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Temporary supply management for milk offers no solution

The agenda for Ministers meeting at the Agriculture Council meeting tomorrow Monday 14th March includes a discussion of the difficult market situation facing a number of agricultural sectors, including dairy, pigmeat and fruits and vegetables. Ministers will assess the adequacy and effectiveness of the market support measures currently in place, and whether additional measures could be envisaged.

At last month’s February Council, member states were invited to submit concrete proposals on possible additional measures, on top of the €500 million aid package adopted by the Council last September (extraordinarily, only 10 out of 28 member states have so far introduced schemes to spend this money).… Read the rest

Some thoughts on the European milk crisis

On 7th September, around 5000 European farmers demonstrated on the streets of Brussels due to falling dairy and meat prices. The demonstrators demand, amongst others, a review of the intervention system on the milk market, temporary reinstallation of milk quotas, some early direct payments to solve liquidity problems and a marketing fund assisting to sell agricultural products outside the EU.

While reading the news, an agricultural economist might have the following fundamental questions in his/her head.

1. The end of the quota system, an issue on the European policy agenda for many years, has resulted in limitless production, especially in countries with comparative advantages.… Read the rest

Lessons from the 2009 EU dairy market crisis

The EU dairy market is now recovering from the severe drop in milk prices in 2009. Perhaps the clearest sign of this recovery is the setting of export refunds on dairy products to zero since mid-November, as world market prices for dairy products have strengthened in recent months.

It is thus an opportune time to evaluate the EU’s response to the crisis, and to see what lessons might be drawn for how the Union can address similar problems in other farm sectors in the future. My view is that there is a lot to be learned from the dairy crisis, and that the outgoing Commissioner deserves credit for the way she handled it.… Read the rest