Verbatim report of proceedings

Thursday, 17 September 2009 - Strasbourg

2. Crisis in the dairy farming sector (debate)

  President. – The next item is the debate on the oral question to the Commission (B7-0208/2009) by Mr De Castro, on behalf of the Committee on Agriculture and Rural Development, on the crisis in the dairy farming sector (O-0085/2009).

  Paolo De Castro, author. − (IT) Madam President, Commissioner, ladies and gentlemen, the dairy farming sector is going through one of the deepest and most serious crises of the last few decades: the fall in the price of milk and the more general crisis in the dairy farming market have now become a source of concern throughout Europe. This is a cyclical crisis, caused by the difficult economic situation, which has led to a decline in milk consumption and created stagnant markets, with the prices paid to producers in free fall.

The prices paid to milk producers have plummeted everywhere, averaging 24 cents per litre within the European Union. Many economic operators are in an even more serious situation, as they get prices of less than 20-21 cents, when their production costs come to at least 40 cents per litre.

Other markets, such as the cereal, olive oil and fruit and vegetable markets, are showing some alarming signs too. On this front, first of all, we should continue to make use of all the measures at our disposal so as to stabilise the market and to stimulate an upturn in consumption, but at the same time we need to be able to look to the future with medium- and long-term policies and to do everything possible to identify acceptable and lasting solutions aimed at minimising the risk of price fluctuations.

In this context the Commission proposals extending the intervention period for butter and skimmed milk powder have been welcomed and accepted within the Committee on Agriculture and Rural Development, as the unanimous vote of 2 September demonstrates. We believe, however, that these proposals are not enough to mitigate the serious consequences of the crisis in the sector. That is why, still in relation to the adoption of the European Commission’s proposal, the Committee on Agriculture and Rural Development has adopted an amendment to my proposal that also reintroduces aid for private storage of cheese, which was abolished under the health check on the common agricultural policy in November 2008.

This was a unanimous decision, Madam President, Commissioner, representing what are, in essence, identical views shared by the members of the Committee on Agriculture, which I have the honour of chairing, and expressing our desire to send out a strong signal to the Council and the Commission at a sensitive time for an extremely important sector for European agriculture.

As well as being a first important demonstration of the positive leadership that we as the European Parliament want to provide when looking ahead to codecision in agricultural matters too, this is a measure that can also offer immediate help to dairy farmers, who are grappling with an increasingly difficult market and with an obvious and dramatic fall in sales.

However, these initial measures, on which we will vote today, are not enough to support the producers in crisis, and that is why the Committee on Agriculture, through an oral question and a resolution on which we are preparing to vote, is calling on the European Commission to introduce new and effective measures to combat the crisis and to support the sector.

We want to encourage and at the same time support the European Commission in the process of deciding what must be done to end the crisis in the European dairy farming sector once and for all. In this sense we hope that the Commission will provide an exhaustive answer to our questions and will take our proposals seriously, so that interinstitutional cooperation produces the results that European agriculture deserves and shows its solidarity by offering practical support to European farmers in crisis, who need our help today.

  Mariann Fischer Boel, Member of the Commission. − Madam President, would you allow me to use a bit more than the three minutes’ speaking time allocated to me, because on this important and serious issue I think three minutes would not actually be sufficient.

First of all, I would like to say that I am very happy with the questions put by the Committee on Agriculture, because this gives me an excellent opportunity to clarify the actions that have already been taken.

Let me also thank Parliament for its ongoing work in this area. We are all committed to finding solutions. You are, and so am I.

Not everyone agrees with my preferred solutions, but I strongly believe that these solutions are working, that they will work, and they are also solutions that we can defend politically.

Mr Paolo De Castro asked on behalf of the Committee that we say what we are actually doing. The top line is good news: prices are improving. For example, in the course of one month butter prices went up by 4% in France, 8% in Germany and even more in the UK.

Skimmed milk powder also went up by 4% in France and Germany, and 2-3% if we look at the average all over Europe.

Average milk prices have been going up, and Albert Deß just told me this morning that the spot market prices are now at 30 cents in certain areas.

We can see that intervention buying on cheese has almost stopped because the market price is higher than the intervention price, which is another positive signal.

We are not yet where we want to be, but we are heading in the right direction. This makes me more confident than ever before that the policy approach that we have been taking from the very beginning is the right one.

You know the key elements of what we have been doing. We have been using all the market measures available and here we expect to spend approximately EUR 600 million over a 12-month period.

We have indicated the possibility for Member States to start the direct payment of the single farm payment to farmers from 16 October instead of 1 December, and we decided under the 2003 reform to decouple the dairy premium – EUR 5 billion every year – and transport it directly into the single payment scheme.

We have the recovery package and the decisions taken in the health check that provide another EUR 4.2 billion to face the new challenges, including restructuring in the dairy sector. All this of course is on top of what we can do under the rural development policy.

Just for clarification to Paolo De Castro, intervention for cheese was actually abolished in 1994. I think there must be some confusion between intervention and private storage because private storage was abolished by the decisions in the health check.

As I said, our current approach seems to be working. I am therefore more determined than ever before not to go back to the future in ways which would hurt our dairy sector in the long term and leave our farmers without any kind of predictability.

In other words, making a U-turn on the health check decision is not an option and something that the European Council, the heads of state, explicitly asked me not to do.

So, the idea of keeping the quota system after 2013 is not on the table. Freezing quotas is not on the table, and neither is any return to the use of certain expensive but inefficient market instruments of the past. They are not on the table.

This certainly does not mean that we have now done the job in terms of policy. I think it is time for further action. We need to follow up on the dairy report from this July, use the measures in there and then decide on other actions for the longer term.

If I could start with the report, I will look first at state aid. The report floated the idea that Member States could temporarily offer aid of up to EUR 15 000 for farmers under this temporary crisis framework. The Commission has actually already launched the boat and expects to change the rules in the coming weeks.

The second point is streamlining the procedures for responding to prices in the dairy sector. At this moment, milk is not actually included in Article 186 of the single Common Market Organisation which allows the Commission to take temporary actions quickly under its own power during times of market disturbances. I am therefore proposing that we include the dairy sector in Article 186, and this will enable us to spring into action in the future if we hit serious problems in the dairy sector.

For example, our recent extension of intervention had to be approved by the Council, and Parliament voted on this as well, but, if the dairy sector had been included in this Article 186, we could have acted immediately.

More generally speaking, we could with almost immediate effect mobilise measures stimulating demand and/or we could limit the marketing of milk, and all this would only be put in place on a temporary basis and under the condition that we had the necessary financing available.

The third follow-up point from the report concerns the buying-up schemes by Member States. One way to restructure is that Member States can actually buy quotas from farmers and put these quotas into the national reserve.

As you know, the national reserve counts in a sense as part of the Member States’ total quota, so if individual producers go over their quota, but Member States as a whole do not exceed their quota, with the national reserve included, then no super levy is actually paid.

