Is Brussels involvement in the dairy market desirable?

This week, German agricultural trade journals drew attention to votes in the European Parliament on October 23 on reforms to European dairy policy, towards (voluntary) supply regulation at European level. The current market situation on the European dairy market also gives rise to this, as milk supply is increasing both in Europe and worldwide, while the milk price is under pressure as a result of the corona crisis.

According to Huitema, the purchase of milk powder and the voluntary milk regulation, which were applied in 2016 and 2017 to stabilize the milk price, have resulted in the purchased dairy stocks hanging above the market for far too long. In his opinion, the European Union should leave price setting on the dairy market to the European dairy sector itself.

Balanced growth
According to spokesperson Jan-Willem ter Avest, dairy cooperative FrieslandCampina is also not pleased with the dairy market reforms that a majority in the European Parliament is trying to achieve. He refers to the positions of the European dairy organization EDA. He emphasizes that FrieslandCampina's balanced growth strategy does not have the same scope as the dairy reforms advocated by the European Parliament. "Based on the current milk supply, there is enough room for growth for the individual members of FrieslandCampina. The chance that an individual dairy farm will grow faster in milk production than the comparison space and latent space of FrieslandCampina allow is very small. Moreover, it has never happened so far that cuts have actually been made." The latent space in milk production is currently approximately 451 million liters of milk, from companies that have stopped and companies that milk below their comparison volume.

Political power relations
Klaas Johan Osinga, LTO portfolio holder for international trade, cannot imagine that the so-called trilogue talks between the European Parliament, the European Council of Ministers and the European Commission will lead to major changes, such as a bonus-malus system controlled by the EU. "This topic is far too controversial."

MEP Annie Schreijer Pierik of the CDA refers to the opposing views on this subject in Dutch dairy farming. "Opinions are divided. The CDA's new election manifesto explicitly calls for attention to the position of the dairy farmer in the dairy chain." VVD MEP Jan Huitema agrees that proponents of free market forces instead of EU interference in the European dairy market have lost influence in the European Parliament due to the departure of the United Kingdom.