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Thursday, 17 September 2009 - Strasbourg
Crisis in the dairy farming sector

European Parliament resolution of 17 September 2009 on the crisis in the dairy farming sector

The European Parliament,

–   having regard to Article 33 of the EC Treaty,

–   having regard to its resolution of 25 October 2007 on rising feed and food prices(1),

–   having regard to its resolution of 12 March 2008 on the CAP Health Check(2),

–   having regard to its resolution of 22 May 2008 on rising food prices in the EU and the developing countries(3),

–   having regard to its Declaration of 19 February 2008 on investigating and remedying abuse of power by large supermarkets operating in the European Union(4),

–   having regard to its resolution of 26 March 2009 on food prices in Europe(5),

–   having regard to Council Regulation (EC) No 72/2009 of 19 January 2009 on modifications to the Common Agricultural Policy by amending Regulations (EC) No 247/2006, (EC) No 320/2006, (EC) No 1405/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No 479/2008 and repealing Regulations (EEC) No 1883/78, (EEC) No 1254/89, (EEC) No 2247/89, (EEC) No 2055/93, (EC) No 1868/94, (EC) No 2596/97, (EC) No 1182/2005 and (EC) No 315/2007(6),

–   having regard to the Communication from the Commission to the Council of 22 July 2009 on the dairy market situation 2009 (COM(2009)0385),

–   having regard to the proposal for a Council Regulation derogating from Regulation (EC) No 1234/2007 ("Single CMO" regulation) as regards the 2009 and 2010 intervention periods for butter and skimmed milk powder (COM(2009)0354) and to its position of 17 September 2009 thereon(7),

–   having regard to Rule 115(5) of its Rules of Procedure,

A.   whereas there has been a dramatic deterioration in the situation on the dairy market in the last 12 months, with milk prices falling below EUR 0,21 per litre, despite intervention and export subsidies, and many farmers are now selling dairy products below production costs,

B.   whereas the viability of many EU dairy farmers is now seriously at risk, with many only surviving by using up their personal savings, which is clearly not sustainable, driving farmers to stage major public demonstrations across the EU,

C.   whereas a consequence of the worldwide economic crisis has been a considerable decline in demand for dairy products at precisely the same time as supply has increased owing to third countries such as New Zealand, Australia, Argentina, Brazil and the USA producing greater quantities,

D.   whereas in the 2009 EU budgetary procedure Parliament prioritised the creation of a special EU Dairy Fund to help the sector through difficult readjustments,

E.   whereas Parliament has repeatedly highlighted the difference between the prices paid by consumers for agricultural products in the supermarket and the prices received by producers, and has urged the thorough investigation of potential market abuses,

F.   whereas the Commission has calculated that over the period May 2006 to May 2009 prices paid by consumers for milk and cheese increased by more than 14 %, while prices received by producers in some Member States have decreased by 40 % over 12 months,

1.  Considers that, given the continuing critical situation on the dairy market, both far-reaching and short-term measures are necessary, and points out that the measures taken by the Commission to date are not sufficient to solve the crisis in the sector;

2.  Regrets that the Commission failed to predict the severity of the current crisis and did not propose adequate measures sooner;

3.  Calls on the Commission to establish, as a matter of urgency, which measures could bring about market stabilisation, and to undertake an in-depth evaluation with stakeholders and Member States on the future of the milk sector with a view to analysing the possibility of reinforcing management mechanisms that avoid price volatility;

4.  Notes that a range of opinions exist among the Member States regarding the possibility of not increasing dairy quotas in 2010; calls on the Commission to present a detailed analysis concerning all the factors that impact on the price obtained by dairy producers, including the quota increase;

5.  Calls on the Commission to apply the necessary measures to ensure that imported feedstuffs comply with the same standards that dairy farmers have to meet within the EU, in order to prevent imports of such products that do not meet those standards from undermining the EU's efforts to enhance sustainable milk production;

6.  Reaffirms its commitment to the creation of an EU Dairy Fund of EUR 600 million to aid producer organisations and cooperatives and to support farm investment, modernisation, diversification, area-based measures, marketing activities, small producers and young farmers, and recalls that Parliament made the same request during the 2009 budget procedure;

7.  Asks the Commission to propose measures to help producers increase the added value of their products and to encourage them to produce high-quality milk-based products (such as cheese), especially in those areas where there are few production alternatives;