What I intend to propose is that bought-up quota kept within the national reserve will not count as part of the national quota when it comes to deciding whether we have to add or to ask the farmers to pay the super levy or not.

If the super levy should then be collected anyway, then the part corresponding to the bought-up quota could then be used for restructuring. It might sound a bit complicated, but it is actually a very efficient tool.

All of these steps are actions that we are taking now with an almost immediate impact on the markets, but we also need to do something about steps for the medium and longer term. I would like to thank France and Germany here for their ideas and their input on these different possibilities.

The first longer-term issue is about using contractual relations between milk farmers and the dairy industry to better balance supply and demand in the dairy market.

I believe that this is a much, much better approach than the quota system, and it already works in parts of the European Union.

Milk producers and dairies have clear agreements which remove a lot of the uncertainty. On the other hand, some Member States simply do not use this possibility, but this can be changed by looking for a legal framework for these contractual relations, whilst clearly safeguarding fair competition.

The second long-term issue is about the balance of power, and you know that we have had this discussion a lot of times. We need to be able to see within the whole chain from primary producer to supermarket chains where the added value is disappearing.

We will look into future markets as well and, finally, I think a lot can be done on production costs and innovation.

In order to deal properly with all these ideas for the medium and long term, I want to establish a working group with experts from the Member States and the Commission so they can go to the heart of these issues.

For me, the problem in the dairy market is not only an issue between the Commission and Member States. Parliament actually plays an important role as well, and I am looking forward to the discussion here today on this important issue.

Thank you for being so patient.

  Albert Deß, on behalf of the PPE Group. – (DE) Madam President, Commissioner, ladies and gentlemen, it is, of course, extremely difficult to summarise this problem in two minutes, but I will try to do it in the style of bullet points.

The dairy sector is in trouble. Many dairy farmers are seeing their very existence under threat. The main reason for this is a huge drop in milk product sales. The Commission really should have acted more swiftly in this regard.

I would also have preferred to see stronger sales promotion measures instead of a greater amount of intervention, such as butter fat being used once again in the ice cream industry. Last year, when the price of butter reached more than EUR 4 for a short time, a large proportion of the ice cream industry stopped processing butter fat. I know the figures for Germany, which show that around 100 000 tonnes is no longer being processed by the food industry, which corresponds to a million tonnes of milk. We must try to stimulate sales once again, in order to clear these quantities from the market.

I would like to thank the groups that have helped in drawing up our joint motion for a resolution. Unfortunately, the Group of the Greens/European Free Alliance did not participate in this discussion.

Commissioner, as a short-term measure we are calling for an increase in the de minimis subsidies in an additional motion which is being tabled with 40 signatures, because this would be an opportunity to help the smaller dairy farmers in particular. It would also make sense to introduce an early retirement regulation. I know a lot of farmers who are 58 years old and who would like to stop working soon. An appropriate regulation would be needed for this.

Commissioner, I would like to thank you sincerely for your work. I would ask you to put in place appropriate regulations to improve the situation of our dairy farmers. Perhaps you will still have the chance to remedy this situation in the near future.

(The President cut off the speaker)

  Luis Manuel Capoulas Santos, on behalf of the S&D Group. – (PT) Commissioner, the Commission and the Council have taken a long time to react to the serious crisis affecting the sector. We are all agreed on that. The terrible situation the sector is facing requires swift, decisive action, or we risk seeing the ruin of many thousands of farmers throughout Europe.

My political group has made a great effort to enable us to reach the compromise contained in the resolution we are discussing here today. I hope the proposals merit your attention, Commissioner, because only by acting to reduce supply and simultaneously stimulate demand will it be possible to restore market equilibrium and bring prices up to profitable levels for producers.

I regret that the compromise did not include the temporary suspension of increased quotas or the introduction of a likewise temporary premium to reduce production. The measures we propose are, however, a useful contribution for overcoming the crisis more quickly. It remains for you, Commissioner, to duly follow them up.

  George Lyon, on behalf of the ALDE Group. – Madam President, as we have heard from other speakers, there is a crisis in the milk sector. There is no doubt that we must take action to alleviate their pain, but let me make it very clear that this is a short-term crisis which requires short-term market measures by the Commission, as outlined in the resolution.

Let us also be clear that, for too long, European consumers have paid for a dysfunctional agricultural policy which has failed both farmers and consumers. This crisis should not therefore be used as an excuse to turn our backs on the road to further reform and liberalisation of the CAP. That is why we have tabled amendments to this effect and why I welcome your reassurance on this matter.

We also want to see the Commission focused on sorting out the market, which is clearly failing. Consumers are losing out as they fail to get the benefits from the fall in milk prices. Farmers are losing out because they do not receive a fair share of the retail milk price. We welcome the Commission’s investigations into the food chain but, Commissioner, we want you to go further.

Will you commit to action that will root out supermarket abuse of their monopoly positions? Will you commit to a competitive market that allows producers a fair share of the cake, and will you commit to a functional milk market that gives a fair deal to farmers and a fair price to consumers?

I look forward to your response, Commissioner.

  José Bové, on behalf of the Verts/ALE Group. – (FR) Madam President, Commissioner, ladies and gentlemen, for months now livestock farmers have been warning the Commission and the Council of the gravity of the crisis. Tens of thousands of jobs have been destroyed in rural areas. The European Union had counted on growth in world demand. Its experts got it very wrong. The financial and economic crisis that we are experiencing has direct effects on agriculture and consumption.

The decision by Mrs Boel, Commissioner for Agriculture, to maintain the increase in quotas and the Council’s wish to dismantle them by 2015 are a provocation to milk producers. Times have changed. European policy must be adjusted to suit a new global environment. The milk prices imposed on producers do not cover production costs. On each litre of milk, some small farmers are losing up to 30 cents. At the end of the year, many of them will not have made a single euro, or will even have lost money. Some of them, too, as we are told by regional officials, are today going so far as to take their own lives.

In the face of this unprecedented crisis, the European Union must take significant steps, quickly. We call upon the Heads of State or Government who are meeting this evening to prepare for the G20 to place the issue of the dairy crisis on the agenda for their meeting, so that appropriate steps can be taken to respond to livestock farmers.

The European Union must boost the negotiation capacities of dairy farms, so that they are no longer subject to the dictates of the agri-food industry. It should also put in place a safety net to guarantee a remunerative price so that the price never falls below the production costs. The European Union must put a stop to its export refunds programme. It has just committed the enormous sum of EUR 480 million, adopted with the backing of various parliamentary groups from both the right and the left, in order to sell its surpluses cheaply on the world markets. It is destroying hundreds of thousands of farming jobs in the south and is cynically pushing farmers to move off the land or to immigrate.

