EU agricultural co-operative Copa and Cogeca have emphasised the critical state of the dairy market at the European Parliaments Public Hearing, with calls for action to be stepped up.
With a drop in milk prices of over 40% seen in the last 2 years, Copa and Cogeca have called for action to be increased.
At the hearing, many participants - from MEPs, Ministers to the EU Commission - agreed that there’s a bad dairy market situation caused by several factors which are not in the hands of farmers.
For example, the political export ban imposed by Russia and low oil prices, with increasing market volatility.
Speaking at the Hearing, Copa & Cogeca Chairman of the Milk Working Party Mansel Raymond said: "Prices have been under pressure for the past two years and have plummeted by over 40% over this period.
"The price the producer gets doesn’t even cover his production costs and they are suffering from severe cash flow problems, which makes many farmers go out of business."
"Whilst in the longer term, prospects are promising with global demand expected to rise by 2% annually, the short-term situation remains extremely difficult.
"Actions are consequently needed to address the short term problems to ensure its profitable in the future", Raymond stressed.
'Aid must be paid out'
Outlining actions, he said: "Aid under the first EU crisis package must be paid out.
"I am disappointed that only around half of it has been paid out by Member States so far, which reduces the impact of it.
"The delays in direct aid payment is also a problem. Producer organisations, interbranch organisations, cooperatives, who handle 85% of milk in the EU, also have the opportunity to adapt their production using Article 222 over the period mid-April to mid-October 2016.
"But it seems that currently this is not used because there are no financial incentives for it.
"Possible EU financing should not affect the crisis reserve. Producers need their fair share of the margins through the food supply chain."
Importance of opening up new markets
Vice Chairman of the Milk and Dairy Products Working Party, MrAbrate, went on underline the importance of opening up new markets, especially in Japan.
"Cooperatives are moving ahead to face the challenges of the internationalization of the dairy products markets.
"Here we need to look into using export credit insurance to give traders more certainty when they export."
The crisis was also debated with EU Farm Commissioner Phil Hogan at Parliaments plenary session and MEPs demanded further action to rescue dairy farmers.
Talks are set to continue at Copa & Cogecas’ meeting for Presidents in the Netherlands next week.
