A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Milk post-quota era: The industry is getting ready and learning from practices on the other side of the Atlantic

February 17, 2014

A new crisis could again sweep the dairy sector in France. For Serge Papin, President of Système U, there is no doubt that an imminent crisis is about to occur. In the current context of price war among France’s major retailers, he criticizes “the lack of accountability in leadership” and “the discrepancy” with global markets, where prices have been rising since January.

These remarks are far from meeting a consensus but do reflect an anxiety-provoking environment for the French dairy sector, and an awareness of the limitations of production and market deregulation. For beyond the price war, Europe is embarking of the arduous journey to deregulate the dairy sector. The agricultural community––especially in France––is thus looking at various solutions to deal with the post-quota era in 2015.

There are clear indications that a lack of relevant groundwork and solutions could even more weaken this structurally volatile sector, and further worsen these price wars.

How can we then safeguard the ability to sustain dairy activities at the national and European level while controlling quantities? How can we prevent the risk of a dairy production breakdown against the demand in an increasingly uncertain context, and ultimately redesign new regulation procedures after the elimination of milk quotas?

In a recent communiqué, the European Committee of the Regions (CoR) represented by René Souchon1, advises European authorities to “implement market regulation instruments for the dairy industry by learning from the new 2014-2018 Farm Bill” that was adopted on February 4, in order to secure revenues for all farmers. René Souchon thus suggests to initiate an insurance system for margins linked to a production management system. He feels such plan is crucial, since “it would be ‘suicidal’ to leave the dairy sector defenseless against the rising price volatility and the increased global competition that will be generated by the trade agreements under negotiations”.

This is a recommendation that momagri cannot but welcome. In fact, since the Milk Conference held in Brussels this past September, we are promoting the economic and budgetary relevance of counter-cyclical subsidies coupled to specific market management mechanisms. Such procedures will lead to a lasting stabilization of sales, an effective action to fight volatility and the crises it generates, as well as a better use of budget resources and a long-term strategy beneficial to the agricultural economy.

In the mean time, we can only hope. The monitoring agency for the milk market––the European Milk Board or EMB––advocated by the European Commission should be created in the coming months, and the French Federation of Dairy Cooperatives, as well as the JAs (Young Farmers’ Union), are looking at an effective crisis management system. Who knows if the 2020 CAP will experience a turnaround similar to that occurring on the other side of the Atlantic?

1 President of the CoR’s Commission for Natural Resources, President of the French Auvergne Region and rapporteur of the 2013 CoR’s position the elimination of the milk quota system.

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Paris, 24 June 2019