Farm Ireland
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Friday 22 September 2017

European farmers to protest over milk powder in intervention being ‘thrown on market’

A tractor blocks the entrance of the European Commission's agriculture office during a protest by European milk producers in central Brussels November 27, 2012. REUTERS/Francois Lenoir
A tractor blocks the entrance of the European Commission's agriculture office during a protest by European milk producers in central Brussels November 27, 2012. REUTERS/Francois Lenoir
Ciaran Moran

Ciaran Moran

The European Milk Board is angry that milk powder mountains from market intervention are being released on the market which in its view would strongly increase the pressure on prices.

It says this is despite milk farmers all over Europe are far from getting cost-covering prices.

According to the EMB, this shows again that market intervention does not solve any problem on the market, but rather serves as an instrument to prolong this lasting crisis.

“We need a permanent crisis instrument now, which addresses production volumes.

“The programme of voluntary production cuts showed that this can work.

“The Commission and the Ministers of Agriculture now have to set a legal basis for the Market Responsibility Programme (MRP).

“For this reason, we will be present in Brussels on the day of next Council meeting. With strong symbolic images we will make clear that milk powder from market intervention threatens milk price.

Last week, the European Commission announced the result of its second tender for its giant reserves of Skimmed Milk Powder sold into public ownership over the past two years.

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In its most recent tender, the Commission put forward over 11,000t of stock however, no bidders were willing to pay the Commission’s minimum price.

It comes following a similarly poor tender late last year for the stock with less than 40t out of a possible 20,000t sold at the Commissions minimum price of €2,150/t.

The Commission has been praised in some quarters for thus far not selling its reserves 'cheap', however concerns have been raised over the length of time it can hold onto the stock.

Last month, the European Commission announced its proposal to go ahead with a sale of Skimmed Milk Powder out of intervention following agreement from Member States.

The Commission said the proposal was on the back of encouraging signs of recovery being seen on the European milk market, with an increase of about 10pc of the average price paid to producers in the last three months.

It said in order to test the market reaction, the quantity of product concerned by the tender procedure is limited, corresponding to only 6pc of the total amount of 355,000t of SMP stored and taken off the markets since the opening of the measure in September 2014.

Following a steady slow down, no more quantities of SMP have been put into public intervention since September 2016, even though this market measure remains open.

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