Farmers’ union not impressed by EU support package for dairy production

Commission accused of dragging its feet

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Juha Marttila, chairman of the Central Union of Agricultural Producers and Forest Owners (MTK) dismisses the European Union’s EUR 280 million support package for dairy farmers as being largely cosmetic.
      “Certainly, it is a large sum of money, but when it is viewed in proportion to all the milk production of the EU, it adds up to very little per litre of milk”, he says.
     
Finland is set to get EUR 5 million of the package, but how the money is to be distributed remains a question-mark. If divided equally among Finland’s 12,000 dairy farms, each one would get just over EUR 400.
      “That would not solve the problems of the dairy farms”, Marttila says.
     
Marttila also criticises the slow pace at which the EU makes its decisions. “It has taken nearly a year for the Commission to react to the matter.”
      He does not expect the problems experienced by dairy farms to ease until there is a rise in demand for milk, and a decrease in production. “Then the market will correct itself.”
     
Farmer Panu Karjalainen runs a relatively small dairy farm with 15 cows in Mäntyharju.
      “The fall in prices has hurt. Last summer, for the first time ever, I considered whether or not there was any point to this. I seriously wondered if I should shut this down”, Karjalainen says.
      “The most recent price cut, five cents a litre, reduced my flow of income by EUR 8,000. It was all taken out of my income, as I cannot cut costs as much.”
      Karjalainen has tried to grow his pastures in a more efficient manner, and to keep his cows grazing outside as long as possible into the autumn.
      The small size of his herd makes it more difficult to save on purchases. “I cannot benefit from economies of scale.”
     
The producer price of milk has declined in Finland by ten cents a litre within a short period of time.
      A year ago farmers got nearly 50 cents a litre for the milk they produced, and now the price varies between 35 and 37 cents. On the other hand, certain production costs, such as the price of fertiliser, have come down since last year.
      The retail price of a litre of whole milk is 90 cents.
     
Finnish milk production faces further challenges. Next spring, the producer price is expected to fall to about 30 cents a litre.
      Finnish dairy farmers are nevertheless paid more for their milk than their colleagues in many other European countries, thanks to Valio, the dairy company, which is owned collectively by Finnish dairy farmers.
      In Western Europe, the producer price is 25 cents a litre, and in the Baltic countries it is less than 20 cents.
      EU and domestic subsidies account for about 50 per cent of the income of Finnish agricultural producers.


Previously in HS International Edition:
  10 million litres of raw milk imported from Sweden per year (19.3.2009)
  EU ends export subsidies on dairy products (20.6.2007)
  Finnish dairy industry threatened by cheap imports from new EU countries (16.3.2005)
  Valio cutting producer prices of milk (23.6.2009)

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