Supply reform called for by German farmers

The discussion about the need to reform supply relations between milk producers and dairies has gained momentum in Germany in recent months.

MEG Milch Board, the dairy farmer’s organisation, expressly welcomes this development. “I am increasingly under the impression that politicians have understood that the dairy market needs new regulations regarding supply relationships. The hopes that the market partners can regulate this between themselves have proved to be unsustainable,” claims Peter Guhl, CEO of the MEG Milch Board (pictured).

“How should milk producers in a saturated market give their demands for cost-covering milk prices weight without seeming ridiculous? They are the weakest link in the value chain, and their situation has worsened dramatically since the end of the quota.”

The fact that the dairy industry copes well with the current situation shows, from Guhl’s point of view, its constant emphasis on not changing anything. The status quo is based on the obligation to tender all milk produced in Germany.

Guhl is convinced that as long as the delivery obligation is not shaken, industry-internal solutions have no chance. Only when milk producers and dairies are required by law to agree on specific delivery quantities – the basis for this can only be the milk purchase contract — will there be a movement in the deadlocked situation, he notes.

MEG Milch Board sees a clear benefit for dairy farmers in Germany in legally stipulated contract contents in terms of quantity, price and contract duration. The obligation to tender has to be replaced by contractual regulations in this respect both in the private sector and in the cooperative sector, according to the organisation.

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