Local view for "http://purl.org/linkedpolitics/eu/plenary/2015-07-06-Speech-1-161-000"
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"en.20150706.14.1-161-000"2
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"Mr President, I would like to begin by thanking my shadow rapporteurs for their constructive input throughout this whole process. They say that a week is a long time in politics, but certainly I have to say that a year has been an extremely long time for dairy farmers over this last 12 months.
Since last year, global supply has continued to outstrip global demand. We have seen the Chinese pull back from the market; we have seen the Russian embargo, and we have seen prices continue to tumble. We need only look at last week’s global dairy trade auction to see that volatility is wreaking havoc in the dairy market. The auction’s 5.9% decrease is the eighth decrease in a row and marked the lowest average price since 2009. Fact. The continuing fall in prices can no longer be dismissed as a blip. All the indications point to a dairy sector in crisis.
I have repeatedly said that the Commission has failed to recognise the scale of the problem, despite assurances that were given in 2009. Commissioner Hogan may finally be starting to grasp it. In a recent interview on the BBC, he said he hoped the second half of 2015 would produce some evidence that we are coming out of this crisis. So I hope he will address that tonight and admit that there is a crisis in the industry. I hope that this is a long overdue recognition of what dairy farmers have been saying for some time. Is the Commissioner prepared to clarify his remarks and acknowledge that the sector is in crisis? In any case, Rabobank’s most recent report has made the Commissioner’s prediction look very optimistic, forecasting a recovery in the first half of 2016 at the earliest.
Commissioner, dairy farmers cannot wait that long. Dairy farmers cannot wait until next year to see things turn. The Commission must act now. One measure that could make a real difference to dairy farmers in the short term would be a review of the current market intervention threshold. My report calls for a realistic safety net that accurately reflects production costs and market prices.
In my own constituency, processers are paying an average base price of 20 pence per litre, with the average cost of production in Northern Ireland around 26.5 pence per litre. It does not match up. With the intervention rate so low, prices have fallen below the cost of production, and that is not unique to my area alone. We need to put a flow in the market to ensure no further decline arises.
Another short-term major sector is the Russian ban. Mr Putin has now extended that embargo for another year in response to the latest round of EU sanctions. The onus is on the Commission to stand behind dairy farmers who continue to suffer the consequences of political decisions beyond their control. The Russian ban has emphasised the pitfalls in relying too heavily on one trading partner. Diversifying export markets is crucially important to the countries like my own, and we need to ensure that we diversify the markets and expand the markets that are already there.
The Commission has made good progress in sourcing new outlets for our own quality European produce, but there is always scope to improve that. We also cannot ignore the longer-term challenges in the dairy sector. We need to look at imbalances in the supply chain between producer, processor and retailer, as well as own—brand labelling and the use of liquid milk as a loss leader by large supermarkets. We need to look at the possibilities of futures-market and fixed-term contracts, as more predictability would allow producers more flexibility. While these are major issues, I believe the single greatest challenge facing the dairy sector is volatility. Unfortunately, it is here to stay."@en1
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