EU should drop milk deregulation

19th October 2009, Comments 0 comments

Europe should abandon liberalisation of the milk sector, French Agriculture Minister said Monday ahead of an EU meeting due to announce EUR 300 million of aid to farmers.

"I would like to see ... a strong political signal that Europe is clearly choosing the path of regulating the milk market and is abandoning further liberalisation," he said in an interview in the business daily Les Echos.

The European Union was expected to announce almost EUR 300 million (USD 446 million) in additional aid for struggling dairy farmers next year at a meeting on Monday in Luxembourg of the bloc's farm ministers.

Twenty-one of the EU's 27 nations, including France and Germany, called for the additional aid, which will be drawn from the bloc's 2010 budget.

Le Maire said the same 21 countries support keeping market regulations in place, as does the European parliament.

The minister warned he is ready for an "open rift" with the Swedish EU presidency and European Commission if they turn a deaf ear.

Last November, EU agriculture ministers agreed to lift milk production quotas by one percent per year before scrapping them altogether in 2014-2015.

But in recent months, European farmers have ramped up protests in search of EU support through financial aid or by limiting supplies, as dairy product prices collapse due to low demand caused by the financial and economic crisis.

Since 2007, milk prices have in the worst cases halved.

But while the commission, the EU's executive arm, has agreed to introduce targeted aid to the sector, it has refused to go back on its decision to scrap the quota system.


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