Above all, the European Union must immediately make drastic reductions, of 5%, in European milk quotas, in a way that is inversely proportional to the volume delivered by small producers, in order to swiftly re-establish a balance between supply and demand. A laisser-faire policy is unacceptable. It has terrible consequences in terms of employment and land use patterns.

Without the small farmers, there will be no Europe.

  James Nicholson, on behalf of the ECR Group. – Madam President, I feel very strongly that the Commission was very late in acting on this particular problem. They sat on their hands for too long, and many farmers have suffered grievously for that. We can either decide to help the industry, or we can decide that we will ultimately let our farmers go out of business: then we can import from abroad with all the problems that brings us.

I welcome your remarks for the future, Commissioner, but I am not happy about your remarks for the short term. I think we need to do more in the short term to help the industry through this present crisis. Those short-term measures require immediate action.

Of course I remember the time of the milk lakes and the butter mountains, and I do not want to go back to that. I do not think anybody in the industry wants to go back to that situation: neither the farmer, nor the processors, nor the Commission nor we in this Parliament. We do not want to return to that, but one of the main problems I see at this moment in time is that, while the farmers have taken a drastic reduction in what they are receiving for their milk, consumers are paying almost the same as they paid before.

Until we tackle the power of the supermarkets in this area we will not have the answer. They have to be controlled. We need an ombudsman, someone who can tell the supermarkets that they are acting beyond their remit, that they are ripping the people off, ripping the farmers off and putting them out of business in the process.

  Ilda Figueiredo, on behalf of the GUE/NGL Group. – (PT) Madam President, once again I can only regret the positions adopted by the Council and what has just been said here by the Commissioner, who persists in not getting to the bottom of the issue and not recognising the need to review the decisions reached on the dismantling of milk quotas. Instead, she wants to continue deregulating the sector against the farmers’ best interests.

We therefore insist on supporting the need to maintain the quota system, albeit with readjustments to adapt them to the needs of each individual country, including the scrapping of the annual 1% increase until 2015. Does she not believe that, at a time of such serious crisis in the dairy sector, what is more important than deregulation of the sector and liberalisation of international trade is support for agriculture and the dairy sector in the Member States, so as to promote rural areas and employment with rights? Does she not consider it essential to create an extraordinary support fund for the dairy sector at Community level, benefiting the most affected producers and countries, and to define new forms of aid for milk and meat production? I consider it necessary.

  Giancarlo Scotta', on behalf of the EFD Group. – (IT) Madam President, ladies and gentlemen, I wish to stress my doubts about the proposal to extend the 2009-2010 intervention period for butter and skimmed milk powder, since this proposal is in danger of turning short-term measures designed for the current crisis in the market into structural measures that would actually restore the dairy farming sector to the position it was in before quotas were introduced.

In an effort to make the market measures more balanced, where benefits are not given solely to those Member States involved in butter and skimmed milk powder production, I call for the reintroduction of Community aid for private storage of cheese with a long maturation period.

Lastly, I would like to draw your attention to the matter of the origin marking and labelling of dairy products and to the traceability of products: this is a request that comes directly from European consumers – in ever greater numbers – and one that might help us to tackle the crisis in the dairy farming sector. I hope that my fellow Members from the other groups, too, can endorse this proposal.

  Diane Dodds (NI). - Madam President, I would like to thank the Commissioner for her words to us today. In my country, in Northern Ireland, the dairy sector is of vital importance. When the dairy sector struggles, the rest of the rural economy struggles. Currently dairy farmers receive just over 20 cents per litre for milk amid escalating costs. In Northern Ireland not only have they had to contend with poor milk prices and high costs, but we have suffered a third consecutive wet summer and this has had a devastating effect on the dairy industry in Northern Ireland.

It was distressing last night to see farmers in Belgium so angry and feeling so helpless that they are spraying milk onto their fields in protest at the poor price of milk and the difficulties that they too are encountering. The Commission has taken welcome steps to put a base on the market but we cannot sustain prices at an uneconomically low level.

I call on the Commission to take short-term measures to help: measures that will increase demand for milk; measures that will cut the cost of production; measures that will address the supply chain with its decreasing farm-gate prices and high supermarket prices; and measures that in the long term will create a sustainable industry and a future for young farmers who are experiencing severe difficulties with low prices and high bank charges.

  Mairead McGuinness (PPE). - Madam President, when farm women start protesting you know there is a serious difficulty. At the weekend I met a group of Irishwomen called ‘Farm Women for a Fair Price’ and I think we should note the words ‘fair price’ because producers are not getting a decent or fair price – and that is what this debate is about.

It would be churlish not to welcome the comments from the Commissioner about a stability coming into the market place, although at a very low level, and I acknowledge that the Commission has taken steps and spent money to bring stability to the market place. It is just that it is not enough and it did not happen quickly enough and we have a severe crisis.

I want to say that, in relation to the future, your comments are particularly welcome. I am worried that this House is divided on the issue of milk quotas because when we have codecision, if the Lisbon Treaty comes into force, we are going to have to think more coherently as a group and give clear signals to farmers rather than divided messages, so let me repeat that your comments about making links between producers and processors, about production levels, are something we need to explore, something we have to have a further debate on.

But we need to ask you, Commissioner, what type of market support measures do you think will exist in the absence of quotas that can ensure a fair and decent price to our producers? And, also, please tackle the marketplace: it is not working. Everybody says they are making no money from milk, including the supermarkets –which I doubt profusely – but we need more clarity, and we need fairness for farmers.

  Stéphane Le Foll (S&D). – (FR) Madam President, Commissioner, I will be brief.

I think that there are two parts to this debate. There is the immediate question of how we can extricate ourselves from this crisis. All measures, ranging from assistance for farmers to intervention measures, are necessary – in fact, absolutely necessary. We must endorse them and even call for them to be enlarged in scope. That is what we, together with several fellow Members, are proposing here in Parliament.

Secondly, there is the structural question regarding the management of the dairy market, and this is where our views diverge from yours, Commissioner. You propose that we move in the direction of using contractual relations. I can tell you in advance that introducing contractual relations between industrial firms and farmers will, in the long term, result in those industries competing with each other, on a Europe-wide scale.

In order to regulate a market, we need public regulation. There is no other solution. After this crisis, that is what the debate must be about. I think that, in this debate, we must respect all opinions and all options; I fear that we acted too quickly at the time of the health check to settle an issue such as quotas, which up until now, as I would like to point out to all those who have spoken, have made it possible to maintain dairy production in Europe, to ensure that the dairy industry is highly developed and, at the same time, to keep prices at a level that was easily affordable for customers.

  Liam Aylward (ALDE). - Madam President, in the last 12 months the majority of dairy farmers in Ireland and across the European Union have been selling their milk for less than the cost of production. The livelihoods of dairy farmers are under serious threat.

