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European Milk Package Strengthens Dairy Producers’ Position in the Supply Chain

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European Milk Package Strengthens Dairy Producers’ Position in the Supply Chain

European Milk Package Strengthens Dairy Producers’ Position in the Supply Chain
November 30
10:07 2016

The European Commission has published the second report on the operation of the so-called Milk Package, a series of measures launched in 2012 to strengthen the position of European dairy producers in the supply chain. The report shows that after three years of implementation, European farmers are increasingly using the tools provided by the Milk Package, such as collective negotiation of contract terms via producer organisations, or the use of written contracts. The measure allowing collective negotiation is designed to reinforce the bargaining power of milk producers, whilst written contracts offer better transparency and traceability to farmers.

The report was initially due to be delivered in 2018, but in light of the continuing difficulties in the dairy sector, EU Commissioner for Agriculture, Phil Hogan decided to fast-track the report to the end of 2016. This commitment was part of the series of solidarity packages for the dairy sector announced and implemented during the past year.

Phil Hogan says: “The report shows that there are measures that we can take at EU level to secure a better position for dairy farmers in the supply chain. Following on from the Agricultural Markets Task Force report last week, I see this report as further evidence for policy action, in the context of the 2017 Commission Work Programme.”

The report also examines further possibilities for dairy farmers. For example, it highlights the potential of two key instruments of the Milk Package – Producer Organisations (POs) and collective negotiations – which are not yet fully exploited by Member States, producers’ and farmers’ organisations, and outlines various ways of making these more effective both at EU and Member State level.

Member States are, in particular, encouraged to take the necessary steps to foster the creation of producer organisations with collective actions that go beyond collective bargaining, thus enhancing producers’ weight in the milk supply chain. In addition to these recommendations, consideration should be given to expand the role of Inter-Branch Organisations (IBOs).

For the full potential of the Milk Package’s possibilities to materialise, the report concludes that an extension of its application beyond 2020 should be considered.

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