EU farmers seek minimum milk producer price

By Bate Felix BRUSSELS, Nov 10 (Reuters) - European dairy farmers want a minimum producer price for milk and changes to EU competition laws to allow farmers to work together in drafting contracts, a European Commission expert dairy group heard on Tuesday. Farmers' union Copa-Cogeca said measures to curb price volatility should be considered as one of the solutions to the crisis that sparked protests and delivery boycotts by milk farmers across Europe. The European Commission set up the specialist dairy group last month to examine the problem in the 45 billion euro ($67 billion) EU dairy sector and propose solutions. Copa-Cogeca President Padraig Walshe said farmers' bargaining powers should be strengthened by a change in EU competition laws. "One of the major issues has been the volatility in prices," Walshe told a news conference. "I emphasised to the Commission and the high level group that in future there has to be a minimum price-support mechanism at the core of the dairy farmers' market to curb volatility and ensure that prices do not drop to ridiculously low levels." Walshe also argued that competition law had to be changed to allow farmers to coordinate their work, making contracts with various milk processors together. Among possible solutions to the problem, the EU expert group is considering contractual relations between milk producers and dairies, the strengthening of farmers' bargaining powers, transparency in pricing and possibly a dairy futures market. Walshe said it was unsustainable for milk prices to fall as low as 18 euro cents a litre in most member states while retailers are expected to see an increase in profit. "Any future policy has to address the situation in the entire food chain, the retail sector cannot be left out of it," he said. However, the European wing of the international farmers federation Via Campesina said the Commission and the expert group should focus on the regulation of production to tackle the problem of over supply which had led to the fall in prices. Via Campesina, which also addressed the expert group, said the EU would be making an error by replacing public regulation of output with private contracts between producers and dairies. "These contracts will not manage the European supply of milk production... and the contracts will be more favourable to large producers than small and medium-size producers," it said, calling on the EU executive to maintain the quotas it plans to phase out in 2015. The EU high level group is expected to hand in its final report in June next year. Until then, it meets every month to discuss possible new policies. (Additional reporting by Ana-Maria Tolbaru; Editing by Keiron Henderson) ($1=.6676 Euro) Keywords: EUROPE DAIRY/ (Reuters Messaging: [e-mail]; Email: [e-mail]; [phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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