While the Commission’s decision to extend the intervention period for butter and skimmed-milk powder until 2010 is very much welcome, short-term measures would not alleviate the pressure on dairy farmers in the long term. Actions must be taken now that will manage, not just the current difficulties, but are long-term and will ensure a sustainable and successful industry into the future. Financial assistance is required by dairy farmers immediately. The creation of an EU dairy fund of EUR 600 million, as called for by Parliament in the 2009 budget procedure, is urgently needed. Dairy farmers are entitled to fair prices, and an appropriate system of price supports is required to guarantee milk producers a reasonable minimum price per litre and a reasonable income for them to survive. Irish and European dairy farmers must not be forced out of business and I urge the Commission and the Council to take immediate and effective action.

Commissioner, may I say to you that you have been a very successful Commissioner, and I pay tribute to the immense work you have done. You have recently announced that you are stepping down, and I would urge you to solve, or to make as much of a contribution to solving this problem as possible, before your departure.

  Oriol Junqueras Vies (Verts/ALE). - (ES) ¡Bon dia! I am addressing this Parliament without being able to do so in my own language, Catalan, which is spoken by over 10 million European citizens.

Today, on behalf of my Group, I want to express our solidarity with the whole of the agricultural sector, and in particular with the strike by milk producers and their actions across Europe. The current situation is unsustainable and requires a political solution. Clearly, the measures adopted to date by the Commission have been unable to alleviate the crisis or provide a viable alternative to the quota replacement scheme planned for 2015. As a result, in Spain for example – Galicia to be precise – 14 000 milk producers have had to cope with root-and-branch restructuring in order to continue living and working on the land, but today they are still on the verge of imminent disappearance.

For all these reasons, in the same way that the Commission has intervened in other sectors, it must also intervene in the milk sector, by regulating production, redistributing quotas, offering temporary compensation, encouraging product traceability and helping to bring producers and consumers closer together by correcting the dysfunctions caused by the distribution oligopoly.

Why has the Commission not positively intervened to prevent the negative consequences of this oligopoly established by the major distributors?

Why are we not guaranteeing the rural survival of our milk producers – and farmers in general – who provide extremely positive economic, social and environmental knock-on effects?

  Hynek Fajmon (ECR). – (CS) – Madam President, ladies and gentlemen, the crisis in the dairy produce sector shows that the entire European system of quota-based regulation is faulty and ineffective. What we need is not more regulation and manipulation of the quotas but the complete elimination of milk quotas. The opportunity to produce milk should go mainly to producers who have low costs and who achieve a profit. The way to overcome the dairy crisis is to eliminate milk quotas as quickly as possible. I support the Commissioner’s attempt to eliminate quotas by 2015, but I would not be sorry to see them go even sooner.

  Patrick Le Hyaric (GUE/NGL) . – (FR) Madam President, Commissioner, ladies and gentlemen, listening to your statement has increased my concerns even more. The statement is not a sufficient response to the scale of the suffering being experienced by milk producers and farmers in general.

The crisis is a structural one, and has not been caused merely by current circumstances, as you have said, but by the successive deregulations. That is why we are calling for an exceptional meeting of the European Council, in order to save small-scale agriculture.

The Council ought, firstly, to decide to set up an exceptional fund to provide assistance to non-industrial dairy production; secondly, to immediately set a minimum intra-European price that the central buying offices would be obliged to adhere to without any increase in prices for consumers; and, thirdly, to block national production quotas and put a stop to improper imports from outside the Community.

  John Bufton (EFD). - Madam President, I have major concerns for the dairy industry in the UK. I feel that the biggest problem lies with the retail industry, which is making huge profits off the backs of our dairy farmers. When we see what the supermarkets are charging consumers for milk, and then look at what the dairy farmer actually receives, the difference is just incredible.

The work and the major cost in producing milk are borne by the farmer, but at the same time the supermarkets are reaping huge profits. The margin that the farmer receives is so unfair. We need to put pressure on the supermarkets to pay a fair price to the industry, and it is my view that the price of milk in the supermarkets will not have to change. The consumer will not have to pay any more for their milk. The supermarkets need to reduce their profit margins. It is quite scandalous when we see the massive profits that these supermarkets are enjoying every year and at the same time our dairy industry is struggling. If action is not taken on the issue in the very near future then I really do believe that many of our dairy farmers in Wales, and the rest of the UK, will go out of business.

I have one quick point on what the Commissioner said this morning about the super levy. I am concerned by those comments. I think it will hit our most efficient producers – those who have risen to the challenge, responded to the market and invested heavily in their farms, following a lead from the Commission that quotas will be abolished. Imposing a super levy goes against the structural changes which both the EU and the UK Government claim to support.

  Dimitar Stoyanov (NI). - (BG) Madam President, the Commission is in an extremely upbeat mood again, bearing good news, but I fail to understand and cannot see anything good in thousands of tonnes of milk being thrown away in protest at the policy currently being pursued.

The truth is that Mr De Castro and the other previous speakers are quite right in saying that the Commission and the Council did not do enough during the health check to prevent this crisis. Incidentally, where are the representatives of the Council who should be taking a stand on this issue, seeing as the Council holds the deciding vote in any reforms?

My Eastern European colleagues and I on the Committee on Agriculture and Rural Development warned on several occasions that we needed a much greater increase in quotas, or their total removal, because our countries, being new to the European Union’s systems, were the first to feel the impact of the crisis. Unfortunately, we have remained a lone voice in the desert, and the fault for this lies with Parliament.

I deeply regret that we pro-reformists, who really wanted the agricultural policy to be reformed, have turned out to be prophets of doom. I hope you learn the lessons for the future.

  Rareş-Lucian Niculescu (PPE). – (RO) Many people have asked during this period, right from the start of the crisis, to freeze the increase in milk quotas. This type of measure would not only not provide a solution, but would be a mistake, at least from the following points of view.

First of all, there is no basic economic link between the increase in milk quotas and the fall in market prices. Quotas have increased, while production has fallen. I cannot see where the link is. The market itself offers the explanation for falling prices. I believe that setting fixed quotas would lead to a rise in prices over time. However, the beneficiaries will be, once again, not the producers, but the processors and retailers. If we want to limit production we should perhaps encourage producers to stop livestock rearing voluntarily, by providing incentives rather than measures which could distort the market. Assuming quotas are frozen, what is going to happen when, for instance, demand on the global market picks up again? What could European producers do? Because dairy production does not have a tap that we can just turn off and on…

(The President cut off the speaker)

As I was saying, what could European producers do, assuming demand on the global market picks up again? Because dairy production does not have a tap that we can just turn off and on willy-nilly. If we were to cut production now, farmers would obviously give up cow rearing, but it would be very difficult to replenish the livestock when we realise that what some people now imagine would be a good measure is, in reality, a big mistake.

  Ulrike Rodust (S&D). – (DE) Madam President, Commissioner, Council, I would like to begin by thanking my fellow Member Mr Capoulas Santos, who has made this resolution possible.

