Dairy UK states position on CAP, HLEG

Dairy UK, the British dairy association, has released a position paper on the reform of the European Common Agricultural Policy (CAP) and the recommendations of the High Level Experts Group (HLEG) on milk. The organisation states that the EU has to promote efficiency in agricultural production, assist the dairy industry in adapting to price volatility caused by greater exposure to world markets, and to address the higher costs associated with meeting EU standards. Dairy UK has also stressed that the EU needs to base farm restructuring on a continued evolution towards commercial farming. Its recommendations include having the CAP evolve towards a more market-orientated policy, and that the financing should continue to come out in full out of the EU budget.
As for the HLEG, Dairy UK says that EU policy interventions should not undermine producer investment in co-operatives. Unlike other EU countries, Dairy UK notes, “UK dairy farmers are generally large specialist commercial farms. Contracts and commercial relationships in the supply chain are highly developed. The UK is unique in having integrated supply chain arrangements in place between farmers and retailers.” The organisation worries that any action by the European Commission “should not be overly prescriptive as this could inhibit the evolution of contractual relationships.” The idea of inter-professional organisations is also approached warily by Dairy UK: “The UK dairy industry already possesses comprehensive marketing arrangements and forums for industry collaboration and consultation. It is not clear how IPOs could make a positive contribution.”
Another suggestion from Dairy UK was that there should be a third pillar of the CAP devoted to R&D, “given the importance of research and development to the industry’s competitiveness in a market driven environment.”