Written by Francesco Tropea
Milk is produced in every EU Member State and EU milk production is growing. As the leading worldwide exporter of many dairy products, the EU is a major player in the global dairy market; within the Union, dairy is an essential agricultural sector with significant economic, social and territorial importance. For more than 30 years, EU milk supply was managed by the EU milk quota system, which expired at the end of March 2015. Although long-term market prospects are generally quite positive, with an overall rise in global demand which could offer opportunities to the sector, the challenges to be faced in coming years are numerous.
The current tensions regarding milk prices and the 2009 milk price crisis demonstrate that market liberalisation and dependence on international markets can increase market instability and price volatility. At its plenary session in July 2015, the European Parliament voted on an own-initiative resolution on prospects for the EU dairy sector. It suggested that a series of tools could be developed or improved for the milk sector, such as establishing compulsory written contracts between milk producers and processors, enhancing the role of producer organisations and the recently-created Milk Market Observatory and tackling unfair trading practices in the food chain. The European Parliament also proposed pursuing new trade agreements, and improving information and promotion programmes for the dairy sector and school milk scheme, as well as new measures to protect farmers’ profit margins. In September 2015, the European Commission presented a €500 million package to support European dairy farmers.
This briefing updates ‘The future of the EU dairy sector after the end of milk quotas’, published in June 2015.