Today we are talking about our dairy farmers and whether we are going to leave them in the lurch or deal with them in an honest manner. I do not believe that we should leave them in the lurch, but should be honest in our dealings with them. Yes, short-term measures to overcome the crisis are urgently needed. Yes, intervention is perfectly acceptable for a short period if the price of milk has reached rock bottom, and additional subsidies, loans and funds to combat the crisis are justified. However, what is totally unacceptable is, firstly, to start up discussions about milk quotas again and, secondly, to reintroduce tax-funded export refunds for products supplied to developing countries. We abandoned this one way street in 2003 and I appeal to you to keep it that way for the sake of our dairy farmers.

  Britta Reimers (ALDE). – (DE) Madam President, Commissioner, ladies and gentlemen, the world economic crisis has thrown the global market off balance. As milk producers we are suffering the effects of prices having hit an all-time low. We are hearing over and over again that the adopted milk quota regulations should be amended. As a dairy farmer myself, I can only warn you against doing this.

The Commission’s intervention measures have also succeeded in preventing milk prices from falling even further and the market seems to be relaxing. However, I do not think that this intervention is really a good means of achieving this, because it will result in stocks piling up which could burden a recovering market later on. I therefore call on the Commission to explain how it is going to deal with this problem.

  Richard Ashworth (ECR). - Madam President, can I compliment the Commissioner on her vision for the future of the industry, and may I say that I strongly support her intention to abolish milk quotas. I think this is the right decision to make. I also welcome her proposals to meet this current crisis as a sensible and appropriate way to support producers through a difficult time.

There are, however, two points that I want to make. Firstly, in my view, the implementation of the super levy at this time would be inappropriate. It is a short-term, knee-jerk reaction. It will send all the wrong messages and it will only effectively penalise efficient producers who are making plans to stay in the industry for the long term.

Secondly, we need to recognise that there is little or no direct relationship between the price in the retail sector and the raw material price received at the farm gate. That is what I term a dysfunctional price-chain mechanism.

The major influence will always be the global marketplace, and we have to recognise that the global marketplace will always be volatile. I therefore urge the Commission in the long term to come forward with plans to ensure that there will be some sort of stability mechanism for the benefit not only of producers but also, of course, of consumers in the long term.

  Esther Herranz García (PPE). – (ES) Madam President, Commissioner, you ended your speech by saying that there is a crisis in the milk sector, and yet you started by saying that all possible measures have already been taken and that the situation is being sorted out.

You should know that it takes a wise woman to recognise that she was wrong. That is a saying in Spain, which could very well be applied to this situation. For months the milk sector has been suffering one of the worst crises in its history. Despite that, because the European Commission and certain governments – seemingly including my own, the Spanish Government – do not want to allow their arms to be twisted, they are refusing to go back on the decisions relating to the health check of the common agricultural policy.

Those decisions were taken without any thought for the fragility of this sector, and in a market context very different from the one that has developed since that compromise was agreed. It makes you think that the Member States did not want to see, or could not see, at that time, the storm that was approaching. The reform has very quickly become irrelevant, due to the major turnaround in the market, which demonstrates that the sector is totally at the mercy of price volatility.

The fact that major producers such as France and Germany – countries which, in absolute terms, obtained the biggest increase in their national production quotas in this agreement – are now the ones asking for a review of the health check decisions raises a lot of issues.

As I see it, the Member States were wrong and should have listened more carefully to the voices, including mine, which were calling for any final decision on the future of the sector to be postponed until 2011.

It is a shame that no one listened to us. Perhaps you should do so now.

  Iratxe García Pérez (S&D). – (ES) Madam President, Commissioner, today’s debate is vital so that we can express our concern about the crisis in the milk sector. We must sort out this situation, which is threatening the future of a large number of milk producers in the European Union.

This is a European crisis that must be tackled from a European perspective, with ambition and by using all available Community tools, something which the Commission at the moment seems incapable of doing.

Commissioner, you should not pass the buck to Member States so that they help whoever they can. We must find common solutions.

As a result, this Parliament has an important responsibility in demanding measures aimed at reinvigorating demand, and not only those measures indicated in the motion for a resolution, but also those available through the common organisation of the market.

Another important issue is the huge difference between the prices paid to the producer and the final price paid by consumers, something which affects not only the milk sector, but all agricultural and livestock products.

There are many men and women who, faced with the current uncertainty, need a clear and firm signal from us that the continuation of this activity will be guaranteed.

  Marc Tarabella (S&D) . – (FR) Madam President, Commissioner, yesterday in Wallonia over three million litres of milk were poured away by farmers disillusioned by the most serious crisis ever seen in the sector. They receive only 19 cents per litre. The crisis is caused by an over-abundant supply of milk, which is making prices drop sharply. Deregulation is encouraging volatility, and market conditions now are totally the opposite of what they were a short time ago.

Commissioner, please stop stubbornly hiding behind choices made last year and take into account what is really happening on the ground now!

The Council is also to blame, firstly for not being here to listen to the debate, but also for not taking decisions, because it is swayed more by purely national interests than by a European vision of agriculture.

The market is not working. There is over-production. It would be very simple to freeze the 1% increase in quotas, or to reduce the quotas immediately by 3 to 5%, because we urgently need to come up with some short-term solutions. Adopting this measure would kill two birds with one stone: we would give the producers a decent price once again and, by reducing production, we would reduce the European bill of hundreds of millions of euros spent on various interventions, including export refunds.

  Wojciech Michał Olejniczak (S&D). – (PL) The action that has been taken – I have spoken today to Polish farmers and Polish product manufacturers – indicates that there has been an improvement, albeit not a significant one as yet, in the situation facing the dairy sector, but that there has been no change at all in the very difficult situation facing Polish and European farmers. They still receive very little money for their products, below the viability threshold. This also applies to those farmers who have invested a great deal of money, including EU funding and loans. This situation is plunging them into further difficulties, and they are unable to meet their obligations.

In view of these problems, I would like to talk about the future. Today, we have to react to what is happening right now, but we also have to think about what lies ahead and plan our common policy to take farmers into account as well. At this juncture, I would like to repeat the following: the common policy in respect of dairy farmers needs to involve plans for sensible investments in this sector, so that we can avoid spending money which, as a result of increased production, will land us in the kind of trouble we find ourselves facing today. I also trust that all the political powers will reach an agreement regarding future quotas.

  Csaba Sándor Tabajdi (S&D). – (HU) Those who have spoken before me quite rightly refer to the fact that we should not return to the quota system and export subsidies, but the policy which the Commission has pursued has completely failed. The crisis has not eased. This is why Mr Le Foll and I are proposing that we temporarily freeze the quotas, but only temporarily.

