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Following months of discussion and review, the ‘Milk Package’ report has been adopted by the European Parliament AGRI Committee.

Stated Aim of Legislation

‘To boost dairy farmers’ bargaining power, they must be enabled to negotiate fairer prices through producer groups; pricing practices must be made clearer throughout the distribution chain, and dairies be legally obliged to report monthly purchases.’– Comm AGRI

ICOS strongly took the position that from an Irish context, 99% of the domestic milk pool was already controlled by farmer owned cooperatives, and that these structures had to be protected from a ‘one size fits all’ solution from Europe that would undermine existing successful cooperative structures.

Upping the Bargaining Power of Producers

Because of issues in Eastern and Southern Europe in correcting the imbalance in bargaining power between farmers and dairies,  the formation of producers’ organisations in these regions are encouraged so that farmers can negotiate raw milk deliveries for them and ensure that they get a fairer share of the price paid by consumers. Commission and Parliament officials stated to ICOS that their hope is that these producer organisation would evolve in time into Co-operatives.

To avoid the formation of cartels, the volume of raw milk covered by such negotiations and produced / delivered in any Member State may not exceed 40% of total national production and 3.5% of the total EU production.

Compulsory contracts

Under the new regulation, every raw milk delivery from a farmer to a processor would have to be covered by a written contract. If the delivery is made through one or more collectors, it will be up to the Member State concerned to decide which stage should be covered.

These contracts would have to be concluded before the delivery, and would have to state a milk price fixed for no less than one year, say MEPs.

ICOS lobbied with its allies to ensure that Co-ops are EXCLUDED from this regulation arguing that the statutes of a farmer owned Cooperative already give producers terms, and to interfere with a system that has functioned to serve farmers interests for over 130 years would not constitute best practice.

This goal was secured, but the wording was slightly ambiguous as it said that Coops were excluded if their statutes adhered to the conditions laid out above, so we have work to do on that score as the legislation enters co-decision.

Soft Landing

A positive victory ICOS did score was the inclusion of a recital in the legislative report calling on the EU institutions to re look at the provision of a real ‘soft landing’ for Milk Quotas.  ICOS will continue to work with it’s counterparts within COPA COGECA and the Department of Agriculture to explore the possibility of concessions in this area.

Production volumes and average prices paid for raw milk would have to be declared by the first purchaser each month.  A call for a Market Monitoring Agency to be established to collect and disseminate various production and supply data in order to give early warning of possible future milk market imbalances.

The legislation also calls for the Commission to introduce rules to protect dairy farmers in marginal land areas and with small herds within its CAP reform proposals.

The report, drafted by James Nicholson (MEP, European Conservative Group, Northern Ireland), was approved with 34 votes to 3.

Application of the New Law when Fully Enacted

It is hoped that the New Rules will come in in 2012 after consideration in the co-decision process by the Council, Commission and the European Parliament. The new rules will apply only until 30 June 2020, and will be reviewed in 2014 and 2018.

Next steps

The report will be put to a vote by Parliament as a whole by the end of the year.

MEPs will in the meantime launch informal three-way talks with the Commission and the Council with a view to reaching a first-reading agreement before the plenary vote takes place- Around Oct 1st.   ICOS will remain heavily engaged in this process.

For further information please contact:

Tim Kinsella 086 813 7512 / tim@mkc.ie

For press releases, media kits and more visit the ICOS website at www.icos.ie