EMB and the German Dairy Farmers' Association (BDM) has made a proposal to alter EU policy on dairy market management. The Market Responsibility Programme (MRP) has been developed by EMB to counteract looming market crises in the milk sector in the future.

The MRP proposes measures to limit milk production during a crisis, including levies for farmers who increase production during this time.

To "effectively curb" market-damaging increases in volumes of milk by individual farms in a crisis situation, a levy amounting to 110-120% of the milk price should be imposed, it is suggested by EMB.

The advantage of the MRP, according to EMB, is that a collapse of farm-gate prices can be prevented, and secondly the crisis can be overcome quickly with little state funding.

"The concept relies heavily on milk producers behaving in a manner appropriate to the market circumstances," EMB said.

How it works

A combination of monitoring and response to the market enables impending crises to be recognised and reacted to in a three-phase programme.

  • Early warning (market index falls by 7.5%) Private storage is opened. Incentive programmes become available for extra consumption such as sucking-calf production, milk fattening of heifers etc. Phase is maintained until market stable.
  • Crisis (market index falls by 15%) Call for tenders regarding production cuts (at least 5%) and bonus for reducing production. Market responsibility levy from the first kilo for farms increasing production.
  • Obligatory cutback phase (market index falls by 25%) Universally applicable reduction in the supply of milk by 2–3 % for a defined period eg. 6 months.

    If the market index improves and the monitoring agency’s forecasts for the further market development are positive, the crisis can be declared over and all measures restricting production end.

    Applied bindingly throughout the EU

    EMB is calling on the EU to develop the the milk market observatory already set up into an effective central monitoring agency for this new programme. EMB want the programme to be applied bindingly throughout the EU.

    In the MRP, interventions relating to quantities must be taken by producers on an individual farm level according to the ‘polluter pays’ principle. In the event of a crisis situation the production of milk can be adjusted to the changing market circumstances.

    "This saves unnecessary processing and storage costs, and so is by far the most efficient solution," EMB said.

    Sieta van Keimpema, EMB Vice-President, explains the proposal in more detail in the video below.

    To read the full document on the Market Responsibility Programme proposal by the EMB click here.

    'Flexibility' in superlevy payments

    Meanwhile, ICMSA has appealed to the Minister for Agriculture Simon Coveney to recognise that the arrangements for the upcoming payment of the 2015 superlevy need to mirror the current difficulty in the dairy market, and that as much flexibility as possible must be extended to already very hard-pressed dairy farmers.

    Gerald Quain, Chairperson of ICMSA Dairy Committee, said that with milk price currently below the cost of production, farmers are already under severe financial pressure and will very definitely struggle to meet the superlevy bills that fall due in the peak months.

    "ICMSA is calling on the Minister to seek an extension to the current three year-repayment period so that farmers can make the payment over a longer period and thus ease cashflow in 2016. It’s simply not going to be feasible for very many of those affected where we’re looking at low prices on top of the superlevy repayments.

    "With milk being produced below the cost of production in 2016, we’re appealing to Minister Coveney to seek an immediate extension to the three year-repayment period and provide some level of relief to dairy farmers," Quain concluded.

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