The new Member States are still at a particular disadvantage because of phasing-in, as we are receiving just 60% of the subsidies from the envelope in Brussels this year. As a counterbalance to this, the Hungarian government proposed increasing the quota-based subsidies, but the Commission did not respond positively to this suggestion or to the one from France, specifically from the French ministry, either. I finally call on my fellow Members to support the amendments from Mr Le Foll and his colleagues. We also support the proposal from Elisabeth Jeggle in favour of creating a EUR 600 million dairy fund and the extension of the school milk programme.

  Christel Schaldemose (S&D). - (DA) Madam President, thank you Commissioner for a good start – and a good introduction to the debate! I recognise that Europe’s dairy farmers are facing a crisis on a major scale, but I simply do not understand how my fellow Members can think that you, in the Commission, have not done enough. I would definitely like to call on you, Mrs Fischer Boel, to reiterate what you have done. It seems to me that the list of initiatives coming from the Commission is a long one, in fact it is almost too long. It is almost as if we are destroying the progress that we made in connection with the health check. I would also like to point out that the efforts that have been made thus far on behalf of the dairy farmers have clearly not been mirrored in relation to those workers in the car industry who have lost their jobs or those workers in the shipbuilding industry who have lost their jobs as a result of the current economic crisis.

So I can only ask that we take a little care about how we handle this crisis and that we also make sure that we do not destroy the sound progress that was made, despite everything, as a result of the health check. The idea of freezing the milk quotas is, I think, completely hopeless! Nor can we go back to the old models by granting export refunds – that simply ruins the market for someone elsewhere in the world. We have to be careful. Commissioner, I would nonetheless like to ask you to reiterate the long list of activities that you have already undertaken so that my fellow Members can see that there is certainly no need for us to go crazy and start enacting numerous additional measures with the result that we destroy the sound progress that has been made.

  Georgios Papastamkos (PPE). - (EL) Madam President, Commissioner, the measures are without doubt inadequate. We propose other, more targeted interventions, especially for the mountainous and disadvantaged areas of the European Union, so that all the Member States benefit equally; interventions such as reinforced protection for designations of origin, not just inside the European Union, but on the international markets, clear labelling and mandatory indication of the origin of dairy products, the reactivation – and why not – of private storage of dairy products and provision for satisfactory aid, an increase in eligible destinations for export refunds, full transparency in the supply chain and a reduction in the gap between producer and consumer prices.

We are not the mouthpieces for the farmers’ interests. We are here to convey the anxiety, the cry for survival of the creative forces of the European countryside, and that cry for survival from the people in the European countryside is for us a standing instruction to act.

  Michel Dantin (PPE). – (FR) Madam President, Commissioner – I would have liked to have been able to address the Presidency of the Council too – ladies and gentlemen, as you yourself acknowledged the other day, Commissioner, to the Committee on Agriculture and Rural Development, the price paid to dairy producers no longer covers the current costs of production. What that means is that our producers are in the process of decapitalising.

Just now, you listed the measures you have taken in the past nine months. Those measures do exist, we will grant you that. They have not, however, produced the anticipated effects because, in our view, they are not extensive enough, and there is definitely too much uncertainty about how effective their target is.

This morning you mentioned a recovery in the market, but the producers will certainly only see the effects of this in the payments made at the beginning of next year. The agricultural products market is not the same as the market in metals or the energy market. It calls for regulatory tools, because the cycles of the seasons and nature also have an effect on market conditions.

Your interpretation of the health check, carried out under the French Presidency, surprises us, since the interim assessments that it produced in relation to the dairy sector leave all avenues open, including the possibility of new decisions on tools for regulating the markets.

The French delegation, to which I belong, is convinced that a renewed quotas system will be necessary after 2013. The tension that existed on the food products market prior to the current economic crisis has demonstrated the fragility of the balance across the world between production and consumption.

After having partially dismantled the intervention tools, we have neither the right nor the legitimacy to dismantle today the production tools that we will need in the short term.

Commissioner, we must give farmers back their dignity: these are men and women who are not afraid of hard work.

IN THE CHAIR: MR MARTÍNEZ MARTÍNEZ
Vice-President

  Antolín Sánchez Presedo (S&D). – (ES) We cannot allow the milk sector to collapse. It is vital for our rural world, and for food security and quality.

Futures markets and the medium- to long-term prospects of the milk and dairy products market in the European Union are showing positive signs. We must prevent these falling into a negative situation. We need anti-cyclical actions and joint initiatives.

The collapse in prices clearly shows the inadequacy of support measures. The distortions in the dairy farming market mean that each supply chain cannot function effectively or fairly.

Producers are suffering price drops which are unbalancing the market, not being passed on to consumers and delaying the sector’s recovery. This must be corrected. We must ensure fair competition and also reinforce traceability during marketing.

  Riikka Manner (ALDE). - (FI) Commissioner, you mentioned that there is no longer any question of a return to the quota system. Have we not seen what happened in the dairy industry after the Commission decided in the spring gradually to withdraw these quotas? That was a very poor and short-sighted decision. The complete withdrawal of quotas will deal the deathblow to many small farms. Is this the sort of policy that the Commission wants to implement? The fact is we need a restrictive system for the dairy industry. If quotas are out of the question, I would appeal to you, Commissioner, to ensure that the Commission proposes other solutions to resolve the crisis. This is a European crisis and we have to implement an agricultural policy that guarantees at least a reasonable standard of living for farmers, regardless of country and region.

  Yannick Jadot (Verts/ALE). – (FR) Mr President, Commissioner, I am an elected representative from a region in the west of France, where there is a very high concentration of dairy farmers, and I do not believe that you have acknowledged the tragic social situation they are experiencing today.

Commissioner, when you speak of ‘producers’, what I hear is ‘manufacturers’ and ‘distributors’. Dairy producers do not need your compassion, Commissioner. They do not need the outmoded liberal theories that have drawn us into an unprecedented world crisis. Dairy producers need a genuine agricultural policy. They need strict quotas. That is why we are calling on the Council to overturn your policy and instead to create a genuine policy to support dairy producers and to put an end to this policy of destroying them en masse.

  Janusz Wojciechowski (ECR). - (PL) Mr President, Commissioner, our debate really has taken place in the shadow of dramatic events related to farmers spilling milk in protest. We are all deeply shaken by what has happened.

I wanted to refer to a problem that was mentioned by my colleague, Mr Nicholson, namely the way in which large commercial chains and hypermarkets have abused both their consumers and, in particular, their suppliers. I would like to remind you that the European Parliament, during the 2008 parliamentary term, adopted a written resolution - I was one of the co-authors - on the need to put an end to these abuses, and for the Commission to conduct a thorough investigation into the matter. According to my information, action has been taken, but the process seems to be too slow. I would like to ask whether the Commissioner is interested in this matter and, generally, what the future prospects are in relation to these kinds of activities.

There is something really wrong with the economic policy of the European Union, as farmers receive less than 10% of the value of their products. This has to change. I would like to ask the Commissioner to take action on this issue.

