account the interests of milk producers in the new Member States as well. I agree with the statement that the European dairy sector will experience a major shift after the expiration of quotas in 2015. I would like to stress that the shocks accompanying this shift will be felt even more acutely in the eastern part of Europe. In this context I would like to call to the attention of the Commission and Parliament the fact that in these countries more emphasis could perhaps be placed on the creation of producer organisations, because here producers are often in a bargaining position of complete vulnerability vis-à-vis buyers. This does not support the fulfilment of common agricultural policy goals.
Ana Miranda (Verts/ALE). – (ES) Mr President, the reform proposed by the Commission will not resolve the dramatic situation faced by many European dairy farmers, for example in my homeland, Galicia, because production is still concentrated in large industrialised farms, which are causing an enormous social, environmental and regional disaster.
In some cases, previous agricultural reforms, particularly in the milk sector, have brought about a modernisation of the sector. With the current fall in milk prices, farmers cannot cope with this either. A compulsory interprofessional milk sector association will be needed in each Member State, bringing together professional farming organisations, the milk industry, cooperatives, distributors and consumers.
Public administrations must support these representative milk groups, which will obviously be much broader in scope than the idea of a simple contract between large companies.
End of the catch-the-eye procedure
Dacian Cioloş, Member of the Commission. − (FR) Mr President, allow me to make a few comments following the debate on this proposal.
Some of you pointed out that the milk quotas have been eliminated and that we should keep them. I would remind you that the 2009 milk crisis happened when we still had quotas. That shows that the existing quota system is no longer a solution in the current market conditions. That is why the Council decided in 2008 to put an end to that system. Therefore, the Commission no longer has anything to do with it. It is a Council Regulation that has ratified the decision.
I am very well aware that this milk package may not resolve all of the problems in the milk sector, but we wanted to act as quickly as possible. Mr Dantin said that he did not agree with me about the word ‘quickly’. I feel, however, that we have acted quickly given that the High Level Group presented its conclusions in spring 2010. The Commission presented its legislative proposals, after its entire internal procedure in autumn, at the end of 2010. We are now at the start of 2012 and, following a codecision procedure, are about to reach the end of the process.
In this ‘milk package’, the Commission has proposed, and I have undertaken to present a progress report in 2014, analysing again the situation in the milk sector and market before the milk quotas end in 2015, and determining, on the basis of that report and analysis of the market situation, whether any additional proposals need to be presented.
Some of you highlighted the problem of cooperatives. As Mr Nicholson said, cooperatives receive special treatment because the aspects of the proposal that do not directly concern them are not applied to them. Cooperatives per se are a solution that individual producers did not have because in that context the producers were themselves also responsible for processing.
As regards what is known as a soft landing, in other words the phasing-out of milk quotas, some of you again stated that the Commission was not pulling its weight and that it did not want to present any other proposals. However, it is always the farmers, and even some of you, who say that a certain degree of stability is necessary sometimes to be able to plan, to some extent, for the medium term. When it comes to the soft landing, gradual increases in the quotas until they are stopped in 2015, the Council took a decision in 2008. There is thus no reason now for the Commission to seek to overturn, just a few years later, a decision taken by the Council.
As regards the transparency of the food chain and the negotiating relationships between producers, processors and retailers, I would remind you that the Commission has set up a forum on the food supply chain, which is currently examining all of these issues. The Commission has decided not to submit any legislative proposals before listening to the actors in the food chain and before allowing the actors to talk to one another and submit proposals, so as not to regulate further when the problems can be resolved in other ways. At the last meeting of this food chain forum, the Commission stated clearly that in June of this year it would take stock of the work done by the forum and, in particular, the proposals submitted by the actors in the food chain. On that basis, the Commission will appear before Parliament and before the Council with a report and, if necessary, proposals in that area.
Once again, I thank you, and Mr Nicholson in particular, for your efforts to conclude these negotiations and get us to a point where these Commission proposals can be adopted today.
James Nicholson, rapporteur. − Mr President, first of all I would like to thank all those who took part in the debate: those who were very constructive and those who were less constructive. I take all the points of view on board, but I think I can simply say we have got the best deal that was possible at the time.
Milk quotas have been with us for thirty years. They have done a tremendous job throughout the whole of the European Union during that time, and let us hope that this new package will do an even better job. That is what my hope would be.
I share the concerns of those who come from disadvantaged areas and from mountainous regions; those are the areas which I think could be seriously affected by this move. It is for that reason we have enshrined in this report that the Commission will report by 2018. I will bring to the next coordinators’ meeting of the Committee on Agriculture and Rural Development the proposal that next year the Committee on Agriculture will consider doing an own-initiative report on the effects of milk quotas going away and maybe hurting those particular areas.
