Jun 15th, 2009

Commission confirm to ICMSA that emergency legislation to support dairy markets is on the way

A senior EU official confirmed to ICMSA in Brussels today that emergency legislation will have to be used to support dairy markets later this year. Dr. Klaus-Dieter Borchardt, Chef de Cabinet to Commissioner Fischer Boel said that the dairy sector was now in its worst crisis ever and that milk
prices would not recover in the short term. Mr. Jackie Cahill, ICMSA President told the Commission that while he broadly shared their assessment of the bleak market outlook, the actions and policy implemented by the Commission to date will not solve the income crisis being faced by dairy farmers.

The ICMSA President said that a continuation of intervention beyond the normal orbit deadlines for butter and SMP and the use of export refunds will not lift milk price above the cost of production at least for the remainder of 2009. Mr. Cahill said that he emphasised to the Commission the necessity for a flexible milk supply management system in order to permanently lift milk prices and bring stability back to the dairy sector.

Mr Cahill said that unfortunately - and despite all the evidence – the Commission remains steadfast in their opposition to such an approach. While the Commission does accept the need for a cut in production it is proposing that individual farmers cut back production. Mr Cahill said that this will
not happen unless the crisis is allowed to develop to an even more critical level in which case there could be a collapse in supplies as dairy farmers face financial ruin. Mr. Cahill expressed deep concern that the Commission are now allowing individual countries to finance supports for dairy farmers from their own Government budgets. He said this re-nationalisation of the dairy sector is a dangerous move and sets an even more dangerous precedent.

Jackie Cahill said that he was encouraged by the growing level of political support for a flexible supply management system and the recent Franco-German Government Paper on this matter was a very positive development. ICMSA strongly urged the Taoiseach to support the Franco-German dairy policy initiative during his attendance at the Heads of State and Government meeting in Brussels later this week.

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