Policy Markets Processing

Spain Must Change “Radically” or Face “Dairy Catastrophe”

SPAIN - Spanish Farmer groups are cajoling legislators into amending dairy market agreements to ensure 12 month contracts stipulating clearly referenced prices.

23 January 2015

2 minute read

Europe

A plea has been sent to the agriculture ministry not to “bow to pressure” and make the contracts mandatory.

If no such deals are met, dairy farmers will have “no weapons to defend themselves” from being “bullied” in light of quota abolition on 1 April. The result will be widespread farm closure and milk shortages, warned the Union of Small Farmers and Ranchers (UPA).

This is despite the milk package, published by the EU in March 2012, designed to strengthen producer position within the market.

Almost three years on from the bill, producer organisations are approaching the imminent quota removal with caution.

But further demands to concentrate supply have been made this week by regional cooperative union Urcacyl. More mergers, cooperatives and partnerships are still the answer in the eyes of many.

And the same week a UK parliamentary committee called on the government to change market laws to protect milk producers, the Spanish media has retaliated to milk sold at a loss. Supermarket chains Eroski and Carrefour have been named and shamed by farming publication agroinformacion.

The retailers are driving down the store price on milk brands such as Lagista, stocking them as a loss leader or “loss sales” putting huge pressure on the industry, according to the paper.

However, Urcacyl has blamed the production levels on the current pressure seen in the market. Last year, European production lifted five per cent on 2013 and quantities of Skimmed Milk Powder, among other commodities surged 25 per cent in one year.