Can I also deal with one other point and that is the ‘soft landing’ part raised by Mairead McGuinness and Esther De Lange. I had two amendments – one from each of them – that I kept to the very last moment, and I can assure them that if I could have done anything about it I would. However, it was not within the realms of the possible. One of the difficulties when you make a piece of legislation is that you cannot put everything into legislation, and that is something this House has got to get used to as we go into the reform package.
Can I leave you with one particular appeal: we have set out here the rules for the producer and for the processer, but the elephant in the room is not here and we have no law over him and that is the retailer. Until we deal in this House with the retailer there will be problems not just for milk but for other areas.
Can I also leave with this appeal to the producers and to the processers: to work together, to cooperate and give strength between you. Then I believe there will be a good future for the dairy sector throughout the whole of Europe.
President. − The debate is closed.
The vote will take place tomorrow (Wednesday, 15 February 2012).
Written statements (Rule 149)
Arkadiusz Tomasz Bratkowski (PPE), in writing. – (PL) In relation to the decision of the Council of the European Union regarding the abolition of milk quotas, I would like to stress my position on the need to maintain the milk quota system after 2015. This instrument has already fulfilled its role in the past, by stabilising supply and demand in the milk market and at the same time guaranteeing sales for producers operating in the market. An annual increase of national milk quotas would, consequently, help prepare the sector for the abolition of restrictions in the area of milk production. In this context, Poland is already prepared for such a situation, both in terms of organisation as well as production potential.
On the basis of the experience in 2008, however, concerns remain as to the possibility of another collapse in demand in the milk market and related lack of sales of surplus product. Moreover, I would like to remind you that the deadline for the abolition of milk quotas has already been changed in the past, for many different reasons. Consequently, taking into consideration the situation of farmers and the desire to provide them with a guarantee of work in a stable environment, it is my hope that more and more countries will support my position on this matter.
Robert Dušek (S&D), in writing. – (CS) The draft regulation on contractual relationships in the milk and milk products sector responds to the complex situation in the milk market, fluctuating prices and unfair negotiating practices in relation to the price of milk purchased from farmers. In order to ensure sustainable development of milk production and to guarantee producers an adequate living, it is vital to take steps at Union level to ensure a fairer distribution of profits within the supply chain. Agriculture is the most strategic sector in the EU generally, and it is absolutely essential to look for and identify support options. If our farmers cannot make a decent living, they will cease agricultural activities and we will all be dependent on supplies of food from the outside world. In view of the future global food shortages that would be a huge risk, which the EU must not take. We are proposing that milk producers come together in large units and cooperatives. I would like to point out that we have been successfully dismantling such large farming enterprises in the countries of Central and Eastern Europe over the past 20 years. Small-scale independent farmers were presented as the successful model of the West. I do not believe that any minimum contractual commitments between milk producers and dairies will help to resolve the situation. We should consider setting minimum purchase prices for raw milk throughout the EU, particularly for the winter and summer periods. We must not shrink from this bold step forwards!
Jim Higgins (PPE), in writing. – I supported this report, which strengthens the bargaining power of dairy farmers by allowing farmers to negotiate collectively their contract terms with dairies, including the price. This report also allows us to outline once again the dire need for a soft landing for dairy farmers ahead of the lifting of milk quotas in 2015. I am calling for a flexible approach to the quotas and the application of pan-EU quotas. In the last two years Ireland narrowly avoided the imposition of fines. The last thing we want to do is fine progressive dairy farmers who are planning for expansion, growth and investment post-2015. The EU as a whole was 5 % under quota in 2011; punishing productive countries simply does not make sense at a time when the EU has a milk deficit of 7 %.
Csaba Sándor Tabajdi (S&D), in writing. – (HU) The milk crisis of 2008–2009, which brought producers to the brink of poverty, must not be allowed to repeat itself. Based on the data of the Hungarian Dairy Products Council, two years ago milk that was sold in Hungarian shops at HUF 109 a carton had been bought up at HUF 9 per litre. The report also addresses the issue of preventing producer organisations from obtaining monopoly positions both at national and European level. Fixing buying-in prices for half-year periods will help eliminate the price fluctuations afflicting producers. This is a vital step to take before the 2015 abolition of the milk quota system. I find it unfortunate that the Commission and Council did not consent to making contractual relations mandatory. Despite the fact that Hungary boasts 1 million hectares of pastureland its milk sector still lacks competitiveness due to the climate conditions of the Carpathian Basin. Due to the prevailing rainfall patterns, milk can be produced far more cost-effectively in Poland, Slovakia or Germany, and the regulation of contractual relations would therefore be essential for Hungarian producers. High feed prices and the increased taxes, labour costs and contributions that are a result of the measures introduced by the Fidesz Government make it impossible to make an honest living at current commercial ‘delivery price levels’. The Hungarian people should once again be convinced of the necessity of standing united. Cooperative societies are not the devil’s work; they have a decades-long history in several Western European countries. They are a means for producers to protect their interests in relation to the processing industry and supermarkets. I am hopeful that the Hungarian Government will undertake voluntarily the commitments required by EU law.