A solution is far from being found to the crisis in the dairy sector, and which has been in the headlines for the few days. According to Agrapresse1, the last agreement that was reached with much difficulty on June 3, following marathon negotiations and unprecedented political pressure, has particularly left dairy producers unsatisfied, but also the industrialists as well.
This agreement envisages three average prices in 2009, depending on whether the collecting firm has a larger or lesser part of the industrial products in its valuation. The highest price envisaged is fixed at 280€/1000 liters, while the lowest is 262€/1000 liters, none of which covers the diary farmers’ cost price. This price is far from the 330€/1000 liters of the first six months, and even further from the 380€/1000 liters that the president of Modef, the National Confederation of Agricultural Worker’s Union, is demanding. Even the National Dairy Farmers’ Federation (FNPL), that declared it was willing to go down to 290€/1000 liters, refuses to go so low.
And it is not the 30 million euros that the Agriculture Department released in a rush as part of the agreement that will compensate the dairy farmers in difficulty for their financial losses.
All this leads us to believe that the dairy sector is far from reaching an agreement that will take it out of the rut in which it now finds itself. Maybe it is now time to “rebuild a control system”, as Agriculture Minister Michel Barnier, stated on RMC-Info/BFM-TV on May 28th.” He declared: “I will not decide, I will never decide to (…) to hand over agriculture, and in particular, milk to the single law of the market. European governance is needed. One way or another, we need to preserve the dairy production control system.”
If this system is not necessarily the best solution to the crisis, the current situation illustrates the urgency in starting to act, in order to bring structured responses to stabilize the dairy markets and more generally, the agricultural markets.
1 Agrapresse, « Un accord politique déjà fragilisé », 08/06/2009.