FrieslandCampina’s restraint on milk production

FreislandCampina has introduced an instrument for countering further increases in production in the milk market. The idea is for a bonus payment to encourage dairy farmers not to increase or even to reduce their production. The producers are to be paid an extra two euro cents per kilo of milk if during the period from 1 January to 11 February 2016 they supply not more or even less milk.

Sieta van Keimpema, vice president of the EMB, says, “So the dairies, too, are making it clear that unchecked growth in volume is problematic, and there must be instruments to counter it. FrieslandCampina has opted for a voluntary limit on supply, or a voluntary restraint on supply, because that is a very effective way of reducing volumes. It means positive action can be taken in the market and distortions prevented.

This instrument ought to be applied not just at individual dairies, but throughout the EU and thus managed centrally. Initiative on the part if individual dairies is not enough. It is up to politicians in particular to establish the proper legal framework for this, stipulating a market volume that enables prices to cover producers’ costs.

In recent months, unchecked growth as a pan-EU strategy has caused huge problems and already driven many dairy farmers to ruin. With prices in some cases at just 20 cents a kilo of milk, survival is simply impossible for many farms. Alluding to the passive attitude of EU Commissioner for Agriculture Phil Hogan, van Keimpema adds, “The EU politicians must finally act now to stop this development and cannot pursue their ignorant line further. Put into practice a Market Responsibility Programme on an EU level with voluntary restraint on supply as the key element to enable the milk market to finally recover.”