  Jaromír Kohlíček (GUE/NGL). – (CS) Commissioner, you see as progress a 3% - 8% increase in the price of finished products such as skimmed milk and butter. In my view, this is an insult to our farmers. The main problem is the price at which milk is purchased from farmers. In the Czech Republic, for example, the purchase price is up to 25% lower than the production cost, but the price of the finished product which is then sold in the shops would easily cover all the farmers’ costs. The main problem, therefore, is that there is a large hole somewhere. This problem has to be resolved. In the Czech Republic we now have fewer cattle than we had after the Napoleonic wars. This is now even putting at risk the upkeep of rural areas. Mr Bové is quite right and Mr Fajmon profoundly ...

(The President cut off the speaker)

  Krisztina Morvai (NI). – (HU) Mr President, emergency measures are obviously needed, as the situation is disastrous. But is it not possible that the problem lies somehow with the basics? Surely there is a problem with a model or system where a huge quantity of soya is imported from Latin America, for instance, thereby increasing the oversupply in Europe while destroying the environment in Latin America. In the ensuing crisis, we then rack our brains about whether we should export agricultural produce to the developing world at dumped prices, therefore ruining the market over there, along with the situation of smallholders and producers. Do we not need a new model, such as food sovereignty, instead of imposing on agriculture the free-trade logic dictated by the WTO? My second question is the following. We are asking for specific advice or a proposal on how … (The President cut off the speaker)

  Astrid Lulling (PPE). – (DE) Mr President, we saved the banks, because we had to. Now we are faced with a situation where we need to prevent thousands of farmers from going bankrupt in the short term because prices no longer cover production costs.

However, we must ensure that we maintain our production potential in order to supply the population with high quality foodstuffs. I belong to a generation which experienced food rationing. I remember having to cycle eight kilometres in the winter of 1944 just to get two eggs. It will hopefully not come to that, but security of supply – not only in the energy sector – is also important.

If we are not prepared to take the measures that have been called for in our resolution, the cost in terms of the social, economic and environmental policy consequences in the EU will be many times what ...

(The President cut off the speaker)

  Ricardo Cortés Lastra (S&D). – (ES) Mr President, Commissioner, ladies and gentlemen, as the European Commission stated in its communication of 22 July, the situation in the dairy farming sector has deteriorated dramatically during the last 12 months.

However, taking into account the huge impact of the crisis on dairy product prices, and in particular on the income earned by producers, the measures proposed to date by the European Commission and debated by the Council of Ministers have been inadequate to counteract the fall in demand and its consequences.

The current crisis is not only giving us the challenge of reversing the fall in demand, but also an opportunity to encourage the consumption and promotion of dairy products. We must also ensure that the indisputable quality of the initial product is maintained intact until it reaches the end consumer.

In this respect, actions such as improving labelling, increasing milk consumption among certain groups of the population or using milk to feed calves may help not only to improve the current situation, but also the whole structural situation in the sector.

  Mariann Fischer Boel, Member of the Commission. − Mr President, first of all I would like to thank Members of Parliament for this very dedicated debate. I have actually listened very carefully. But of course I have also noted the different views that I have heard among the different Members of this Parliament.

As regards the quota system; it seems to be the scapegoat of this whole situation in which we find ourselves. I do not underestimate – and I have been very precise on this since the very beginning of the discussion – that the dairy sector, not only in Europe but globally, finds itself in an unprecedented crisis. That must be very clear. So I certainly do understand the frustration that I see among farmers in different parts of Europe, not all over, but in different parts of Europe.

The abolition of the quota system was decided back in 2003 so it is not a decision that was taken overnight while nobody knew what was happening. Then, in the health check, we had the discussion on increasing the quotas to try to find a soft landing for the dairy farmers.

But I think that those who want to point their finger at the quota system for being the reason for all the problems in which dairy farmers find themselves are wrong. Because we see that even with a quota system in place, we have not been able to maintain high prices and the structural changes in the dairy sector have taken place anyway. If you look at 1984, when the quota system was introduced, we had 1.6 million dairy farmers in the old EU-10. Today in EU-10 we have 300 000 dairy farmers: less than one fifth of the number of dairy farmers today compared to 1984 with a quota system in place. So these structural changes are taking place anyway.

I do not think that going back or rolling back the decision in the health check is the right policy, and here I am supported by all heads of state saying clearly in their decisions from the meeting in June that I have to stick to the decisions from the health check. I have never, ever, during the health check discussions, signalled any openness to roll back these decisions because that would certainly jeopardise predictability for farmers within the European Union.

But, José Bové, I think you said I had not been acting with preciseness; that is, the laissez-faire attitude. I do not think it is fair to say that we have been doing nothing. I am not going to repeat all the different measures that we have been taking. I think that, if Member States want to pay specific attention to the dairy sector, they now have the possibility with the health check to reallocate the direct payments so they give a special preference to the grassland areas. That is a possibility and I know that at least one big Member State has taken the opportunity to use this possibility, and for the mountainous areas there are lots of different possibilities.

We have production in Europe today that is 45% below quota, so what would happen if we actually wanted to cut quota by 5%? We would actually damage the situation for the young farmers that have invested in the future.

Therefore, I would recommend to those countries, those Member States, who really want to help their dairy sector that they use this buy-up of quotas from those who want to leave the dairy sector. That is a much better way of securing the maintenance of those who have invested while giving a helping hand to those that want to leave the sector. That is I think the right policy.

Could I then just correct the misunderstanding on the super levy? We are not introducing a new super levy system. We are just giving the possibility that, if Member States are buying up quotas from farmers, they can reduce the number of kilos or tonnes from their ceiling, but it is not a new super levy that will punish any of the farmers.

Just on some of the promotion. We have already reserved EUR 14 million for promotion for the rest of this year. We have agreed on extending the school milk scheme; yogurt that is low in sugar – that is, containing no more than 7% sugar – will now be introduced into the school milk scheme. Labelling – I hear from different Members of Parliament that there is interest in a labelling system. Let us discuss that in the context of the quality paper that is actually on the table at the moment. So I think there are lots of possibilities.

Then, finally, on the food chain, I completely agree with you that that there is no transparency in this chain and we cannot see where the added value is disappearing. Therefore, I am looking forward to the presenting of this report before the end of the year so we can see what the situation actually looks like.

I must say that, if you look at the supermarket situation all over Europe, there are huge differences. Germany has a tradition or number of discount supermarkets. These supermarkets are using dairy or milk products, drinking milk as a produit d'appel to get the consumers in, and they are offering a very low price but they are just handing over the bill to the farmers, paying them the low price. So, I think it would be very interesting and necessary to see what is actually happening in this chain, so let us get this transparency on the table and let us, internally in the Commission, but also in Member States’ competition authorities, look into the market.

It has been a very interesting discussion here today. I hope that you have noticed the short-term measures and the long-term measures that have been worked out together with France and Germany. I am sure that we will have some very interesting discussions on the future of the dairy sector in Europe because we all want our dairy sector to have a future.

