CSA Canadian Securities Administrators : How can EU milk production be climate-friendly as well as socially and economically sustainable?

16.01.2020

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(Berlin, 16/01/2020) The fact that the reality of being a farmer has been very difficult for a number of years now is no secret. For example, there is a systematic shortfall between milk production costs and producer prices. Over a five-year period, the cost shortfall for German producers has been 20 percent, which implies that production costs to the tune of 9 cents per kilogramme of milk are coming out of farmers' pockets. The situation with organic milk is quite similar, with a shortfall of 21 percent in 2018/2019.

'Our farmers are getting increasingly left behind, both economically and socially,' summarises Erwin Schöpges, Belgian dairy farmer and President of the European dairy farmer association European Milk Board (EMB). 'The orientation of the EU agricultural policy is at the root because it does not promote socially-sustainable farming, it is instead aimed at the production of cheap products that can compete on international markets. This has been the situation for many years now and has also led us to take to the streets in protest for just as long.' EMB Executive Committee member Johannes Pfaller from Germany adds: 'If further restrictions are imposed on farmers in what is already a very unfavourable situation, the current widespread protests should come as no surprise. How can producers, on one hand, continue to provide cheap raw materials while, on the other, also fulfil additional cost-intensive conditions? This is simply impossible and this conflict is destroying producers.' As Pfaller goes on to mention, it is very clear that the market position of producers needs to be significantly improved through an appropriate framework. This would give farmers the possibility to properly defend their economic interests.

Paper on sustainable production in the EU

In order to resolve this conflict between the pressure to produce cheap products and comply with sustainability conditions, the current agricultural policy must be amended at EU level. 'There needs to be a change in tack, to head toward responsible production in the EU,' says Erwin Schöpges. 'To this aim, the EMB has drafted a paper that takes both socio-economic and environmental sustainability into account.' It calls for the necessary implementation of a crisis instrument to dampen the effects of constant crises. This instrument would lead to less overproduction, which would contribute to better producer prices as well as to preserving resources - a key factor in environmental sustainability. This paper also rejects agricultural products being included in free trade agreements as they counteract fair and sustainable production practices.

The paper also makes it sufficiently clear that policy-makers need to uphold a number of important conditions if greater sustainability - both environmental and social - is to have a fighting chance in the agricultural sector:

• Before farmers are able to actually comply with demanding restrictions, the underlying foundation for their activity needs to be robust. This means that prices must cover all production costs, including fair remuneration for producers. The above-mentioned crisis instrument must be implemented at EU level and the market position of producers must be strengthened through an appropriate framework.

• The environmental strategies and solutions underpinning the restrictions must be discussed and decided on together with producers. The positive environmental contribution farmers are already making - carbon sequestration and combating erosion, to name just two - must be duly recognised, and a fair decision must be reached on compensation for environmental compliance costs. After all, farmers cannot be the only ones bearing the brunt.

Fair cooperation between all stakeholders is the only way to achieve socially and economically sustainable as well as climate-friendly agriculture. Policy-makers have an important role to play in ensuring the correct framework is in place, so that farmers are no longer left behind but are, once again, recognised as an important part of the social fabric.

In addition to their political work, EMB producers are also tapping into their own strength and engaging directly with consumers: for example, dairy farmers themselves have launched the Fair Milkbrand in a number of countries in Europe, and it has clearly shown that cost-covering prices are not a pipe dream. But in order to allow for fair prices to become a reality beyond a niche market and to actually get a foothold in the dairy market at large, we need - as described above - an appropriate political framework.

Photos of the press conference

Contacts:

EMB President Erwin Schöpges (DE, FR, NL): [phone]
EMB Executive Committee Member Johannes Pfaller (DE): [phone]
EMB Management Silvia Däberitz (EN, FR, DE): [phone]