8.  Calls on the Commission to introduce immediate measures to stimulate demand for dairy products, and considers an extension of the scope, product range and financing of the school milk programme to be a good example of a feasible initiative; calls for closer coordination between the Commission Directorates-General in this regard;

9.  Calls on the Commission to encourage contractual relations within the agro-food chain and strengthen producer organisations so as to balance relations between the various parties involved in the sector and forestall market risks, as a complement to the other regulatory instruments which the sector requires;

10.  Considers there to be a need specifically to promote production by dairy farmers working in conditions with permanent natural and geographical disadvantages such as mountain regions, or those with a clear organic strategy, because of their non-market-oriented environmental and cultural added value and quality;

11.  Calls on the Commission to formulate proposals to bring supply and demand on the EU dairy market into balance;

12.  Calls on the Commission to examine the possibilities for an early retirement scheme for dairy producers, for example by setting up a quota buy-back scheme, similar to the grubbing-up scheme in the wine CMO;

13.  Demands, bearing in mind the European dimension of the crisis in the dairy sector, that the Commission play its role in the search for common solutions, avoiding inequalities among Member States and the distortions of the market that may be caused by State aid;

14.  Supports the Commission's intention to examine measures, such as favourable loans and mutual guarantee schemes, to help reduce price volatility in agricultural commodity markets;

15.  Supports the immediate use of milk powder to feed calves, as a way of increasing demand for dairy products;

16.  Recalls that clear labelling of dairy product substitutes such as non-dairy cheese and other non-dairy products is of vital importance, and should include specification of raw materials and country of origin; insists that products branded as dairy products must contain animal milk or animal milk products;

17.  In order to help farmers to overcome the current crisis, notably in the dairy sector, calls on the Commission to increase, without delay, the maximum amount of de minimis State aid payments to all productive agricultural sectors from EUR 7 500 to EUR 15 000, by way of exception to the set national limit for State aid;

18.  Recognises that a cheaper price for feed would help ease production costs for dairy farmers;

19.  Welcomes the Commission's proposal to extend the intervention period for butter and skimmed milk powder to 28 February 2010 and considers that, at least in the short-term, the intervention price should be increased; acknowledges that such an increase would be an emergency measure to counteract extreme market imbalances and not a long-term solution;

20.  Calls for the extension of private storage to cheese products and for adequate levels of support to be set in order for that measure to be effective, as well as for an increase in the number of third countries – such as the USA – to which EU cheese products may be exported with export refunds;

21.  Calls on the Commission to examine, for the longer term and once export refunds are phased out, how the corresponding appropriations can be maintained in the dairy sector;

22.  Calls on the Commission to allow agriculture export credit insurance, as is the practice in the USA;

23.  Calls on the Commission to improve price transparency within the food supply chain, as consumer prices in many Member States remain conspicuously high despite dramatically decreased producer prices;

24.  Calls on the Commission to present its communication on food prices in Europe without delay; recalls that Parliament has, for a long time, been asking the Commission to investigate potential abuses of market power in the food supply chain, especially in the dairy sector, and considers that such an investigation is long overdue;

25.  Calls on the Commission to implement an EU-wide code of conduct governing relations between retailers and producers;

26.  Considers that there is a need to establish a transparent system that monitors commodity prices, in particular prices charged to consumers;

27.  Notes with regret that the conclusions of the Council meeting of 7 September 2009 did not propose any concrete way of rapidly overcoming the crisis in the European dairy industry, which affects all producers in the European Union, without exception;

28.  Calls on the Commission vigorously to oppose initiatives by certain Member States to renationalise the Common Agricultural Policy;

29.  Insists that the Commission report regularly to Parliament over the coming months on the situation on the dairy markets;

30.  Instructs its President to forward this resolution to the Council, the Commission, and the governments and parliaments of the Member States.

(1) OJ C 263E, 16.10.2008, p. 621.
(2) OJ C 66E, 20.3.2009, p. 9.
(3) Texts adopted, P6_TA(2008)0229.
(4) OJ C 184E, 6.8.2009, p. 23.
(5) Texts adopted, P6_TA(2009)0191.
(6) OJ L 30, 31.1.2009, p. 1.
(7) Texts adopted, P7_TA(2009)0014.

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