DBV meets with German government over agreements
“The design of delivery relationships in the milk sector can not lead to satisfying results by means of state or generally binding requirements,” says president Karsten Schmal of the DBV (German farmers’ association), speaking after a parliamentary milk breakfast with representatives from federal and provincial chamber ministries. “It must be in the interests of the German dairy sector to offer market-friendly agreements between farmers and dairies that will satisfy the heterogeneous nature of opinion among farmers and dairies,” he adds.
Professor Sebastian Hess of the Christian-Albrechts-University in Kiel presented results of a survey among German dairy farmers during the meeting, which showed the design of delivery connections. Typical co-operative supply relationships in the German milk sector are generally accepted by farmers, but in some areas adaptation is needed.
Smaller, medium-sized and growth-oriented enterprises recognise advantages in the current design of co-operative delivery models. Larger farms, on the other hand, would in many cases prefer alternative arrangements for supply relationships.
Representatives of the German Raiffeisen Association and the cooperative association pointed out that the dairy cooperatives are facing the challenges of a volatile dairy market and are also discussing the design of the supply relationships and the possibilities of price hedging with their members. At the same time, different expectations of the members in the democratic decision-making process have to be balanced.
“There will be a need for better coordination between farmers and dairies in terms of quantities, prices and duration of these agreements. Farmers should be given practicable opportunities to hedge prices. Dairies, on the other hand, need a more reliable basis for future delivery volumes. The price signals from the world market should come sooner to farmers. As a farmers’ association, we see this confirmed by Professor Hess’s investigations,” concludes Schmal.