  Paolo De Castro, author. − (IT) Mr President, ladies and gentlemen, I wish to thank the Commission for deciding to come here to Parliament today to present new proposals on the crisis in the dairy farming sector. It is important for the parliamentary term that has just begun to be characterised by an interinstitutional dialogue between the Commission and Parliament, a positive dialogue, which has in fact already launched the codecision process.

We will assess your new proposals very carefully, Commissioner, and it will be my job to ask the Committee on Agriculture and Rural Development to issue an opinion on the new ideas immediately, without delay.

May I conclude, however, by pointing out that, if the amendment adopted unanimously within the Committee on Agriculture and Rural Development is also adopted by this House in plenary, it will become a political problem if the Council, after the ratification of Lisbon, should then vote it down. I therefore invite you, and the Council, to give it serious consideration.

  President. – To conclude the debate, I have received seven motions for resolutions⁽¹⁾pursuant to Rule 115(5) of the Rules of Procedure.

The debate is closed.

The vote will take place today at 12.00.

Written statements (Rule 149)

  Luís Paulo Alves (S&D), in writing. – (PT) I come from an outermost region, the Azores, where milk production is the pillar of the economy, society and the environment. In recent weeks we met with the producers, their organisations and the processing industries. They all agree. It is crucial that the Commission should give a more effective and urgent global response in order to tackle the current situation.

Cash flow in the sector is drying up. It is vital that the outermost regions be looked at particularly carefully by the EU and be included in its responses to mitigate the effects of the current crisis.

They are all of the opinion that we need to stop the increase in quotas. In a market thrown off balance by surpluses, any country that increases its production harms all the others. They also believe that we should continue to maintain quotas as a supply regulation mechanism that stabilises their activity.

In the current scenario of total liberalisation, its social, environmental and economic effects on these regions need to be urgently studied. Specific measures must be designed to prevent the collapse of this activity, which is responsible for our beautiful countryside, the quality of our environment and rural areas, and the economic progress and convergence that we have been achieving.

  Béla Glattfelder (PPE), in writing. – (HU) The current dairy market crisis has been caused mainly by raising milk quotas. The European Commission and Member States’ governments are also responsible for the current grave situation affecting the dairy sector, as in 2008 they supported raising the quotas, resulting in the creation of milk surpluses and the collapse of prices.

This decision was based on the European Commission’s erroneous market forecasts. However, the European Commission did not abandon its intention even when it became obvious that the production increase was contrary to market trends.

This is why the European Union must immediately drop its measures leading to an increase in dairy production. Furthermore, we also oppose the permanent removal of quotas after 2015. The important lesson to be learned from the current crisis is that the dairy market needs to be regulated. Without this, prices will become unpredictable. European dairy producers cannot endure the losses caused by large-scale price volatility.

I am pleased that, with a view to easing the crisis, the Committee on Agriculture and Rural Development voted in favour of my initiative, which would raise the export subsidies amount from EUR 450 million to EUR 600 million. Without the export subsidies some of the surpluses would remain on the EU internal market, which would lead to a further price decrease.

  Jim Higgins (PPE), in writing. – Milk quotas need to be cut by between 5 to 10 per cent in order to push prices back up to a sustainable level. But quotas alone will not save the dairy sector. While the Commission is correct to adopt a long-term view, it cannot detach itself from reality - and the stark reality is that the agriculture industry, in particular the dairy sector, is in real danger. The lowest milk prices since 1983, together with high costs, poor weather and lack of credit, have created an unprecedented cash flow and income crisis for dairy farm families in 2009. While the indications are that markets have bottomed out, badly needed price increases still appear some way off, and EU action is needed. I agree with IFA President Padraig Walshe and Dairy Chairman Richard Kennedy that the quickest way to speed up price recovery is for the EU Commission to make more aggressive use of all market supports such as:

- Export refunds

- Processing aids

- Extended full-price intervention

- Longer private storage scheme for butter

- Careful handling of stocks

  Anneli Jäätteenmäki (ALDE), in writing. – (FI) Mr President, last year the situation in the dairy sector declined dramatically. The producer price for milk fell, and at present many milk producers are having to sell dairy products at a price that does not reflect production costs. The survival of milk producers is now seriously under threat. Up until now it has not been possible to resolve the crisis in the dairy sector with the measures the Commission has implemented. Now it is time to roll up our sleeves and come up with new solutions. The Commission must stabilise the dairy market in Europe quickly. At the same time it should also undertake a thorough evaluation of the future of the dairy industry together with actors in the sector and the Member States. Thank you.

  Véronique Mathieu (PPE), in writing. – (FR) In order to tackle the particularly difficult economic circumstances currently confronting the dairy sector, strong action by the European Union is now urgently required. In common with the majority of the Member States, I believe that the solutions put forward by the Commission are unsatisfactory. Of course, I welcome the flexibility that it is permitting, which will enable the national aid ceiling to be increased from EUR 7 500 to EUR 15 000 for producers who are struggling. It is nonetheless vital for us to adopt more effective intervention tools. In order to deal with the growing volatility of prices, our markets must be regulated to a greater extent. The joint statement made by 16 Member States on the state of the European dairy market offers the Commission some valuable suggestions on improving the regulation of dairy markets. I also believe that it is necessary, as seven Member States are requesting, to look at temporarily suspending the increase in quotas. I would also like to reiterate my support for the introduction of a ‘Dairy Fund’ to help producers’ organisations and cooperatives, and also to support agricultural investment, modernisation, diversification of dairy farming, measures linked to geographical location and marketing measures for dairy products.

  Ivari Padar (S&D), in writing. – (ET) Observing the present situation in the dairy market, it is clear that our sector is still largely unprepared to cope with the consequences of the global economic crisis. As a result, the development of the common agricultural policy should continue to be aimed towards improved competitiveness and, in the long term, less market management. Giving the common agricultural policy a ‘check-up’ is a step in the right direction, and maintaining the same direction in discussions of the common agricultural policy after 2013 is the only way to strengthen the sector.

  Daciana Octavia Sârbu (S&D), in writing. – (RO) We are currently going through the deepest crisis in the dairy sector, triggered by the global crisis, which is basically a result of a discrepancy between demand and supply. The fall in the prices of milk and dairy products primarily affects farms with low incomes. For this reason, I do not think that the quota system ought to be frozen in all Member States, but each state ought to decide how to set their own quotas. The problem is that, compared to 1983-84, only one-fifth of producers have remained in the market, and we are now at risk of more farms closing down. We therefore need to adopt urgent measures to prevent this from happening. We ought to take the following measures to end the crisis in this sector: extend the measures envisaged for storing butter, milk powder and cheeses, speed up the creation of a dairy product fund to meet the needs of small producers and young farmers, and reach an understanding with the supermarkets in terms of setting a fair price for both agricultural producers and retailers.

(1) See Minutes.