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

The U.S. dairy industry betting on collective marketing…

September 9, 2013


The American framework law is still generating harsh debates and all indicators tend to show that it will be difficult to reach a compromise on the next Farm Bill, before the end of the 2008 Farm Bill on September 30, 2013. Congress plays for time and the farmers––especially dairy farmers––are expressing their concerns. Because without a breakthrough by the end of September, the U.S. farm policy will, by the year-end, return to the permanent laws passed in 1938 and in 1949, that is to say the outdated legislation that does not reflect agricultural and marketing practices or current market conditions. Without an agreement, some sectors––especially the dairy industry––could experience skyrocketing prices, as recently stated by U.S. Secretary of Agriculture Tom Vilsack.

Going back to 1776, all American programs to support agriculture have tackled the same objectives: Increasing farming competitiveness and safeguarding farmers’ incomes. Agriculture has always been regarded as a strategic sector, not only by the federal government but also by most farmers who have initiated programs that broaden the Farm Bill through various cooperative enterprises.

Consequently, even if the historically and structurally volatile dairy market benefits from comprehensive regulatory tools, the federal strategy to manage supply remains in the formative stages. With a view to managing surpluses and shoring up falling prices, the National Milk Producers Federation (NMPF) instigated the Cooperatives Working Together (CWT) program in 2003 with the goal to act collectively to lower the production of dairy cow herds through bids for subsidized slaughtering operations and through export subsidies. This system introduces a voluntary contribution of $2.20 per ton of milk, generating an annual budget of approximately $150 million. Various estimates are indicating that over 70 percent of milk producers are currently involved, thus getting $16.59 for each dollar invested in the program.

The CWT section relating to dairy cow removals ended during the 2010 summer to focus on dairy exports thanks to the Export Assistance Program. It recently handled 16 requests for assistance regarding exporting three million tons of cheese and butter. In 2010, CWT participated in exporting over 281 million pounds of cheese, butter, powered non-fat and whole milk toward 52 countries on four continents.

While the CWT program is difficult to apply to other industries––even if pig farmers did try––it represents an example of effective collective marketing in dairy production by means of a program serving agricultural competitiveness and fighting price volatility.

What about the European market management mechanisms following the phasing-out of milk quotas in 2015? While the European dairy industry is attempting to chart the future, many feel that the deregulation of the industry planned by the European Commission is “a major strategic mistake at a time when large producing nations, such as the U.S., are retaining and strengthening regulatory tools,” as recently reaffirmed by René Souchon, Rapporteur of the European Commission Committee of the Region, regarding the issue of the changing market situation and the conditions linked to the progressive phasing-out of the dairy quota system.
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Paris, 17 December 2018