Dairy Demands Brussels and Berlin Move to Ease Milk Crisis

Europe's dairy farmers are suffering as milk prices fall dramatically. Amid protests in Brussels, Berlin and France on Monday, EU agriculture ministers agreed to bring forward subsidies for farmers but the commissioner is refusing to budge on quotas.

European farmers are suffering from a severe slump in milk prices and on Monday furious dairy farmers took to the streets in Brussels, Berlin and across France demanding help from the European Union and their own governments.

Farmers protest in central Berlin on Monday.

Farmers protest in central Berlin on Monday.

Farm tractors and even cows blocked streets in Brussels' European quarter as EU agriculture ministers met to discuss the crisis. Meanwhile in Berlin 6,000 farmers gathered to put pressure on the German government, while in France some 12,000 dairy farmers went on strike.

Struggling dairy farmers have many demands, but their key complaint is that they want milk quotas to be lowered across the EU. While the meeting of ministers concluded with some measures to help the stricken farmers, Agriculture Commissioner Marie Fischer-Boel is not budging on the issue of milk quotas, which are increasing by 1 percent a year and will be abolished completely in 2015. Farmers claim overproduction is pushing down prices and threatens to kill their livelihood. At least five EU countries have demanded delays to these annual rises in milk quotas in order to allow prices to recover.

Farmers are accusing retailers of exploitation, complaining that while the price they get for their milk has slumped dramatically in recent months, the price consumers are paying for their milk has remained the same. The French farmers union the FNPL says that farmers are now only paid 21 cents for a liter of milk that retails at €1. Many farmers say they are being forced to sell to wholesalers at prices below the actual cost of production and could be driven out of business if the situation doesn't improve soon.

'Farmers Need to Produce Less'

Around 900 protestors converged on the Belgian capital on Monday, and some even broke through the riot police and barricades before being beaten back with truncheons. Ministers from France, Austria and Germany had tabled a series of requests for aid to the sector, and protesters wanted to increase pressure for movement.

In the end the agriculture commissioner yielded some ground, agreeing to make subsidies to farmers available two months early. Fischer-Boel announced that they could receive up to 70 percent of the 2010 subsidies in October instead of December. The farmers could also receive money for storing butter. The commissioner also said she would examine a proposal from France that cheese subsidies be raised "significantly."

However, Fischer-Boel refused to reopen the issue of quotas, saying they were not the cause of the problem. "It is simply a question of lower demand. What farmers need to do is produce less," she said, adding: "Consumers are not buying high-quality milk products they used to buy before the financial downturn."

Under pressure from its trade partners, the EU has in recent years sought to reduce farm subsidies and stick to free market principles, a development that has angered farmers who are grappling with steadily declining incomes.

The measures agreed on Monday are unlikely to placate these desperate milk farmers, though. They want quotas lowered so that prices will rebound. "A lot of producers can't hold out with milk prices the way they are," Erwin Schoepges, a Belgian representative of the European Milk Board, told Agence France Presse. "Morale is very low."

In France, more than 80 milk processing plants were closed off on Monday by some 12,000 angry farmers demanding more government intervention. "Nothing is going in and nothing is coming out," farmers' union leader Joel Limouzin told AFP.

Worrying Unrest in the Countryside

Meanwhile, the German government has also bowed to the farmer lobby by agreeing to cut taxes on diesel fuel used in farms. The ruling coalition of conservative Christian Democrats (CDU) and center-left Social Democrats agreed to cut the tax on the fuel to 25.56 percent. However, Gerd Sonnleitner, president of the German Farmers' Association (DBV), said he wanted to see a much bigger reduction to match the tax imposed on the fuel in France. The French pay only 0.6 cent per liter in tax while in Germany the rate is around 40 cent per liter. "We won't stop until we have reached the French tax rate," he told the 6,000 farmers who had come to the capital to demonstrate on Monday.

The unrest in the countryside is starting to worry Chancellor Angela Merkel's Christian Democrats, which is facing European elections in June and national elections in September. The farmers are traditionally seen as staunch supporters of the CDU and its Bavarian sister party the Christian Social Union, but the economic plight of the farmers could be undermining this loyalty. In state elections in Bavaria last September the CSU failed to attain a clear majority for the first time since the 1960s. If the CSU continues to see its vote slide in the national elections this September, then the Christian Democrats' dream of forming a coalition with the pro-business FDP could go up in smoke.

Chancellor Angela Merkel has finally realized that she needs to take steps to woo the farming community. Agriculture Minister Ilse Aigner, a member of the CSU, said on Monday that the chancellor was planning to hold crisis talks with dairy farmers later this week.

smd -- with wire reports


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